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Open Access 06.06.2024 | Original Paper

Exploring strategic corporate sustainability management in family businesses: A systematic literature review

verfasst von: Simone Häußler, Patrick Ulrich

Erschienen in: Review of Managerial Science

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Abstract

The escalating demands from legislative authorities and stakeholders for companies to adopt corporate sustainability measures underscore the growing importance of strategic sustainability management. Despite the efforts made by companies in this domain, the strategic management of sustainability in family businesses remains an under-researched area. To address this gap, we conducted a systematic literature review covering the period from 2006 to 2022, on the topic of strategic sustainability management in family businesses. Our investigation encompasses a content analysis of 98 relevant studies. Our research question is: “What aspects are taken into account by family businesses in their corporate sustainability strategies?” We tackle this issue through a methodological triangulation of qualitative and quantitative methods. Our results yield three clusters of strategies for corporate sustainability in family businesses: (1) Family values and succession planning; Stakeholder relations and communication; (2) Risk taking, Inventions, and Technologies; and (3) Entrepreneurship and Intrapreneurship. In addition, we systematically present a range of descriptive indicators, including the research methodologies applied and the geographic focus of the published literature. This research contributes significant insights for scholars and practitioners alike, providing valuable guidance in this field. Moreover, our study paves the way for further investigations into the strategies that influence sustainability within the context of family businesses. By shedding light on this critical area, we aim to foster a more sustainable and informed approach to corporate practices among family-owned enterprises.
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1 Introduction

The pressure on companies to implement corporate sustainability is increasing from both the legislature and stakeholders (Tjahjadi et al. 2021). Sustainability management is no longer just an individual corporate decision but is increasingly becoming a competitive factor. Given new and stricter requirements (e.g. on the part of the European Commission to achieve the 2- or preferably 1.5-degree target), companies will be more strongly obliged in the future to disclose their business activities regarding sustainability (European Parliament Council 2021).
Sustainability can improve consumers’ perceptions of product value (Bruttel 2014; Gómez-Ortega et al. 2023). A literature review by Schäufele and Hamm (2017) indicates that manufacturing and marketing with sustainability attributes is a promising strategy for quality differentiation. They report that consumers understand sustainability as a quality indicator and are therefore willing to pay more for sustainable products. Thus, through sustainability, preferences are created and purchasing behavior is influenced, which offers companies a competitive advantage. Sustainability can also help companies improve their image and generate more sales and customer loyalty as society takes on more and more social responsibility (Samudro et al. 2018). Sustainable marketing encompasses both sustainable products and social and economic practices. Addressing each of these elements can have a positive impact on competition. In a review paper, Batista and Francisco (2018) identified sustainable strategies of companies and analyzed the competitive advantages resulting from each of the three categories: environmental, economic, and social strategies. Actions falling under the environmental category are fundamental to maintaining competitiveness as they result from competitive behaviors and practices aimed at meeting specific requirements (e. g., the European requirements for sustainability reporting under the Corporate Sustainability Reporting Directive) and achieving the necessary level in developed countries. Conversely, the neglect of environmental strategies can drastically limit the ability of companies to act and grow and may result in lost opportunities for long-term investment. In the category of economic strategies, the indirect economic impacts are the development of new markets, opportunities for generating new jobs, increased effort toward accessibility, and adaptation to new economic contexts. The results regarding the social category show that companies strive to add value to their businesses by valuing and retaining their talent.
A paradigm shift toward sustainability is evident not only from a practical standpoint but also from a scientific standpoint. Academic interest in corporate sustainability issues has intensified in recent years (Pranugrahaning et al. 2021), but not every form of enterprise has come with a fair balance of scientific results. Although family businesses make up the most common type of companies listed in Africa, Asia, Europe, and Latin America (Broccardo et al. 2019; Curado and Mota 2021), and they are estimated to account for over 70 percent of worldwide gross domestic product (De Massis et al. 2018; King et al. 2022), there is little evidence about sustainability management for this type of enterprise. Moreover, a clear distinction is lacking between family business and other types of companies. The main problem is defining what a family business is in the first place, as different definitions of family businesses can be found in the literature. While family businesses and non-family businesses can be small, medium, or large, they can also differ concerning their values and practices compared to non-family businesses (Behringer et al. 2019). Until now, certain core elements such as financial performance statements, familiarity, and corporate governance in family companies could be identified and considered in definitions (Astrachan and Zellweger 2008; Frank et al. 2010; Siebels and zu Knyphausen-Aufsess 2012; Harms 2014; Fries et al. 2019; Baltazar et al. 2023). However, a recent and comprehensive meta-analysis by Miroshnychenko et al. (2022) notes a possible negative environmental performance in companies that define themselves as having family ownership and management. The inclusion of sustainability in the term “family business,” in addition to the common characteristics of a family business such as family goals or vision and a long-term orientation, is essential to a contemporary definition (Miroshnychenko et al. 2022). Given the hitherto less pronounced but growing interest in the area of sustainability in family businesses (Le Breton-Miller and Miller 2016; Kammerlander 2022), definitions with a corresponding focus are once again being addressed. Chua et al. (1999) in their definitions of the term family business already included the pursuit of a corporate vision in a sustainable manner and thus serve as a starting point for further research (see for example Behringer et al. 2019). Concerning the above-mentioned aspects, the present study adds to the definition of Chua et al. (1999), which still appears to be up to date:
The family business is a business governed and/or managed intending to shape and pursue the vision of the business held by a dominant coalition controlled by members of the same family or a small number of families in a manner that is potentially sustainable [(importance of social and ecological aspects)] across generations of the family or families. (Chua et al. 1999)
Most firms are family firms, but little is known about their approaches to sustainability (Clauß et al. 2022). It seems that despite increasing research in the area of sustainability, the knowledge of how to manage sustainability is limited in family businesses (Traxler and Greiling 2023). As López-Pérez et al. (2018) state, family businesses face complex issues affecting their governance and management that differ from those of non-family businesses. The results of their study suggest that the company profile (a family business vs. a non-family business) moderates the relationship between sustainability and company performance. Mariani et al. (2021) conducted a systematic review highlighting that family businesses and non-family businesses exhibit different behaviors in implementing Corporate Social Responsibility (CSR), with some studies indicating higher CSR performance among family businesses. As the influencing factors with which a company acts and the resulting adaptation of sustainability or the related performance are reported to differ between family businesses and other types of businesses, it would be of scientific value to analyze which strategies family businesses adapt to achieve corporate sustainability. Thus, this article focuses on strategies for corporate sustainability in family businesses and aims to analyze the latest literature. The research question is: What aspects are taken into account by family businesses in their corporate sustainability strategies? We expect the results to provide more clarity on why and how family businesses address the issue of sustainability and yield further insights into the corresponding content of the strategies. In addition, we provide detailed insights into the studies considered by breaking down the results according to geographical focus and the methods applied.

2 Methods

The literature review is considered a necessary tool for systematically evaluating and managing a given body of literature for a specific academic inquiry (Tranfield et al. 2003; Becker et al. 2018). Review articles can challenge established assumptions, identify critical problems and errors, and spark scientific dialogue on a topic (Kraus et al. 2022). However, we emphasize the systematic literature analysis, as it guarantees a high level of impact (Kraus et al. 2024) and transparency due to the structured implementation and clear presentation of content required. Thus, a systematic literature analysis exceeds the possibilities of narrative literature analysis (Hiebl 2023). Moreover, a systematic literature analysis requires a high commitment from researchers (Sauer and Seuring 2023) and enables them to design flexible databases of articles that can be easily updated and interrogated (Pickering and Byrne 2014). With the aim of presenting a clear picture of the strategies relating to sustainability in family firms in the recent literature, we conducted a systematic literature review based on the guidelines proposed by Briner and Denyer (2012: 115). We used a systematic approach to identify relevant studies by combining two of the most comprehensive databases of scientific papers, Scopus (2023) and Web of Science (2023). In a preliminary search process, we searched all literature reviews that dealt with sustainability and family businesses. After reading the papers in full, we brainstormed relevant keywords and an established a set of exclusion criteria in order to define clear boundaries.
To this end, the following three limitations were set:
  • We considered only peer-reviewed scientific journals in English that had a management focus to ensure the identification of high-quality research and to narrow the scope of our review,
  • To capture the current scientific discourse and derive trends for the future, we focused mainly on the years 2006–2022.
  • Publications focusing on technical, political, or natural science focus were excluded.
A custom search string was developed and applied. The multi-part search string contained two keywords that logically limited the subject area. We searched the following term in either the abstract or the title: sustaina* (to ensure that the different variations such as “sustainability,” “sustainable development,” “business sustainability,” or “business sustainability” were captured). The first keyword was connected to a second phrase (specifically, “family business*” or “family firms” or “family enterprise” or “family-controlled firms”). In the first round, a total of 269 hits were achieved. To narrow down the hits in relation to the research question, we selected all journals related to management. This left 128 hits. After we removed the duplicates, 98 hits remained, which were read completely and subjected to content analysis. Compared to systematic literature analyses with a relatively similar context, the number of papers found appeared to be appropriate (for example, compare Morioka and de Carvalho 2016; Aarseth et al. 2017; Lim et al. 2019; Velte 2022). The authors individually read all of the abstracts and, if needed, the entire article to screen them for relevance. The selected sources were then evaluated and analyzed in terms of content. For the literature analysis and synthesis, a concept matrix based on Webster and Watson (2002) was used to structure the content of the results. This step is crucial to synthesizing and organizing a large volume of data and helps to provide an initial impression of the results. Consecutive steps can then be taken to further evaluate the data. Building on that initial analysis, we examined the results of the concept matrix using methodical triangulation (Fig. 1). We then conducted a qualitative content analysis (Mayring 2010: 84) based on the research question “What aspects are taken into account by family businesses in their corporate sustainability strategies?” This was followed by a quantitative content analysis to break down the results according to geographical focus, year of publication, and applied methods (Benninghaus 2005).
The process model of inductive category formation according to Mayring (2010: 84) was used to analyze the results, as this method is highly appropriate for the inductive and qualitative investigation of large amounts of data. In addition, further descriptive analyses were conducted, which provided information on the year of publication, the methodology used, and the location of the study. According to the process model of inductive category formation (Mayring 2010: 84), firstly, the subject of the analysis was defined. The body of literature consisted of 98 peer- reviewed papers. After that, the level of abstraction was set and the material revision and formulation of keywords were carried out. This was followed by a revision of the keywords and a final review of the material. The last step entailed the interpretation and analysis of content.
For the quantitative analysis, descriptive clusters (Benninghaus 2005) were used to classify the body of literature. Descriptive clusters are groupings or categories of similar data points or objects that are identified based on common characteristics or attributes. These clusters are often used in statistical data analysis to improve the structure and organization of large datasets. The content of the literature was assessed using two questions:
(1)
What research methodologies are applied?
 
(2)
Which location is the main focus of the publications?
 

3 Results

This section presents the results of the literature research. Firstly, the qualitative results, based on the application of the process model of inductive category formation, are presented and the research question is answered. Following this, the results of the quantitative analysis, using descriptive clusters, are revealed. The quantitative analysis provides information about the indicators (applied methods and geographical focus of the publication) of the literature.

3.1 Strategies for corporate sustainability management in family businesses

After various stages of processing the material, and running the process model of inductive category formation, three clusters of strategies were identified, which are presented in the following:
Family values and succession planning
Stakeholder relations and communication The predominant focus of the analyzed publications revolved around themes concerning the internal and external relationships within family businesses. This aspect emerges as a pivotal and determining factor concerning sustainability in the context of family enterprises. Understanding and effectively managing the intricate dynamics between family members, as well as fostering productive collaborations with external stakeholders, appears to play a central role in shaping the sustainability strategies of family businesses. Family values, succession planning, and stakeholder engagement emerge as factors that influence the extent to which sustainable practices are integrated into the core operations of these firms. Furthermore, this emphasis on relationships underscores the significance of transparent communication and effective governance structures within family businesses. Establishing clear lines of communication and governance mechanisms can facilitate a shared vision for sustainability and foster collective commitment to long-term sustainability goals. For example, when a non- family business is accused of unethical behavior, it reflects badly on the company, whereas in a family business, it is the reputation of the family itself that is at stake (Curado and Mota 2021). García‐Sánchez et al. (2020) examined this circumstance with an international sample of 956 listed firms and found that family firms perform a higher level of CSR compared to non-family firms. A positive relationship between family firms and sustainability is likely to emerge due to internally driven motivations, such as personal or organizational values and ideas, that align with ESG (Environment, Social, Governance) criteria (Sun et al. 2024). Particularly in the case of an impending generational change, the family’s values are crucial, especially regarding sustainability issues (Astrachan et al. 2020; Anggadwita et al. 2020). Succession planning (Bozer et al. 2017; Wang et al. 2019; Porfírio et al. 2020; Rodriguez Serna et al. 2022a, b; Rodriguez Serna et al. 2022a) and the associated reorientation about sustainability issues, as well as Stakeholder relations (Alwadani and Ndubisi 2020; Nguyen et al. 2020), are the most significant strategies for family businesses.
Risk taking, Inventions, and Technologies
In non-family firms, risk taking refers to the propensity of the organization to engage in ventures, investments, or strategic decisions that involve uncertain outcomes and potential exposure to financial, operational, or reputational hazards. The extent of risk- taking behavior in these firms is often influenced by factors such as organizational culture, management’s risk appetite, market conditions, and regulatory environments. Successful risk taking in non-family firms requires a balance between calculated risk assessment and the pursuit of opportunities that align with the organization’s strategic objectives and risk management framework. The way that risk is managed differs between family and non-family firms, as the perception of operational risk positively affects the perception of financial risk only in family firms (Santos et al. 2022). This circumstance influences the risk behavior of family firms, especially in times of crisis. As an example, the conduct of family firms during the COVID-19 pandemic has been studied by several authors. Anggadwita et al. (2022) identified instances in which family firms during the COVID-19 pandemic developed and implemented resilience. Chaudhuri et al. (2022) highlight the important moderating influence of strategic intent for sustaining family firms in uncertain times. However, apart from times of crisis, disruptive and new technologies also play a major role, with Kazancoglu et al. (2021) identifying Industry 4.0 as a driver for family business resources to improve sustainability.
Entrepreneurship and intrapreneurship
An entrepreneur is an individual who identifies and exploits business opportunities, creates innovative ventures, and assumes significant risk in the pursuit of profit and market success. Entrepreneurs play a crucial role in economies by enhancing and advancing businesses (Gallardo-Vázquez et al. 2023). In contrast, an intrapreneur operates within an established organization, exhibiting entrepreneurial characteristics to drive innovation, develop new projects, and advance the organization’s objectives while often benefiting from the organization’s resources and support. Whereas entrepreneurs act independently and are active within their companies, intrapreneurs are only partially independent because they work within the company as employees (Cadar and Badulescu 2015). Both entrepreneurs and intrapreneurs are crucial when it comes to sustainability in family businesses. Woodfield et al. (2017) explore the linkage between sustainable entrepreneurship and family firms and argue that family firms go beyond seeking financial gain and provide non-economic benefits (such as security and employment) to people and society. Rachmawati et al. (2022) assess family business performance and offer an overview of strategies. They point out that entrepreneurial orientation and family involvement are important factors in performance appraisal in family firms. Jamil et al. (2022) explore entrepreneurial qualities that lead to family business sustainability and indicate four supporting factors (cognitive characteristics, leadership role, motivation, and personality traits). Yet there are also limitations in this regard. Martínez Bobillo et al. (2021) show that efficiency factors in the design and potentiation of the entrepreneurial orientation and innovation capacity by family firms are hindered by the institutional (regulatory, legal, labor, and educational) environment, while more traditional factors such as ownership concentration and firm size are dominant.

3.2 Quantitative analysis of indicators

After the previous qualitative evaluation of results, the quantitative evaluation and graphical illustration of indicators are presented below.
Based in the recommendations Curado and Mota (2021) and Herrera and de las Heras-Rosas (2020), the geographical backgrounds of the publications studied were systematically collected. It should be mentioned that the naming of a geographical focus is always closely related to the selection of the research method. A geographical context is crucial for a case study but not for meta-level investigations, such as a literature review. For this reason, the number of publications that cannot be assigned a geographical focus is relatively high (n=33), which left a set of 65 publications. Among the assignable results, Asia (n=27) and Europe (n=23) are the regions with the highest number of publications. The emphasis on these regions reflects the growing interest and prevalence of family businesses in these areas and their significance in contributing to sustainable development. Only a few publications indicated Africa, America, Australia, or South America as the geographic context (Fig. 2). The predominance of Asia and Europe as the geographic focus in most publications on sustainability in family firms could be attributed to several factors. Firstly, these regions are home to a significant number of family- owned enterprises, making them important contributors to the global economy and sustainability discourse. Secondly, Asia and Europe have witnessed a growing awareness and emphasis on sustainability issues, leading to an increased interest in studying sustainable practices within family businesses in these regions. Lastly, the availability of research funding, academic resources, and established networks of scholars and institutions in these areas may have facilitated the production and dissemination of research on this topic.
According to the literature review by Seuring and Müller (2008), five different research methods were distinguished and each paper (n=98) was assigned to only one method (Fig. 3). Surveys (n=34) were the most frequently chosen method to tackle sustainability in family firms, followed by case studies (n=22) and models (n=19).
The prevalence of surveys as the most commonly used method in papers on sustainability in family firms could be attributed to several factors. First of all, surveys are well-suited for collecting quantitative data from a large sample of family businesses, allowing researchers to obtain comprehensive insights into the prevalence and nature of sustainability practices across a diverse range of companies. Furthermore, surveys provide a structured and standardized approach, enabling researchers to ask consistent questions and compare responses systematically. This enhances the reliability and validity of the findings, making surveys an attractive method for studying sustainability-related phenomena in family firms. Surveys offer a cost-effective and efficient means of data collection, particularly when compared to qualitative methods, which often require extensive time and resources for in-depth interviews or case studies. As sustainability in family firms remains a burgeoning research area, surveys allow researchers to cover a wide range of topics and gather data from a larger pool of respondents. Lastly, the anonymous nature of surveys can encourage respondents to provide more honest responses on sensitive topics, such as internal family dynamics or business strategies. This can lead to a more accurate representation of the actual practices and challenges faced by family firms concerning sustainability.

4 Discussion

Corporate strategy refers to the strategy used to achieve a company’s goals, i.e. to implement the company’s policy (Davies 2000). According to Porter (1996), the […] “essence of strategy is choosing to perform activities differently than rivals do.” A strategy can be considered as a means of deciding what actions to pursue (Evered 1983). In terms of corporate strategy, there are specifics in the case of family businesses. Corporate sustainability strategies encompass deliberate plans and initiatives aimed at fostering the enduring economic, social, and environmental sustainability of a company’s operations. These strategies entail a comprehensive evaluation of the ecological, societal, and economic consequences of business activities, coupled with the implementation of measures to mitigate adverse impacts and enhance positive contributions to society and the environment (Eweje 2011).
Various types of sustainability strategies can be identified, each serving distinct purposes (Baumgartner and Ebner 2010). Introverted strategies focus on risk mitigation, adhering to external standards and regulations to safeguard the company from potential liabilities. Extroverted strategies, on the other hand, emphasize the building of positive external relationships and securing the social license to operate effectively. Conservative strategies prioritize eco-efficiency and cleaner production as a means of enhancing resource efficiency. Lastly, visionary strategies adopt a holistic approach, incorporating sustainability considerations across all business activities. Based on the papers found in our review, we agree with these statements and emphasize that the inclusion of internal (issues such as family succession) and external relationships in sustainability strategies should be considered as a matter of urgency.
Chirapanda (2020) aimed to elucidate the main strategies for family firms to ensure the successful continuation of their enterprises. The author points out that of the family firms surveyed, 60 percent agree that corporate and management strategies must be established along with a properly thought-out succession plan (ibid). In addition to succession planning, conflict strategies are also an important topic in strategic considerations in family businesses, in contrast to non-family businesses. Wu et al. (2018) show that managing the level of conflict between family business board members at an appropriate level by studying the main cause of conflict and identifying its nature led to better performance and sustainable development of family businesses.
As other authors have also recently noted (Henschel et al. 2021), sustainability issues are a continuously growing trend for family businesses, which can be deduced from the increasing number of corresponding publications, especially since 2010. Although sustainability in family businesses is an under-researched field, there have been several recent literature reviews that deal with partial aspects. These include Henschel et al. (2021), who conducted a systematic literature review on the topic of family businesses and CSR. However, the evaluation method (bibliographic coupling analysis) led to a higher degree of abstraction of the results, with a focus on thematic connections and the contexts offered by the bibliographic coupling network visualization. In contrast, the present work goes significantly deeper to qualitatively explore the topics through inductive category formation.
Regarding the limitations of this work, we note that we have not considered peer-reviewed literature or literature not published in languages outside of English in the results of the literature analysis. We acknowledge that there may have been relevant literature in these sources that could have contributed to the summarized results. In addition, we limited our search to two digital databases, Scopus and WoS. Although these databases are extensive, some studies may have been overlooked.

5 Conclusion

Our study offers advice for colleagues and practitioners by highlighting key aspects of sustainability in family businesses. Future research can be developed on these topics and solutions can be offered to these companies. The study also gave family businesses an insight into potential areas for development and provided an overview of three clusters of strategies that have been captured in the recent literature on sustainable family businesses: (1) Family values and succession planning; Stakeholder relations and communication (2) Risk taking, Inventions, and Technologies (3) Entrepreneurship and Intrapreneurship. In addition, we offered insights into the studies considered by breaking down the results by geographical focus, methods applied, and year of publication. We recommend that future research be conducted on the following topics.
(1)
Regarding sustainability, strategies for family businesses’ internal as well as external relationships should be included. Core elements of the studies found relate internally to the topics of family values and succession planning and externally to the topics of stakeholder relationships, including maintaining the good reputation of the family name. We recommend a longitudinal study to follow up on the core elements identified, focusing on the long-term impact of sustainability strategies on the performance and resilience of family businesses and to identify best practices.
 
(2)
A future research direction could be to analyze the possibilities of implementing sustainability strategies based on company size regarding the resources required and in particular concerning technologies in the company, associated costs, and risks for family businesses. This could reveal whether larger family businesses with more capital, for example, are better able to drive forward technologies in terms of sustainability development.
 
(3)
Regarding the topic of family businesses and sustainability, it is important to strike a balance between efficiency/entrepreneurship, family factors, and the quality characteristics of sustainability. In this context, it would be interesting to examine the influence of family management structures and dynamics on the adoption and implementation of sustainability strategies and to analyze how family traditions, values, and decision-making processes influence the integration of sustainability into the core business strategy.
 

6 Data availability statement

Not applicable.

Declarations

Conflict of interest

On behalf of all authors, the corresponding author states that there are no conflicts of interest, nor any financial or non-financial interests to disclose.
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Metadaten
Titel
Exploring strategic corporate sustainability management in family businesses: A systematic literature review
verfasst von
Simone Häußler
Patrick Ulrich
Publikationsdatum
06.06.2024
Verlag
Springer Berlin Heidelberg
Erschienen in
Review of Managerial Science
Print ISSN: 1863-6683
Elektronische ISSN: 1863-6691
DOI
https://doi.org/10.1007/s11846-024-00776-8

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