Socio-emotional wealth preservation and alliance success in family firms: the role of political instability and alliance management capability

Al-Tabbaa, O. and Nasr, A. and Zahoor, N. and De Silva, Muthu (2023) Socio-emotional wealth preservation and alliance success in family firms: the role of political instability and alliance management capability. British Journal of Management 34 (2), pp. 915-941. ISSN 1045-3172.

Abstract

The socio-emotional wealth preservation (SEW-P) can create a dilemma for family firms when seeking to establish strategic alliance: how to manage the need to establish strategic alliances aimed at obtaining complementary network-based resources (the economic dimension) with the fear that such a move may jeopardize the family control and domination (the SEW dimension). To address this dilemma (also labelled as a ‘mixed gamble’), we theorized that the concern to preserve the SEW (i.e., SEW-P) can contribute to family firms alliance success dependent on the leverage of alliance management capability (AMC). We also propose that the SEW-P can act as an organizational cognitive enabler for AMC. Yet, the positive association between SEW-P and AMC will become stronger when the family firms operate in a politically unstable environment. We tested these hypotheses using a unique dataset collected from 302 family firms operating in a politically unstable environment (the Libyan context), and the analysis lends support to our model and predictions. Overall, the study advances the alliance theories and family business literature by adding new insights that explain the effect of nonfinancial priorities of family firms, and its related contingencies, in predicting alliance success.

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