The preservation and maintenance of socioemotional wealth (SEW) is a priority for family firms. However, theoretical accounts of stocks and flows are rooted in intentional strategic decisions that preserve or sacrifice SEW. We draw from intergenerational solidarity theory to present a model that explains how everyday conflicts in family firms may gradually erode SEW, while intergenerational solidarity can restore it.
In this conceptual paper, we propose how SEW can be lost in family firms and subsequently how it can be restored. We also introduce altruism as a factor that can contribute to the erosion or renewal of SEW, depending on its light versus dark nature.
The proposed model suggests that relational conflict erodes SEW and that intergenerational solidarity restores it via autobiographical memory.
Rather than treating SEW as a stable endowment, the model presented here theorizes SEW as vulnerable to depletion through routine family conflict and subject to restoration through intergenerational solidarity. This paper contributes to the literature by outlining a serial psychological process that shows how SEW can erode and subsequently be restored in family firms. In so doing, the paper extends theory by demonstrating that SEW is a dynamic endowment in family firms that experiences ebbs and flows. From a practical perspective, this model suggests family businesses should promote frequent interactions in order to foster SEW restoration.
