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Sins of the Father’s Firm: Exploring Responses to Inherited Ethical Dilemmas in Family Business

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  • Reginald Litz
  • Nick Turner

Abstract

How do individuals respond when they perceive that their family business has been built upon unethical business conduct? Drawing on an expanded version of Hirschman’s typology of generic responses to declining situations (Exit, Voice and Loyalty: Responses to Decline in Firms, Organizations, and States, Harvard University Press, Cambridge, MA, 1970 ), which includes responses of Exit, Voice, Loyalty, and Neglect, we offer a model that predicts probability of intended response behavior as a function of normative obligation (i.e., what one perceives ought to be done), managerial discretion (i.e., what one perceives can be done), and successor commitment to the firm. The model is tested on 124 business school students exposed to a scenario depicting an inherited ethical dilemma occurring in a family business from Arthur Miller’s play All My Sons, and shows support for elements of the proposed framework. Most notable is a significant negative relationship between normative firm-directed commitment and the response of Neglect. Copyright Springer Science+Business Media B.V. 2013

Suggested Citation

  • Reginald Litz & Nick Turner, 2013. "Sins of the Father’s Firm: Exploring Responses to Inherited Ethical Dilemmas in Family Business," Journal of Business Ethics, Springer, vol. 113(2), pages 297-315, March.
    • Handle: RePEc:kap:jbuset:v:113:y:2013:i:2:p:297-315
    DOI: 10.1007/s10551-012-1305-7
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    Cited by:

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    2. Kimberly A. Eddleston & Jay P. Mulki, 2021. "Differences in Family-Owned SMEs’ Ethical Behavior: A Mixed Gamble Perspective of Family Firm Tax Evasion," Entrepreneurship Theory and Practice, , vol. 45(4), pages 767-791, July.
    3. Kowalik, Elena, 2023. "Ethical Problems in Family Firms," Junior Management Science (JUMS), Junior Management Science e. V., vol. 8(2), pages 431-452.
    4. Hashim, Sumaya & Naldi, Lucia & Markowska, Magdalena, 2021. "“The royal award goes to…”: Legitimacy processes for female-led family ventures," Journal of Family Business Strategy, Elsevier, vol. 12(3).
    5. Silvana Signori & Yves Fassin, 2023. "Family Members’ Salience in Family Business: An Identity-Based Stakeholder Approach," Journal of Business Ethics, Springer, vol. 183(1), pages 191-211, February.
    6. Rongjia Su & Dianjie Liang & Weili Teng, 2023. "The impact of Confucianism, Taoism, and Buddhism on CSR practices in family businesses in China," Asian Business & Management, Palgrave Macmillan, vol. 22(4), pages 1394-1417, September.
    7. Gazi Islam & Michelle Greenwood, 2023. "Ethical Research in Business Ethics," Journal of Business Ethics, Springer, vol. 182(1), pages 1-5, January.
    8. Pedro Vazquez, 2018. "Family Business Ethics: At the Crossroads of Business Ethics and Family Business," Journal of Business Ethics, Springer, vol. 150(3), pages 691-709, July.
    9. Rau Sabine B., 2013. "Emotions Preventing Survival of Family Firms: Comments on Exploring the Emotional Nexus in Cogent Family Business Archetypes: Towards a Predominant Business Model Inclusive of the Emotional Dimension," Entrepreneurship Research Journal, De Gruyter, vol. 3(3), pages 425-432, July.
    10. Hanisch, David N. & Rau, Sabine B., 2014. "Application of metric conjoint analysis in family business research," Journal of Family Business Strategy, Elsevier, vol. 5(1), pages 72-84.

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    Keywords

    Family; Business; Inherited; Dilemma;
    All these keywords.

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