INNOVATION AND ENVIRONMENTAL PERFORMANCE OF LARGE FAMILY FIRMS IN KUWAIT: THE INFLUENCE OF SOCIOEMOTIONAL WEALTH, MINDFUL ORGANIZING, AND PSYCHOLOGICAL OWNERSHIP

Abstract

Despite the urgent need for increased business sustainability performance in general, the growing interest of researchers and practitioners in sustainability performance of family firms, and an extensive literature on socioemotional wealth (SEW)-a non-economic aspect unique to family businesses, there is a lack of research on the role of SEW in enhancing family firms' environmental and innovation performance. Specifically, the investigation of the relationship between SEW and non-economic performance of family firms is still lacking, particularly in the oil-rich emerging economies contexts where sustainability continues to receive just a little more than a lip service. This study therefore examines the influence of the five dimensions of SEW (family influence and control, identification of family members, binding social ties, emotional attachment of family members, and renewal of family bonds) and the mediating roles of mindful organizing (MO) and psychological ownership (PO) on innovation performance (IP) and environmental performance (EP). The study integrates the stakeholder theory, agency theory and stewardship perspectives, mindfulness theory and socioemotional wealth theory in its inquiry to provide further evidence for the relationship between family firms' socioemotional wealth and environmental and innovation performance, as well as the mediating role of mindful organizing and psychological ownership. A multi-stage mixed-method research design including qualitative and quantitative approaches was adopted in the study. Quantitative data for the main study were collected from 386 owners and managers of large family firms in Kuwait using systematic random sampling technique were analyzed using structural equation modelling (SEM). Three alternative models were proposed and assessed by means of Smart PLS: Model 1-the direct effect model (SEW->IP & EP); Model 2-the single mediation model (SEW->MO->IP & EP and SEW->PO->IP & EP); and Model 3-the serial mediation model (SEW->MO->PO->IP & EP). Evidence of both the direct effects of SEW and the indirect (single and serial mediation) effects through MO and PO were unveiled, with both mediators serving as effective mechanisms through which the effects of SEW are transmitted to firm performance in many cases. The findings suggest several theoretical and practical implications for advancing the understanding of family business non-economic goals and strategies for improving family business innovation and environmental performance. The study also identifies a number of potential directions for future research that would provide forward-looking information on how to enhance the social, environmental and innovation performance of family firms in both emergent and developed economies.