Family social capital and governance of family businesses: The emerging market evidence

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Abstract

Considered as the most dominant business form in the entrepreneurial fabric in Morocco, as in the majority of countries in the world (Salhi, 2017), the family business is distinguished by a family social capital (FSC) making it competitive and perennial (Mesfar & Ben Kahla, 2018). This paper aims to analyze the influence of this capital, through its three dimensions — structural, relational, and cognitive — on the governance system of Moroccan family firms. The results of our exploratory study conducted among 30 family businesses in the form of interviews showed, on the one hand, that the existence of a strong FSC within the company makes its governance system based on informal family mechanisms. On the other hand, the weakness of the said capital has not led the companies that are the subject of our study to adopt formal corporate governance mechanisms as shared by several researchers. This is due, according to the interviewees, to socio-cultural considerations. Our results contribute to the enrichment of the literature while showing that the informality of governance mechanisms can be explained, not only by the strength of its FSC but also by such a socio-cultural context where the family model is of a communal and clan type welded by Islamic religious values of group cohesion.

Keywords: Family Business, Family Social Capital, Corporate Governance

Authors’ individual contribution: Conceptualization — N.M. and A.M.; Methodology — N.M. and A.M.; Investigation — A.M.; Writing — A.M.; Supervision — N.M.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G32, G34, G38, M14

Received: 06.10.2021
Accepted: 04.01.2022
Published online: 06.01.2022

How to cite this paper: Moufdi, N., & Mansouri, A. (2021). Family social capital and governance of family businesses: The emerging market evidence [Special issue]. Corporate Governance and Organizational Behavior Review, 5(2), 225–232. https://doi.org/10.22495/cgobrv5i2sip10