Trees in the Forest: How Do Family Owners Make CSR Decisions in Business Groups?

Won-Yong Oh (), Hojae Ree (), Young Kyun Chang () and Igor Postuła ()
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Won-Yong Oh: University of Nevada, Las Vegas
Hojae Ree: Sogang University
Young Kyun Chang: Sogang University
Igor Postuła: University of Warsaw

Journal of Business Ethics, 2023, vol. 187, issue 4, No 7, 759-780

Abstract: Abstract Previous studies have been split over how to view family owners’ CSR engagement, arguing that they either engage in or disengage from CSR based on different motives (i.e., preserving socio-emotional wealth vs. seeking rent expropriation). Focusing on family owners in business groups, this study integrates these divergent views. We hypothesize that family owners would pursue both motives simultaneously by optimizing the level of CSR of each affiliated firm depending on their ownership level. Furthermore, we argue that this tendency is moderated by group-level contexts. Using a sample of Korean business groups, we found that family ownership is negatively associated with affiliated firms’ CSR. Also, this negative relationship is more pronounced when firms belong to business groups with more charitable corporate foundations and when business networks are greater in their scope and scale. This study contributes to the literature by offering a more complete understanding of how family owners make CSR decisions in business group contexts.

Keywords: Business group; Corporate governance; Corporate social responsibility; Family ownership; Rent expropriation; Socio-emotional wealth (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10551-022-05270-3

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