EMOTIONS AND COMPETITIVE ADVANTAGE: A GOVERNANCE APPROACH OF ENTREPRENEURIAL AND FAMILY BUSINESSES
Professional Development Workshop at AOM 2016
Anaheim, (California), 5-9, 2016
Making Organizations Meaningful
Organized by:
Giorgia M. D’Allura, PhD
Assistant Professor of Business and Management
University of Catania
Corso Italia, 55 – Catania
Phone: 0039 095 7537638
Fax: 0039 095 7537610
Rania Labaki, PhD
EDHEC Business School
France
Phone: 0033 663603725
Primary sponsor: (a) Entrepreneurship
While “the affective revolution” (Barsade et al., 2003) clearly affected the organizational behavior literature since the 1980s, very little of it penetrated the strategic management, and specifically the governance literature. This gap seems most prominent when it comes to entrepreneurial and family firms (Labaki, 2013, Rafaeli, 2013). This is unfortunate because the governance bodies of these firms relate to two systems, the business and the family, consisting of individuals and teams who have emotions. These emotions are likely to shape their interactions and influence their decisions depending on the degree of overlap between both systems. Seminal research articles within the entrepreneurship and family business field illustrate this fact, and argue for more conceptual and empirical research on this topic (Cardon et al., 2012; Goel et al., 2013; Labaki et al., 2013). In order to facilitate further knowledge development in this domain, this PDW brings together scholars from the area of OB who are conducting research on emotions with governance, strategy, entrepreneurship and family business scholars who are interested in emotions. Our question is how and to what extent governance may contribute to fueling and shaping different types of emotions, influencing the interpretation of the internal resources as well as the external conditions, therefore contributing to building, weakening or strengthening the competitive advantage of these firms. Thus, the PDW creates an arena to provoke thinking about how emotions that have already been investigated in OB could be incorporated into future studies and development of teaching programs of entrepreneurial and family businesses.
PDW OVERVIEW
Workshop goal
The workshop goal is to advance our understanding of how emotions affect and are affected by the structure and processes of governance in entrepreneurial and family businesses (corporate governance and family governance). Our hope is that this workshop would lead to the development of theories and empirical research as well as teaching programs to increase our knowledge of how inhibition or enhancement of certain emotions via governance in the organizational context may impact the firm’s competitive advantage.
Part I: State of the art of the latest research on the theme
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Sigal Barsade Professor of Management |
Wharton – University of Pennsylvania Department of Management USA |
(10 min) |
|
Amir Erez Professor of Management
|
University of Florida Warrington College of Business Administration Department of Management USA |
(10 min) |
|
Rosario Faraci Professor of Management |
University of Catania Department of Economics and Business Italy |
(10 min) |
|
Ronald Humphrey Professor of Management |
Ronald H. Humphrey Virginia Commonwealth University Department of Management USA |
(10 min) |
|
Anita Van Gils Associate Professor in Entrepreneurship and Family Business |
Maastricht University Department of Organisation and Strategy The Netherlands |
(10 min) |
Part II: Roundtables on emotions and governance
Table 1: Happiness and Empathy Table : Dr. Amir Erez – University of Florida (USA), Dr. Ronald Humphrey, Virginia Commonwealth University (USA).
Table 2: Hope and Fear Table: Dr. Sigal Barsade – Wharton School of Management (USA), Dr. Giorgia M. D’Allura – University of Catania (Italy)
Table 3: Anger and Hostility Table: Dr. Pauline Schilpzand – Oregon State University (USA), Dr. Rosario Faraci - University of Catania (Italy)
Table 4: Envy Table: Dr. Yochi Cohen-Charash – Baruch College and Graduate Center – CUNY (USA), Dr. Anita Van Gils- Maastricht University (The Netherlands)
Table 5: Regret and Disappointment Table: Dr. Andy Woolum – University of Florida (USA), Dr. Rania Labaki - University of Bordeaux (France)
Among questions to be addressed on each table:
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Develop a list of critical issues on the relationship between emotion and governance
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Reflect on its consequence on competitive advantage of entrepreneurial and family organizations
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Suggest a list of propositions for potential research directions
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Discuss innovative methodologies to address the research on this theme
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Discuss how to teach related topics in management class
Part III : Plenary session : discussion and future research directions
Some Reflection from the PDW2016
While research on the role of emotions in organizations started taking off only three decades ago, research on emotions in family businesses is still very scarce. Different from non-family businesses, members in family businesses not only share the same organization but also the same family. Emotions flow from the family to the business, and vice versa, affecting both the family and the business. This adds another level of complexity to the analysis since researchers are required to account for two systems rather than one and explore the deep roots of the family business over generations. With this event, we decided to go one step further. In our Workshop, we brought together renowned scholars from different fields to inspire us on the latest research and methods of study on the emotional dimensions. After an introduction by the Organizers, we talked about the state of the art of emotions in the family business field, Professor Sigal Barsade from Wharton – University of Pennsylvania (USA) shared her insights from a study on Hope and Fear in the Escalation of Commitment in Entrepreneurial Settings. Professor Amir Erez from the University of Florida (USA) introduced us to a promising and groundbreaking method for studying emotions: the Experience Sampling Method. Professor Ronald Humphrey from Lancaster University (UK) made a presentation connecting the dots between major constructs in relation with Authentic Leadership: Emotional Intelligence, Empathy, and Positive Affect.
Following these inspiring presentations, we invited additional experts on specific emotions - such as happiness, anger, hostility, envy, regret or guilt - to head and moderate round table discussions with the participants of the workshop: Professors Pauline Schilpzand from Oregon State University (USA), Anita Van Gils from Maastricht University (The Netherlands), Marina Biniari from Alto University (Finland), Yochi Cohen-Charash from Baruch College (USA), and our colleague Fabian Bernhard from EDHEC Business School (France).
By joining a table labeled with a specific emotion of their interest, participants were able to exchange with each other in order to draft the future agenda for family business scholars and engage in cross-collaborations. Speakers from each table finally reported back to all participants the outcomes of their discussions. This Workshop stands therefore at the first stage of ongoing future meetings in this direction. Although no consistency exists in research today about whether the influence of specific emotions on decision-making, creativity or performance is positive or negative, one thing is for sure: the influence is to different extents real. This Workshop has built basis for further research and pedagogical collaborations on emotions in the family business field.
The participants agreed on the relevance of analyzing the differences between family and non-family organizations and the inter-connectedness of different emotions in the family business.
The theoretical perspective that was suggested to study emotions was the family business systems view. This entails taking into account the whole system, by exploring all stakeholders’ interactions in the family and the business, instead of focusing on the emotions of one key-family member per se.
In methodological terms, researchers emphasized the relevance of triangulation of data, by using neurological and other biological measurements in combination with scenario analysis, quantitative scales of emotions, and in-depth interviews with family business stakeholders.
Among the outcomes of the discussion, it appeared clear that researchers analyzing regret, guilt, envy and jealousy should take into account the history of the family to explain patterns that people carry from childhood. The family is a place with a lot of stakes, was it about power or money, which makes it a fertile ground to shape emotions.
As emotions can be mutually influential, it is important to have a dynamic perspective by taking into account how certain governance mechanisms helping deal with an emotion on the short-term might trigger another one on the long-term. By reducing envy because of injustice perceptions for example, one might create or increase jealousy. In the same time the emotion of guilt can be felt by the current generation for wrong-doings by the past generation. Emotions can carry different dimensions. The emotion of regret takes into account past experiences and can be anticipated based on them when it comes to decision-making. While the dimensions of empathy can range from “cognitive empathy” that is being aware of emotions the others are feeling to “affective empathy” that is feeling other’s emotions to some degree, the “interactive empathy” allows a better understanding of the leaders’ influence in the workplace. Empathetic family business leaders negotiate change in emotions and shape the emotions of their followers to move into a more productive stage.
Last but not least, scholars reflected on how to teach family business students about emotions. In this occasion the experience of the Business Theater of the University of Catania was introduced considering it as a relevant tool to teach family business and introduce the students to the big world of the relationshio between emotions dynamic and decision making process.
Giorgia D'Allura and Rania Labaki