The relationship of nepotism and socio-emotional wealth: A qualitative study in family businesses

Family businesses are in the focus of academia and researchers due to their properties such as unique structures, demands, cultures, level of corporatisation. However, previous research indicated a large amount of family businesses are in the risk of continuity and only %2 of these businesses could reach up to IV. generation within the family. While this is the case, the literature points out nepotism as the main cause of this problem within the family businesses, which are the lifeline of the national economy. In light of the reasons above, the purpose of this research is to determine the factors causing nepotism and correlating these factors via the term Socio-emotional Wealth (SEW) within the family businesses which are opposed to nepotism and therefore continuity. Perspective of SEW explains how non-family businesses differs from the family businesses in depth. Discovery of specific reasons behind the nepotic behaviour will improve the understanding of SEW, which is the term used to mark the importance of non economical profits within the family businesses. This research consists of two sections. In the first part, previous research related to terms of family business, socio-emotional wealth and nepotism investigated in depth. In the second part, data analysis and research findings related to nepotism and SEW investigated via qualitatively. Throughout the research, 15 family businesses operating in Manisa province interviewed, in order to explain causes of nepotism and to discover the correlation between nepotism and SEW. Following the interviews obtained data converted into text format and analysed via MAXQDA 2020 software. As a result of the analysis, a total of 15 sub-factors belonging to the 5 sub dimensions determined as a result of the conceptual framework of the SEW and a total of 33 codes for these factors were created. These codes confirm that each dimension of SEW provides unique non-economic benefits to family businesses and that SEW is an umbrella concept of common family goals. As a result of the analyses conducted to reveal the causes of nepotism, a total of 4 factors belonging to 3 sub-dimensions determined as a result of the conceptual framework of the Nepotism were formed. These factors demonstrate that nepotism is implemented due to trust effect, shareholding effect, kinship bond effect and capital protection effect. As a result of the analysis conducted to determine the relationship between the causes of nepotism and SEW, findings supporting the basic assumptions were obtained. Accordingly, the factors that cause nepotism have a strong relationship with SEW and the concept that emphasises the SEW theme the most among these factors is "Shareholding Effect".