The Role of Family Firms in Corporate Sustainability

Abstract

The societal concern for sustainable development has translated into corporate sustainability as a management idea, which has yet to be widely adopted. This chapter examines its adoption in family firms. With their transgenerational temporal orientation and long leadership tenures, combined with decision-making by a closely knit dominant coalition that can facilitate a shared vision and organizational control, family firms can be effective conduits for the diffusion and adoption of this management idea. While these characteristics increase the likelihood of adoption by family firms in general, the diffusion of corporate sustainability between family firms would differ depending on the firm’s engagement with the institutional environment and the timing within the family business lifecycle. An examination of the adoption of the idea of corporate sustainability in cases of three family firms offers lessons for diffusion in firms more broadly.