Competitive dynamics in family firms: Transactional versus communal approaches

Abstract

Family business scholarship has neglected the dynamics of competitive rivalry, while competitive dynamics scholars have ignored the familial drivers shaping the competitive behavior of family firms. We bridge competitive dynamics and socioemotional literatures to model family firm competitive behavior. Family firms whose owners prioritize generational involvement as a source of socioemotional wealth often favor long-term, stakeholder-oriented communal competition. By contrast, owners favoring ongoing economic benefits for relatives may favor short-term, family-centric transactional competition. We develop propositions differentiating these competitive models in core characteristics, draw implications for the classic AMC (awareness, motivation, capability) model of competitive attack and response, and propose contrasting competitive action repertoires. We conclude that socioemotional priorities within family firms have important implications for competitive interaction and suggest a rethinking of current views of competitive dynamics.