Guardians of Reputation: How Stewardship Climate Mobilizes Nonfamily Employees to Defend Against Reputational Threats

Abstract

Family firms enjoy strong reputations, but deep ties between family and business make them vulnerable to reputational threats. We examined the psychological ownership (PO) gap between family and nonfamily employees and its effect on reputational defense behaviors, theorizing stewardship climate as one way to inspire nonfamily employees to defend the firm’s reputation “like family.” Using a multisource study of Irish family firms, we show that stewardship climates elevate nonfamily employees’ PO, motivating them to defend the firm’s reputation. Our study validates a new firm-level measure of reputational defense behavior and reveals the power of stewardship, especially when reputation feels threatened.