Socioemotional Wealth (SEW): Questions on Construct Validity

Abstract

Over the past decade and a half, there has been tremendous growth in the family business field of study. One of the most important developments during this time period is the concept of socioemotional wealth (SEW), which is primarily founded on the seminal work of Gomez-Mejia, Haynes, Nuñez-Nickel, Jacobson, and Moyano-Fuentes in 2007. In fact, the number of articles that reference SEW has risen from 3 in 2007 to 147 in 2018 within the Web of Science categories of Business, Management, and Economics. For Family Business Review, the 2012 article by Berrone, Cruz, and Gomez-Mejia has had over 1,200 Google Scholar citations, as of October of 2019, and continues to be one of the most accessed articles year to year. Throughout this expanding literature, SEW—also known as affective endowments—is generally referred to as the noneconomic utilities derived by principals (i.e., the family) from a business. Based on prospect and behavioral agency theories, SEW is argued to serve as the main frame of reference for the management of the family business (Gomez-Mejia, Cruz, Berrone, & De Castro, 2011). As such, family businesses are motivated by the desire to preserve or enhance SEW when making major strategic decisions (Berrone et al., 2012). While the very basic tenets of SEW are well established and widely utilized, the promise of SEW as a construct—that is, a postulated concept or attribute intended for study (Cronbach & Meehl, 1955)—has yet to be realized. For while progress continues to be made, there are numerous concerns—both conceptual and empirical—that have been expressed regarding SEW and how it has been applied in family business research (e.g., Chua, Chrisman, & De Massis, 2015; Kellermanns, Eddleston, & Zellweger, 2012; Miller & Le Breton-Miller, 2014; Schulze & Kellermanns, 2015). Fundamentally, these concerns point toward a general lack of clarity regarding the validity of SEW as a construct, where validity refers to the extent to which a measure accurately represents a concept. The purpose of this editorial is to outline several problematic areas regarding SEW as a construct and make an explicit call for more theoretical and empirical development in this important and fast-growing area of research. For as AC/DC laments, it is a long way to the top if you want to rock ‘n’ roll.