Family business, community embeddedness, and civic wealth creation

Abstract

Family businesses exhibit a strong commitment to address societal challenges and social ills with direct consequences for the neighborhoods, cities, and regions where the businesses are located. In this article, we link these community-minded activities to the idea of civic wealth creation (CWC), a term that captures the local flavor of many positive social change efforts being launched to improve and empower communities. Because of their high degree of community embeddedness (CE), that is, the extent to which an organization is associated with, relies on, and perceives a commitment to its community, we argue that family businesses are especially effective civic wealth creators. To illustrate, we present two examples of the CE–CWC relationship—Bush Brothers & Company in the U.S., and a cluster of Mittelstand companies in Attendorn, Germany. We discuss the practical implications of CE for family businesses and address several future research avenues for investigating CE and the CWC of family firms.