An exploratory study of the effects of socioemotional wealth in the perception of humanistic management and psychological ownership in family and non-family members in Latin American family firms

This chapter studies how the level of socioemotional wealth (SEW) in a family firm, measured throughout the FIBER model, affects the application of humanistic management principles, perception of fairness, and how it influences psychological ownership in non-family members. The purpose of this chapter is to understand under which circumstances the application of humanistic management principles in the family firm is either more helpful or detrimental to generate a sense of fairness amongst all employees and how it is affected by SEW. Through comparative analysis of six cases of Latin American family firms that are at least second generation and have had family members involved in the firm, this chapter found some patterns across the cases which, with support of the literature, help us develop some propositions. Findings suggest that family firms with greater level of SEW have lower levels of perception of organisational justice (distributive and procedural) and psychological ownership of non-family employees. Additionally, to measure organisational justice as a proxy to humanistic management, we also developed our own scale of HM and found that high level of SEW is negatively related to the incorporation of humanistic principles, in general, in family firms. Also, we found some evidence that, when incorporating humanistic principles as part of family values, they are mostly applied to family members and not so much to non-family members. We also propose a model where all our propositions come into place.