Social capital of family businesses: The influence of critical events in the macro-environment

Our study is set to investigate the way critical events influence social capital of family firms. We focus on macro-economic shocks (Hoffman, 1999; Ramey, 2016) that can trigger organisational transformation (Fligstein, 1991; Tan & See, 2004). We examine this phenomenon in the context of family-owned SMEs (Gersick et al., 1997; Lansberg, 1999), experiencing and dealing with a financial crisis as an instance of such shock. We consider family businesses as businesses in which the family has a hand-on involvement in the management of the business (Astrachan et al., 2002; Shanker & Astrachan, 1996). We examine social capital at the organisational level, which refers to resources an organisation accumulates as part of relations within and beyond its boundaries (Fischer & Pollock, 2004; Herrero & Hughes, 2019; Zahra, 2010). We consider the structural and relational properties of social capital (Moran, 2005; Nahapiet & Ghoshal, 1998). Structural social capital relates to the configuration of linkages between actors such as individuals and organisations upstream or downstream the value chain (Burt, 1992; Granovetter, 1985). Relational social capital focuses on the normative conditions that drive the relationships between actors in networks (Nahapiet & Ghoshal, 1998). Considering the above, we address the following research question: How do critical events influence a family firm’s structural and relational social capital?