Balancing natural environmental concerns of internal and external stakeholders in family and non-family businesses

While researches have long suggested that firms must be attentive to their key stakeholders, the question of how attention to different stakeholders may have different benefits for different firms has not been well addressed. This is especially true in the case of family businesses, which confront a unique set of stakeholder challenges, and socioemotional goals not confronted by non-family firms. In this study, we investigate the effect of these competing demands across family and non-family firms. We argue that while being attentive to both internal and external stakeholders is important to firm performance in family and non-family firms, family firms can benefit more when they match their concern for natural environmental stakeholders with a demonstration of concern for their employees. By effectively leveraging the power of these critical internal stakeholders, family firms can gain competitive advantages over non-family firms as it is through these internal stakeholders which the demands of external stakeholder are often met.

► In family firms, concern for internal stakeholders (employees) positively moderates the relationship between concern for environmental stakeholders and financial firm performance.
► For family firms, socioemotional wealth is a higher priority than financial wealth.
► In non-family firms, concern for environmental stakeholders is positively associated with financial firm performance and represents the only significant link.