The Impact of Socioemotional Wealth on the Corporate Governance of Family Firms: The Case of Saudi Arabia

– Research Design
The Impact of Socioemotional Wealth on the Corporate
Governance of Family Firms:
The Case of Saudi Arabia
1

Contents
Executive Summary.........................................................3
Introduction ...................................................................4
Summary of literature.....................................................5
Family Business .........................................................................5
Binding Social Ties .....................................................................6
Critical Group of Stakeholders ....................................................7
Board Member Independence......................................................8
Succession of a Non-family CEO...................................................9
Purpose of Research and Research Questions ..................9
/The Research Design....................................................10
The Research Paradigms................................................10
Research Strategies......................................................12
Summary of Research Paradigm, Strategy and Method....13
Research Methodology..................................................13
Research Method Selection.......................................................13
Data Collection Techniques........................................................15
Sample Selection ..........................................................17
Selection of Organizations.........................................................17
Selection of Individuals within the Organizations........................18
Data Analysis Methods..................................................18
Ethical and Practical Considerations...............................19
Ethical Considerations...............................................................19
Practical Considerations............................................................19
Execution Plan..............................................................19
References...................................................................20
2

Executive Summary
This document presents the research design which off ers an overview of a proposed
r esearch project. The plan includes the researcher’s ontological and epistemological
stance, and his position relative to the research. The data collection mechanism, sample
selection strategy and the method of data analysis are proposed. The goal of the study is
to empirically inform the body of knowledge that considers the impact of socioemotional
wealth on corporate governance and address the research questions:
Q1: What is the impact of the FIBER dimension ‘binding social ties’ of
socioemotional wealth (SEW) on the independence of the board of a family
business in Saudi Arabia?
Q2: What is the impact of the FIBER dimension ‘binding social ties’ of SEW on the
succession of a non-family CEO in a family business in Saudi Arabia?
The research s t a n c e o f t h e r e s e a r c h e r is mainly used the i s t h a t o f interpretivism (or
social constructionism). The researcher recognizes himself as a learner-insider with respect
to the subject matter. A preliminary qualitative, multi-case study will be conducted, utilizing
structured interview. The empirical case studies will be self-identified large family firms
operating across Saudi Arabia. A later phase of the research will utilize a quantitative survey
technique to enable triangulation of the research results and expand validity, reliability and
generalizability. This results in the complete study being mixed method.
3

Introduction
The family business is an essential part of the global economy and holds a prominent place in
many world economies, regardless of the diversity of the economic policies of individual
countries and their place on the global economic map. In many countries, family businesses
represent the largest percentage of total operating companies and of theand their national
economy.
According to the World Bank's Doing Business Report 2013, Saudi
Arabia is ranked 1st in the MENA region and 22nd worldwide for the
ease of doing business. Recently, in the past year, Saudi Arabia
carried out a record number of business reforms, earning the
country a spot in this year’s list of the top 10 global business
climate improvers, through the according to the World Bank
Group’s Doing Business 2020 report. (WorldBank, 2020)
Family businesses in Saudi Arabia are the bedrock of the economy and the focus of on the policy
makers. Each family firm has its own history, dynamics and values and works within a unique culture
and social environment. They demand a good corporate governance that guides the relationship
between family and business and other stakeholders. Family considerations and decision making are
based on nonfinancial aspects are known as socioemotional wealth (SEW). The SEW comprises five
dimensions. One of them is the area of my research ‘Binding Social Ties’ (BST).
The purpose of this research is to address the impact of socioemotional wealth on the
corporate governance of family business in Saudi Arabia. Focusing on ‘
binding social ties’ the
FIBER dimensions of socioemotional wealth (family control, identification with the firm,binding social ties, and emotional attachment and succession intention).
A group of important stakeholders were identified (non-family employees, executives, ex-
executives, ex-CEOs and the nepotism group) who either influence family firms’ decision
makers or still hold important roles within thein the organization.
This research aims to study the impact of ‘
Binding Social Ties’ on socioemotional wealth on
two corporate governance aspects: the succession of a non-family CEO and the independence
of the board of directors. In order to achieve this aim, the research seeks to answer the
following two questions:
Q1: What is the impact of the FIBER dimension ‘binding social ties’ of
socioemotional wealth (SEW) on the independence of the board of a family
business in Saudi Arabia?
Q2: What is the impact of the FIBER dimension ‘binding social ties’ of SEW on the
succession of a non-family CEO in a family business in Saudi Arabia?
4