Literature on sustainability is extensive, and the topics to be addressed are numerous. Given the specific attributes of FFs, the theoretical support for FFs sustainability studies usually adopt the five main theories that we present next.

3.2. Socio Emotional Wealth (SEW) Theory

The socio emotional wealth (SEW) theory reflects the prospect of accumulating and preserving heritage for future generations, such as keeping the good name of the family and its reputation intact [6,32]. According to Marques et al. [5], the SEW perspective posits that families are typically motivated to preserve their social and emotional heritage. This preservation means maintaining their emotional ties with the family business, because they usually want to pass their businesses on to future generations. Therefore, they take a long-term approach that maintains and builds a strong relationship with their stakeholders [33]. However, the fact that they are more focused on preserving the organization’s SEW, can make managers (family members) less willing to invest in activities that do not generate direct profits, such as CSR practices [33]. FFs adopt sustainability practices not only at an economic level, but also at a social and environmental level, in order to build and maintain a strong relationship with their stakeholders and to conserve a good reputation [33]. Thus, sustainability practices are beneficial in building SEW.

3.3. Corporate Social Responsibility

The sustainability practices to improve the social and environmental common good that voluntarily go beyond the firm’s own interests by involving its operations and interactions with stakeholders are called CSR [6]. CSR practices have become intrinsic to the organization’s strategy [1] due to the growing interest in their application [23]. The positive impact such practices have on their relationship with stakeholders improves the organization’s reputation [6]. Since one of the most significant issues that are esteemed for FFs is their reputation and the longevity of the business, the correct management of CSR is essential [1]. However, not all organizations demonstrate their CSR in the same way, as CSR strategies depend on a set of decisions made by the organization’s managers [5].

3.4. Stakeholder Theory

The stakeholder theory influences the decision-making of firms [34]. The stakeholders have the capacity to harm FFs and jeopardize the organization’s longevity by choosing to allocate their resources elsewhere. Therefore, it is imperative to guarantee it by properly managing the contributions of the stakeholders to the organization [23], since they are at its core [34]. The relationship stakeholder-organization is therefore vital for FFs, and thus managers should recognize the strategic importance that stakeholders hold. Although the organization’s main objective is to generate returns for its owners, it must also recognize the needs of its other stakeholders [23], such as social actors in the community who may directly or indirectly influence the organization [34]. Thus, the disclosure of the results of sustainability practices are seen as the “dialogue” between the organization and its stakeholders. According to this perspective, organizations have a motivation to carry out and communicate their sustainable social and environmental activities in order to obtain greater visibility and notoriety with their stakeholders. The application of these practices is increasingly relevant for stakeholders, and essential to the organization’s reputation [7].

3.5. Resource-Based View (RBV)

The resource-based view (RBV) assumes that an organization’s competitive advantage is supported by the resources it has available and the way it manages them [35]. These resources can be both tangible and intangible, and their relevance is measured against the resources that the organization’s competitors hold. However, intangible resources are more difficult to imitate and are usually a greater source of competitive advantage [36]. Intangible resources involve knowledge, learning capabilities, culture, teamwork, human capital [37], competencies, organizational memory, mental models, and technical aptitudes in shared problem-solving [38]. When they are unique, they support competitive advantage [36]. However, they only support sustained competitive advantage when they are cumulatively rare and valuable but cannot be imitated nor replaced [37]. In the case of FFs, family involvement and the pre-existing relationship between family members are intangible resources, and because they are difficult to imitate and replace, they may be considered a source of competitive advantage [39]. Given that family values are central to FFs’ organizational culture, intangible resources benefit them in acquiring competitive advantage compared to NFFs [36]. FFs usually benefit from more patient stakeholders, they have a greater focus on survival, and they have a more flexible organizational structure [35], that facilitates the application of sustainability practices. The management of FFs’ resources based on sustainability practices makes their imitation more difficult and makes the generation of greater returns possible and, consequently, a greater competitive advantage from them [40].

3.6. Stewardship Theory

The stewardship theory proposes that individuals are motivated to make decisions for the benefit of others [33]. The assumption is that stewards are motivated to act according to the needs of their organization because they identify with it and act according to the firm’s goals, even if it means making some personal sacrifices [41]. FFs aim to achieve long-term stability through a high level of commitment to the community along with the responsibility they feel as business-owners [27]. Such a combination of interests embodies the stewardship theory in promoting sustainable goals in FFs. Thus, studies have explored this theory to explain the competitive advantage that FFs have over NFFs. There is a similarity between the culture of the family and the FF [33] due to the pre-existing relationship between family members, since they have a long experience in communication and interactions with each other [41]. Thus, the Stewardship Theory serves the implementation of sustainability practices, since family member managers are emotionally connected to the organization, which results in a long-term focus and superior performance [33]. FFs aim to achieve long-term stability, revealing a high level of commitment to the community, along with the responsibility they feel as business-owners [27]. Such combination of interests embodies the implementation of the stewardship theory in serving sustainable goals in FFs.

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