Family ownership and other owners’ characteristics explaining SME’s environmentally friendly practices engagement: Adapting the upper echelons theory perspective

Applying the dominant coalition concept to firm owners and building on the tenets of Upper Echelons Theory and the ability-willingness framework, we examine the contingent role of owner-firm eponymy, owners’ social values, and owners’ community ties on the relationship between family ownership and environmentally friendly practices (EFP) engagement in small- and medium-sized enterprises (SMEs). Results from a stratified random sample of 243 Dutch SMEs indicate no main effect of family ownership, nor any interactions with the other three owner characteristics. However, additional results show that owner-firm eponymy and owners’ social values have positive main effects on EFP engagement. As such, our findings clarify the impact of owners’ coalition-centered noneconomic goals, such as enhancing reputation and implementing social values, which extend beyond purely family-centered goals. Furthermore, resonating with the debate on the role of economic versus noneconomic goals, a positive interaction between family ownership and financial benefits on EFP engagement suggests that economic goals accentuate the effect of family ownership, consistent with a mixed-gamble logic.