Family business paradoxes

In foreign studies, in contrast to Russian ones, a rather deep tradition of studying family business has developed. However, there is still no consensus of opinion both on the issue of the effectiveness of family companies in comparison with nonfamily ones, and on the factors that determine this. The issues of the contribution of socially responsible behavior to the efficiency of company activities also remain open, with researchers debating the degree to which such behavior impacts long-term sustainability and profitability across different economic systems. The aim of the study is to assess how effectively family companies are managed in Russia in comparison with non-family socially responsible ones. The resulting increase in knowledge will make it possible to approach the solution of the circle of problems outlined above, particularly regarding the interaction of social responsibility, economic performance, and trust. The comparative quantitative study of the performance of the largest Russian family companies and the most socially responsible non-family companies was conducted. For this purpose, two samples were analyzed by using the Mann-Whitney U test. The first one consists of 12 randomly selected non-family companies holding leading positions in the Social Responsibility Rating of Russian Companies; the second one consists of family companies included in the same rating. The study of the list of companies included in the sample showed that none of the family companies belong to the group of leaders according to the "social responsibility" criterion, in contrast to the studied non-family enterprises. The analysis of the economic performance indicators of their activities revealed that Russian family companies, although generally occupying lower positions in the Social Responsibility Rating, are nonetheless more effective in terms of ROE and are at a comparable level in terms of net profit indicator. This allowed putting forward and arguing a hypothesis that the parameter "trust", being poorly measured by the "social responsibility" rating, plays a significant role in the activities of family-owned companies. It performs part of the functions assigned in non-family companies to activities denoted by the term "social responsibility". The article also shows that trust performs several key functions in family businesses. High levels of trust between family members reduce transaction costs. High levels of trust in companies allow for quick consensus building and minimize internal conflicts. Family businesses are more likely to cooperate under conditions of uncertainty or stress. Trust also encourages decision-making that takes into account future generations rather than short-term gains, enhancing not only operational stability but also strategic resilience in competitive markets. The author declares no conflicts of interests.

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