Storytelling and cultural family value transmission: Value perception of stories in family firms

Abstract

This study analyses the transmission of cultural family values in family firms through storytelling. Specifically, we investigate whether cultural family values that are intended to be imparted by a story and its teller are also perceived accurately by listeners (i.e. the intended imparted value and the perceived value are congruent). We use a mixed-methods design including a qualitative phase, which identifies stories told in three German family firms, and a quantitative phase, which analyses the value perception (i.e. subjective cognition) of 226 individuals from outside the firm for a selected number of six stories. Results indicate that the intended values of the selected stories are perceived accurately by the individuals. Hence, stories might describe a useful means for transmitting cultural family values in family firms.

Keywords

Cultural values family firms narratives storytelling value perception value transmission

Introduction

The organizational culture of family firms has been identified as a strategic resource that can generate a competitive advantage (Barney, 1986, 1991). According to Schein (1983, 2001), organizational cultures are based on three levels with the lowest level representing assumptions, which can be seen as implicit, shared and taken-for-granted values. Schein (2001) states that ‘if we are talking about shared, taken-for-granted, non-negotiable, largely unconscious values – what I would call assumptions – then we are really talking about the essence of culture’ (p. 46). Aronoff (2004) emphasizes ‘the importance of family values as the pillars of the family business’s [organizational] culture […] enabling the company to be differentiated from other enterprises’ (p. 57).

In this study, we focus on two types of ‘cultural’ values, either the cultural values of the owning family (i.e. cultural family values) or the cultural values of the family firm (i.e. cultural family firm values). Cultural family values can be described as being socially imparted and shared within the family (Roth et al., 2009). They serve as guidelines for family members as they determine the development of the social identity of the family (Verplanken and Holland, 2002). Furthermore, cultural family values affect the perception and behaviour of the family members (Meglino and Ravlin, 1998), are valid irrespective of object and situation (Hitlin and Piliavin, 2004) and remain stable over time (Klein, 1991). We follow the understanding of values by Schwartz and Bilsky (1987), who understand values as beliefs that transcend specific actions and situations. Otherwise, they would be norms. This means that cultural family values must be valid in the owning family sphere as well as in the family firm sphere and valid across different situations or processes. Research shows that the presence of strong cultural family values favours the development of a distinct organizational culture in family firms (Astrachan et al., 2002). Furthermore, due to the dominant role of the founder and succeeding family members, these cultural family values are powerful cultural drivers across generations (Hall and Nordqvist, 2008). Thus, cultural family values play an important role in family firms’ organizational cultures (Vallejo, 2008). We assume that individual values of family members and cultural family values are congruent. Hence, in this study, we explicitly focus on the transmission of the cultural values of the owning family to the family firm. To embed these cultural family values in the family firm in the long term, they need to be imparted to other stakeholders (e.g. non-family employees and managers) of the family firm. Due to the overlap between family and business systems, the perception of personal and family values can be ambiguous in family firms. Hence, in particular, for family firms, it is important to use a means to impart family values that eliminate ambiguity as far as possible.

In this research, we apply narrative paradigm theory (NPT), a communication theory that describes both a rational and interpretive approach to assess the strength of a communication interaction (Fisher, 1987). NPT is an exchange of information that is value-laden, but in a manner that is familiar and shared throughout the family firm. The content of stories is memorable, easy to understand and establishes a common ground with others, hence creating credibility. Stories also create a sense of empathy from a cognitive and emotional position to help understand the experiences and world views of others (Lämsä and Sintonen, 2006). According to the NPT, stories describe a form of symbolic action that gives meaning to those persons who create, recount and listen to the stories (Fisher, 1987). We propose that the assumptions of NPT match the challenges of communicating cultural family values between the family and the firm sphere. In this sense, we focus on stories as a strategic device to impart family values, coordinate group behaviour and shape a common understanding, or ‘creating a coherent shared experience and aligning employees with corporate values by highlighting social conventions and acceptable behaviours’ (Cunliffe and Coupland, 2012: 66). We acknowledge that stories might also be seen as a tool to transmit legitimacy, for example, to legitimize family internal succession (Dalpiaz et al., 2014). However, legitimization is not the core of our research question, and therefore, we exclusively focus on the strategic use of stories to impart cultural family values.

Stories describe an adequate instrument to impart cultural family values because they provide value-similar functions. According to Meyer (1995), ‘narratives serve to encapsulate and entrench the values that are key to an organisation’s culture’ (p. 210). Stories provide orientation, cause identity and emotionality, describe values implicitly, are situational and are repeatable (Boje and Durant, 2006; Gabriel, 1995). In an exploratory study, Parada and Viladás (2010) show that stories play a key role in transmitting values in family firms. Recently, Jaskiewicz et al. (2015) investigated 21 German wineries and illustrate that sharing stories across generations could positively influence the family firm’s level of entrepreneurship. Kammerlander et al. (2015) analyse the relationship between stories that are shared among family members across generations and the family firms’ innovations. While these studies focus on cultural family value transmission across generations, we focus on the transmission of cultural family values to the family firm sphere. Furthermore, Siehl and Martin (1982) show that cultural firm values and norms are learned rapidly through organizational stories. Additionally, Wilkins (1984) provides evidence that managers use stories to inform employees about their preferred organizational cultures.

But what makes a story effective? An effective story is distinguished by characteristics that ensure that the intended imparted value and the perceived value are congruent. Research has started to examine the effectiveness of stories (Taylor et al., 2002). Stories are especially effective if they fulfil different functions: identification, emotionality, situation dependency, repetition and collectivity (Boje and Durant, 2006; Brown et al., 2009). Additionally, it is important that stories impart values implicitly because otherwise these values may be rejected (Luhmann, 2012). Implicitness describes that a story needs to be able to communicate a value without explicitly mentioning it. Narrators do not explicitly say to their listeners, ‘and the moral of the story is …’ because the story’s larger meaning is given by the events described within the stories themselves (White, 1980). The interpretation depends on the listeners (Iser, 1972; Polletta and Lee, 2006). Hence, the value needs to be identified by the listener without having been named directly by the storyteller. According to Luhmann (2012), implicitly imparted values cannot be rejected because one cannot doubt what has not been made explicit. To ensure implicitness and to reduce rejection, narrative smoothing can be a useful means (Spence, 1986). By using narrative smoothing, the storyteller can omit, add and embellish details, which lead to a concentration on the main plot (Polkinghorne, 1995). While narrative smoothing can help improve implicitness, it may also increase ambiguity in terms of the value that is intended to be imparted by a story. Hence, it is questionable whether stories impart the intended values accurately. Literature on this problem is scarce and, in particular, with a focus on cultural family value transmission through storytelling in family firms, non-existent, although it may provide beneficial insights for family firms needing to impart cultural family values from generation to generation and to other stakeholders.

To increase our understanding of stories as a means to impart cultural family values in family firms, we analyse whether cultural family values that are intended to be imparted by a story and its teller are perceived accurately by listeners of the story. In this study, following the essence approach, where family ownership and family management as well as the resulting behaviour define a family firm (Chua et al., 1999), we define a family firm as

a business governed and/or managed with the intention to shape and pursue the vision of the business held by a dominant coalition controlled by members of the same family or a small number of families in a manner that is potentially sustainable across generations of the family or families. (p. 25)

To test our hypothesis, we applied a mixed-method approach including a qualitative phase and a quantitative phase. In the qualitative phase, we used qualitative case studies and identified six stories which are actually told in family firms by family and non-family members and have the potential to impart cultural family values. We then identified cultural family values which can be related to the benevolence scale, the tradition scale and the achievement scale of the Schwartz (1992) Value Scale. In the quantitative phase, we analysed empirically whether the cultural family values that are intended to be imparted by the stories are perceived accurately by individuals who are not related to the respective family firms. In all of the six stories, respondents perceived the central cultural family values that were assigned to a story accurately. However, in Firm 1, a second cultural family value was assigned to each story.

Our results indicate that stories are a powerful means to impart cultural family values in family firms. The qualitative phase of our study revealed that family members use stories as a strategic device to impart cultural family values to the family firm sphere and to non-family stakeholders within the firm. By using stories in which values are not explicitly addressed, stakeholders can learn central cultural values of the family and the firm. While theoretical propositions on the particular good fit of stories to impart values are manifold due to implicit transmission, little is known about the potential countervailing consequences of this implicitness, that is, the possibility that values embedded in stories are not perceived accurately. This threat is even greater if the storyteller and the receiver do not necessarily share a common understanding of values due to, for example, tradition or strong socialization.

However, our quantitative phase shows that, even without a common history, cultural family values have the potential to be perceived accurately through storytelling. Hence, we contribute to storytelling literature by showing that values intended to be imparted through stories are also accurately perceived by individuals unrelated to the storyteller. Furthermore, we contribute to research on values in family firms by showing that stories are a useful means to impart cultural family values from generation to generation and to other stakeholders. While recent research on family firms explores the use of stories to legitimize family internal succession (Dalpiaz et al., 2014), to explore entrepreneurial legacy of non-family stakeholders (Jaskiewicz et al., 2015) and as an effective means to trigger desired behaviour of succeeding generations (Brundin and Kjellander, 2010), our article adds to the discussion on storytelling in family firms. In this research, stories have been shown to be a strategic means to impart cultural family values to non-family stakeholders.

The article proceeds as follows: first, we present a brief review of literature with a focus on cultural values in family firms and value transmission through storytelling. Second, the characteristics and functions of stories enabling them to impart values are described. Third, we identify multiple stories and related cultural family values of three German family firms in the qualitative phase of our study (Phase 1). If the cultural family values imparted by the stories are also perceived accurately, this is then tested in the quantitative phase of our study (Phase 2). Following the results of our analysis, the study concludes with a discussion, limitations, avenues for future research and issues for management practice.

Value transmission through storytelling in family firms

Values in family firms

In family firms, cultural values, which are often closely related to the cultural family values, play an important role and describe an important aspect in distinguishing family firms from non-family firms. In family firms, cultural family firm values determine the long-term objectives and influence performance and strategy (Tàpies, 2008). Cultural family firm values are also central to successful leadership (Hall and Nordqvist, 2008) and are of high relevance for the succession process (Dunemann and Barret, 2004). Cultural family values describe a starting point for the development of cultural family firm values. Only if cultural family values become reflected in cultural family firm values can a firm be defined as family firm (Astrachan et al., 2002; Klein et al., 2005).

In general, values can be distinguished between individual and cultural values (Smith and Schwartz, 1997). In the context of family firms, we must carefully distinguish between these two forms. While the latter is shared among members of a cultural group, the first is rooted in an individual person. Hence, we are able to differentiate between cultural values of the family firm (i.e. consisting of the owning family and the non-family stakeholders, particularly, employees), cultural values of the owning family (i.e. consisting of the group of family members across tribes and generations) and individual values of the individual family members. In family firms, it is important that the owning family shares its values not only among its members but also with the firm and its stakeholders. The appropriate unit of analysis for assessing whether values are accurately transmitted is therefore the cultural level of family and family firm values. The identified cultural family values can be described as being socially imparted and shared within the family (Roth et al., 2009). They serve as guidelines for family members as they determine the development of the social identity of the family (Verplanken and Holland, 2002). Furthermore, the identified cultural family values affect the perception and behaviour of the family members (Meglino and Ravlin, 1998), are valid irrespective of object and situation (Hitlin and Piliavin, 2004) and remain stable over time (Klein, 1991). We are aware of the fact that not all families and family members are compelled to unambiguously share the same cultural family values. There are first attempts in the literature to shed light on the process of reaching a mutual understanding of values in owning families (Jaskiewicz et al., 2015). As this is not the aim of our article, we assume that the values embedded in the stories represent cultural family values. The concept of common familial socialization supports the idea that cultural family values are imparted among the family members because the values of the family members have been found not to differ significantly from each other (Klein, 2007). Additionally, potential successors experience an institutional socialization when entering the business (García-Álvarez et al., 2002).

Hence, the cultural values of a family can be described as the combination of individual values of the family members, in particular, individual values of the founder and the founding generation. The founder and family members also play a crucial role in determining the organizational culture and its values (Denison et al., 2004; Eddleston, 2008; Schein, 1983; Sharma, 2004). Specifically, family members who are actively involved in the family firm can serve as leaders who are observed by other family members and other stakeholders. As the tenures of founders, family members and managers have been found to be longer in family firms (Gallo, 2008), this continuity may enhance the importance of leaders in family firms imparting values. As long as family members are actively involved in the firm, the values of the family are preserved and can be passed on to employees.

Accordingly, in this study, we explicitly focus on the transmission of cultural family values to the family firm. We do not focus on how cultural family values are created through the combination of individual values of family members.

Applying storytelling to transmit values

The literature on storytelling is manifold and research has focused on different organizational topics such as change management (Boje, 1991; Kahan, 2006), communication (Finlay and Hogan, 1995; Jones and LeBaron, 2002; Stutts and Barker, 1999; Wylie, 1998), leadership (Driscoll and McKee, 2007; Grisham, 2006; Harris and Barnes, 2005) and organizational learning (Lämsä and Sintonen, 2006).

Stories are effective vehicles for conveying values (Hansen and Kahnweiler, 1993) ‘because they place them in a more grounded setting, providing main characters that either uphold or violate values so that people can see where and how values apply in daily life’ (Martin, 2015: 7). Furthermore, they impart values in a tractable and memorable way (Martin, 2015) and are an essential method to form an individual or a group identity (Boje and Durant, 2006). Every story is told from the perspective of the storyteller, and a sense of uniqueness emerges with every story. This uniqueness reinforces the separation from the outside and, thus, enhances the identification with the firm (Martin et al., 1983). The emotional quality of a story can be explained by distinguishing between ‘facts-as-information’ and ‘facts-as-experience’. While the storyteller is less interested in the informative content of the story, the emotional experience connected to the story is more important (Gabriel, 1995). When telling a story, the storyteller can communicate her or his emotions without having to mention the emotions explicitly, and the emotional interpretation is usually undertaken by the recipient (Boje and Durant, 2006). Consequently, a story has the ability to describe a situation properly. As a result, stories are connected to situations, and a story can arise out of every situation which clearly shows its accompanied values.

Moreover, stories about events and key people are a way of imparting values (Schein, 1983). Stories can be defined as ‘any explanation of past events that can be found to be shared’ (Feldman, 1990: 812). Events in a story make a normative point by projecting a desirable or undesirable future. Stories draw on events, and thus, they communicate the normative values that are associated with those events (Ochs and Capps, 2001). According to the NPT, stories describe a form of symbolic action that gives meaning to those persons who create, recount, and listen to the stories (Fisher, 1987). Stories are important because they can be used to impart values and they have the strength to collectivize, comment on, repeat, and become the subject of other forms of value communication (Dailey and Browning, 2014). Furthermore, stories may be a means to continue using role modelling, for instance, ‘I did not know my grandpa, but I hear he was an excellent engineer, and I want to be like him’, as a fictive example.

Research that explicitly focuses on value transmission through storytelling is limited. Siehl and Martin (1982) analysed sales trainees’ knowledge of four narratives and found that cultural firm values and norms can be learned through organizational stories. Additionally, Wilkins (1984) showed how managers use stories to inform employees about their preferred organizational cultures. He describes stories as maps that need to operate in two different ways. First, stories must symbolize the overarching purpose and philosophy in a way that inspires and teaches. Second, they must also provide enough of a suggestion about how participants should act so that they know what to do once they have been inspired. He concluded that ‘stories are uniquely qualified to perform both functions simultaneously’ (Wilkins, 1984: 45). Recently, Martin (2015) explored how stories varying in terms of the organizational level of main characters and the value-upholding or value-violating behaviours of those characters influence newcomers’ tendencies to engage in behaviours that uphold or deviate from the values. Results indicate that values are conveyed, but depending on the organizational level and behaviour of the main characters, employee behaviours vary. However, while stories are argued to be effective for communicating values and guiding behaviour, it is important that these values are perceived accurately.

How stories transmit values remains unclear in the narrative psychology as well as in organizational research (Weick, 1987). Furthermore, it is not clear what makes a story effective, that is, what are the characteristics of a story that ensure congruence between the intended imparted value and perceived value. Different functions of a story and structural characteristics of stories may increase their effectiveness.

Stories are also repeatable (Dailey and Browning, 2014). Repeating something is only possible if one can remember it. This, in turn, requires a narrative structuring or, in other words, a story. Therefore, stories can act as part of the firm’s memory when considering that the firm’s culture is an oral culture. A story needs to be known in a firm and told or heard by several people in order to be able to impart values. If a story is not collective, it cannot impart values because the story is not well known by different persons and, in turn, cannot be told. Most importantly, stories need to describe values implicitly (Luhmann, 2012). To fulfil the criteria of implicitness, a story needs to be able to communicate something without explicitly mentioning it. This can be realized by using the concept of narrative smoothing, whereby not all the details are told. Details can be omitted, added and embellished, leading to a concentration on the main plot (Polkinghorne, 1995), and the values need to be interpreted by the listener without being named directly by the storyteller.

While narrative smoothing may help to increase implicitness, it may also increase ambiguity regarding the perception of the intended imparted value. Hence, it is not clear whether listeners of a story perceive the value that is supposed to be implicitly imparted by the story. Failing to impart the intended value may have destructive consequences for firms as stakeholder behaviours may change due to misperception or misinterpretation of the perceived values. Effective stories have the potential to impart values, but, to our knowledge, empirical findings on the effectiveness of stories as a means to impart values are non-existent.

The use of stories in owning families across generations has been recently addressed by Kammerlander et al. (2015) and Jaskiewicz et al. (2015) in the context of innovation and entrepreneurship. Kammerlander et al. (2015) analyse the relationship between stories that are shared among family members across generations and the family firms’ innovations. Their results show that founder focus in stories is negatively and family focus is positively associated with innovation. Jaskiewicz et al. (2015) introduced entrepreneurial legacy, which they define as the family’s rhetorical reconstruction of past entrepreneurial achievements or resilience, and propose that sharing these legacies across generations positively influences the family firm’s level of entrepreneurship. Furthermore, Dalpiaz et al. (2014) explore how successors use family firm succession narratives to legitimate their succession. In an exploratory qualitative study, Parada and Viladás (2010) focus on stories in family firms. They conclude that narratives are powerful devices for transmitting values through generations. In the transgenerational context, stories are one of the most essential socialization mechanisms (Boyce, 1996; Miller, 1994). After the exit of a family member, succeeding family members and employees will still remember stories that describe how the predecessors would behave and make decisions, and thus, their values can become a reference remaining embedded in the organization (Ogbonna and Harris, 2001). Furthermore, stories may be even more important in family firms because verbal communication is often used in family firms (Lundberg, 1994).

However, these studies do not provide answers regarding the question of whether listeners also perceive the cultural family values that are intended to be imparted by a story and its teller accurately. Indeed, Parada and Viladás (2010) indicate that failure in value transmission needs to be considered in further studies. Specifically, in family firms, the accurate perception of cultural family values is important because the organizational culture of a family firm is often based on central cultural family values (Björnberg and Nicholson, 2012; Dyer, 2003). Hence, family firms describe a promising context to investigate the effectiveness of stories as a means to impart cultural family values.

Mixed-methods design

We applied a mixed-method design that included a qualitative phase (Phase 1) and a quantitative phase (Phase 2) to test whether cultural family values could be perceived accurately through storytelling. Most of the studies concerning cultural values in family firms are based on quantitative research (e.g. Dyer, 1986; Parada and Viladás, 2010; Payne et al., 2011). Nevertheless, this might lead to social desirability and self-serving-bias, which is especially critical when assessing cultural values in family firms. Contrastingly, using a qualitative method can lead to a lack of transparency and conformability (Dyer, 1988) and can hinder generalizability (Chenail, 2009). When aiming to describe a general valid mechanism of how cultural family values are imparted in family firms, besides applying qualitative research, quantitative research is necessary to test its universality. Therefore, a combination of qualitative and quantitative research methods was used, which can be best realized through a case study method (Keddle, 2006). In the qualitative phase, we analysed data from three German family firms from which we collected 14 qualitative interviews with family members as well as non-family employees of these companies. We then identified key cultural family values of each firm and six stories that embedded and illustrated these values. In the quantitative phase, we tested whether the cultural family values embedded in the stories are perceived accurately by 226 individuals unrelated to the family firms. In the following, we describe the two phases in more detail.

Phase 1: Identifying stories in family firms (qualitative part)

Case studies and methodical approach

We followed Pieper et al. (2015) to structure our methodology section in case selection, data selection, data analysis and attempt to enhance trustworthiness.

Case selection

The German business school, where our study was conducted, is one of the founding partners of the Successful Transgenerational Entrepreneurship Practices (STEP) project, which is a global applied research initiative that explores the entrepreneurial process within business families and generates solutions that have immediate application for family leaders (Babson, 2016). Based on this access to family firms, we were able to identify German family firms that comply with our family firm definition and asked for their participation. According to the essence of this approach, family ownership and family management as well as the resulting behaviour define a family firm (Chua et al., 1999). Hence, we used family management, family ownership, and transgenerational intention as criteria to identify family firms. Firms, therefore, in which the family has a significant influence as owner and at least one family member is still working in the company were selected. To consider the transgenerational intention, two generations had to be involved in the firm or the firm had to be managed by the second or later generations. After the identification of the participating family firms and their agreement to take part in our study, we asked the leading family member to provide at least three interview partners with a knowledge of the family firm’s history, role as employee and/or family member and contemporary understanding of the family firm processes as they most likely possess knowledge about stories told in the family firm. Regarding the number of cases, we followed Yin (2003), who recommends three cases for multiple-case study designs to predict similar results across different cases. As a firm’s culture is – apart from other influences – strongly affected by its size and the logic of its industrial sector (e.g. Chatman and Jehn, 1994), we selected three cases that operated in different industries, differed in terms of employee size ranging from about 100 to 40,000 employees and also the age of the firm. All interviewees at each company self-identified as a family firm (according to our definition) at the time of the initial interviews. Table 1 presents descriptive characteristics of each firm. Specifically, firm age, firm size, industrial sector, the number of interviews conducted with each firm, the number of interview partners per firm and their position in the family and in the firm are described.

Table 1.

Firm and interview partner description.

Cases	Interview partner	Position in the family	Position in the firm
Firm 1 (4 semi-structured interviews) 18 stories in total 2 stories tested Trading company (consumer goods) Firm size: < 1000 employees Firm age: 30 years	1.1	Father	Founder, chairman of the
		(1st generation)	supervisory board
	1.2	Son	Head of purchasing
	1.3	–	CEO
	1.4	–	Long-term employee
Firm 2(5 semi-structured interviews)28 stories in total2 stories testedLogistics service provider Firm size: < 40.000 employees Firm age: 50 years	2.1	Father	Chairman of the supervisory
		(2nd generation)	board
	2.2	Older son	CEO
	2.3	Younger son	Member of the supervisory board
	2.4	–	Former long-term employee
	2.5	–	CFO
Firm 3(5 semi-structured interviews)15 stories in total2 stories testedManufacturing industryFirm size: 100 employeesFirm age: 20 years	3.1	Father	Chairman of the supervisory
		(2nd generation)	board
	3.2	–	CEO
	3.3	–	COO (production)
	3.4	–	Head of research and development
	3.5	–	Long-term employee

CEO: chief executive officer; CFO: chief financial officer; COO: chief operating officer.

In total, we conducted three qualitative case studies. Due to confidentiality reasons, we made the cases anonymous. Specifically, we used a multiple-case design with embedded research units. A multiple-case design leads to a higher generalizability compared to a single-case design. The design of a case study can further be distinguished between a holistic and an embedded design (Yin, 2003). When assessing stories as a means to impart cultural values, the social context and the specific firm are of main interest. Thereby, the specific firm reflects the case and, together with the social context, constitutes the framework for understanding the stories, which are the units of investigation. Therefore, an embedded multiple-case design is most suitable for these investigations.

Firm 1 is a trading firm of consumer goods and follows a discount-oriented strategy. It has 20 branches and more than 1000 employees. The annual turnover is several hundred million euros. A typical customer of Firm 1 has a low to average income. At the beginning of 2000, the firm started to drive growth nationally and internationally but was traditionally focused locally. The product range focuses on product segments. The market environment is characterized by predatory competition as demand is declining while distribution space is continuously increasing. Firm 1 describes itself on the company’s website as a firm with a ‘family character’. The founder of Firm 1 is chairman of the supervisory board. His son is head of purchasing and assistant to the CEO. The family is considering how they can transfer the shares of the founder to a foundation model while at the same time keeping the family influence on the firm. The firm is about 30 years old.

Firm 2 is a group of companies which achieved an annual turnover of high single-digit billions in 2008. It operates as a logistics service provider with more than 40,000 employees at 800 locations in more than 500 operative organizations worldwide. This global player defines itself on the company’s website as a family firm. The chairman of the supervisory board and two members of the board of management are family members. The family holds all shares.

Firm 3 is a specialized firm with business segments in different manufacturing industries. Its products are produced in Germany and distributed worldwide. Firm 3 has about 100 employees and an annual turnover in the lower two-digit million range. The success of Firm 3 is based on its technological production expertise resulting in worldwide technological leadership in its market. The family held 90 percent of the shares. The patriarch of the family is the chairman of the supervisory board. Currently, a non-family member manages Firm 3, but the son of the patriarch may join the company in the future. However, the future of Firm 3 in terms of management and ownership is not yet resolved.

In particular, attention was given to the planning of the case study as this method is often described as being not systemized enough (Gray, 2009). In the first step, the hypothesis was developed that family firms use stories to impart cultural family values which guided the collection of the data. After screening the material, a first draft of the cases was created. The process of the case study work was iterative, which led to several learning loops between the data collected and the draft of the cases. This means that new findings can be integrated into the research design at an early stage (Yin, 2003). Subsequently, the case studies were fully developed compared with each other and adjusted in accordance with the hypothesis.

Data collection

The data for this research were collected through interviews during a large research project focusing on the longevity of family firms. The interviewees were not specifically made aware of the fact that the aim and interest of the study lay in the collection and analysis of narratives. Each interview began by asking the interviewee to describe the history of the family firm with a focus on the role and involvement of the family members. According to Schein (1999), this information is important. Because the analysis of narratives requires a rich understanding of the context in which narratives are produced (Hardy et al., 2000), we sought to develop a thorough understanding of the family firms. To obtain a complete picture of the use of stories in each firm, we interviewed family members (at least two if more than one generation was actively involved in the firm), non-family executives and employees on lower hierarchical levels. Each interview was conducted by one of the authors together with another researcher. All interviews were conducted at the family firm locations in the interviewee’s office. Insights gained from the interviews were discussed with another author. Two more authors who were not involved in the data collection process then joined the discussion and analysis.

Data analysis

We adopted a functional approach to narrative analysis (Bruner, 1990), which is concerned with uncovering the meanings of particular stories rather than their grammar or their relation to the broader sociocultural context. Using paragraphs and sentences as coding units, we performed a thematic analysis of the text. Thematic analysis entails searching for themes that meaningfully describe the essence of the narrative (Riessman, 1993). We proceeded with thematic analysis in two stages. First, we read the data and developed inductive codes that captured the storylines that the interviewees used to construct actions and the family firm’s history. These codes, which we call first-order themes, are grounded in our data. There were two coding schemes; an initial set of codes was created by the interviewer and another set was created by one of the authors who was neither involved in the interview process nor had knowledge of the interviewer’s coding scheme. Codes were compared using an iterative process that merged similar codes with each other and identified emerging categories that grouped together several codes (Glaser, 2011). Second, we developed more abstract codes by aggregating first-order themes characterized by related storylines into higher order themes (Clark et al., 2010; Corley and Gioia, 2004). We refer to these second-order themes as narrative tactics as they represent a generic storyline chosen by the interviewees in order to describe a given aspect of the story.

Story selection

We applied three steps to identify stories. First, each author independently read the interviews and identified narratives using so-called ‘narrative markers’ (Burck, 2005) or ‘preambles to stories’ (Sacks, 2000) which serve to initiate a narrative (e.g. ‘for example, once there came …’ and ‘Mr x has no doubt told you about that already’). In a second step, we shared the identified stories and discussed whether these could be seen as a tool to transmit cultural family values. To find out which cultural family value was transmitted, we needed to rely on an interpretative approach. This is inevitable as stories are rarely introduced with the words like ‘I told this story to hint at value x’. Having contemplated the cultural family values possibly transmitted with the story, in a third step, we reread the whole interview in the light of finding hints on the importance of these values. For all cases, the interview guidelines allowed sufficient time for talking about the founding of the family firm, historical data, traditions, succession, historical and family contexts as well as the value system of the owning family. Interviewees were also asked to describe their core values, the development of these and how these affect the family firm. Furthermore, the interviewees were asked to describe how cultural family values are transferred to the family firm. Specifically, the question was asked if there were stories that supported these cultural family values.

The stories were taken from 14 semi-structured interviews with family members, managers or long-term employees of the three family firms. In total, we identified 61 stories that were used in the three family firms. These stories were not restricted to the family and its members but shared by the family members within the family firm. To test for the effectiveness of a story, we analysed each story regarding its functions and characteristics. First, we tested whether the stories were told to impart cultural family values. Second, we tested for collectivity, which was proven when several individuals in the firm were aware of the story and could tell the story in a similar way. Third, we tested for emotionality by observing the way the story was told by the storyteller. The interviews were conducted by two interviewers. After the identification of a story, each interviewer reviewed how emotionally he perceived the telling of the story. A story was chosen only if, independently of each other and consistently, both interviewers did indicate a high emotionality in gesture, facial expression and/or tone of the interviewees. Additionally, the stories were read and analysed by the two authors who did not conduct the interviews with regard to the stories’ potential to trigger emotions. Specifically, it was checked whether the story was told from a personal perspective, because stories that are told in the first person support the build-up of emotionality. Fourth, stories had to describe a situation or event involving family members or leaders. Most importantly, we ensured that the intended imparted cultural family values were not explicitly named in the story. Furthermore, it was important that outsiders could follow the story with regard to its content. All stories are presented in Appendix 1.

Firm 1

In the first story of Firm 1 (‘One of you’), the founder and chairman of the supervisory board (1.1) explains the way he wants to be treated in the company. He wants the same treatment as any other employee and not be treated favourably because of his role as owner. We identified and assigned ‘justice’ as the central value to the story.

The second story of Firm 1 (‘We are family’) was also told by the founder (1.1). It is about the performance of employees in the company compared to the performance of family members in his family. Although he feels responsible for weak members of the family, he cannot accept weak performances of employees in the company because the company would not be able to compete in the market in this case. We identified and assigned ‘performance orientation’ as the central value to the story.

Considering other parts of the interviews, justice, modesty, and equality describe important values in Firm 1. For example, the founder always used a parking lot in the back and wore the same work clothes as all other employees. The founder further underlines this by saying,

The company is a task and not a property. For me, this is the essential; this basic attitude towards the company. This is of utmost importance for me. All other things can be derived from this. First, I have a task, I have to be a role model, I cannot expect things from my employees that I don’t do myself, and, inevitably, I will observe the same behaviour from my employees as my own behaviour.

Additionally, performance orientation is highlighted in other parts of the interviews. For example, employees have a high degree of managerial discretion in order to achieve high performance.

Firm 2

Two stories told in Firm 2 fulfilled the collectivity criteria. In the first story of Firm 2 (‘Going east’), a family member, who is a member of the supervisory board and the CEO’s brother (2.3), narrates that the company was so successful in East Germany because he and his brother were willing to accept the sleeping conditions that CEOs of larger firms would probably not have contemplated. We identified and assigned ‘commitment’ as the central value to the story.

The second story of Firm 2 (‘The bribe affair’) was told by the CEO of the firm (2.2). It is about him being pressured into buying a car in order to improve the business relationship between his firm and a large customer. When he refused to buy the car, the customer ended the business relationship. We identified and assigned ‘honesty/truthfulness’ as central values to the story.

Commitment, self-confidence and honesty/truthfulness are also mentioned as central and important values in other parts of the interviews. For example, at the time of the internationalization of Firm 2, the family members were required to learn other languages after work and had to spend considerable time away from their families abroad. In many parts of the interviews, corruption and personal gains of employees were criticized, which highlights the importance of truthfulness/honesty as central values of Firm 2.

Firm 3

Firm 3 narrated two stories that showed collectivity. In the first story of Firm 3 (‘Back and forth’), a family member, who is chairman of the supervisory board (3.1), narrates a story about the incorrect and unprofessional behaviour of his firm’s CEO based on differing opinions in an investment decision which was witnessed by other employees. We identified and assigned ‘professionalism’ as the central value to the story.

The second story of Firm 3 (‘Silo of truth’) was told by the chairman of the supervisory board (3.1). He talks about an employee who made a mistake during the filling process. Because he told his supervisor about the mistake, the company was able to learn from it and actually improve the process. In the end the employee was rewarded for his actions. We identified and assigned ‘honesty/truthfulness’ as central values to the story because these values were rewarded by the family.

In other parts of the interviews of Firm 3, professionalism, enthusiasm for technology and honesty/truthfulness are described as the most important and central values of Firm 3. For example, in other parts of the interviews, the enthusiasm for technology is strongly related to the current chairman of the supervisory board and his father, the founder of Firm 3. This enthusiasm for technology has influenced the entire company and its employees to this day.

Table 2 gives an overview of all stories, the assigned values and the narrator of each story.

Table 2.

Stories and cultural family values.

Case	Stories	Central values	Narrator	Position in the firm
Firm 1	One of you	Justice (benevolence)	1.1 (Founder)	Chairman of the supervisory board
	We are family	Performance orientation (achievement)	1.1 (Founder)	Chairman of the supervisory board
Firm 2	Going east	Commitment (tradition)	2.3 (Younger son, third generation)	Member of the supervisory board
	The bribe affair	Honesty/truthfulness (benevolence)	2.2 (Older son, third generation)	CEO
Firm 3	Back and forth	Professionalism (achievement)	3.1 (Father, second generation)	Chairman of the supervisory board
	Silo of truth	Honesty/truthfulness (benevolence)	3.1 (Father, second generation)	Chairman of the supervisory board

CEO: chief executive officer.

Values in parentheses present values according to Schwartz (1992).

All stories were chosen as they fulfilled the functions and characteristics of an effective story (i.e. identification, emotionality, situation dependency, collectivity, repetition, and implicitness). As all stories were told in German, we followed a standard approach from the psychology literature to translate the stories from German to English (Brislin, 1986). In the first step, three independent researchers translated the stories from German to English and then reached agreement on a common version. The shared form was then back-translated by a bilingual person with extensive knowledge of family firm research. This was then discussed by the authors who provided suggestions for refinements in wording to make the English version as close to the original version as possible. The refined English version was again back-translated by another bilingual expert and checked by the authors who considered it to be virtually identical to the original one.

Efforts to enhance trustworthiness

To increase the trustworthiness of our study, we aimed to enhance credibility (i.e. confidence in the ‘truth’ of the findings), transferability (i.e. showing that the findings have applicability in other contexts), dependability (i.e. showing that the findings are consistent and could be repeated) and confirmability (i.e. a degree of neutrality or the extent to which the findings of a study are shaped by the respondents and not researcher bias, motivation or interest) of our results (Krefting, 1991; Lincoln and Guba, 1985; Wallendorf and Belk, 1989).

In terms of credibility and transferability, during the data collection, we solely selected cases that were based on our definition of a family firm to enhance the understanding of the transmission of cultural family values through storytelling. Interviewees were selected based on their knowledge of the family firm’s history, their role as employee and/or family member and contemporary understanding of the family firm processes. Accordingly, some family firms had more interviewees than others. Respondents were remarkably frank in their comments about their company, its executives and its family members. Hence, we believe that our findings reflect the ‘truth’ in terms of stories and cultural family values for family firms according to our definition.

In terms of dependability and confirmability, during the data analysis, having two authors not involved in the research design, interviews or the initial coding increased neutrality because outsiders drawn into a research project can provide an additional and more objective review of the research process and previous coding. However, all authors intensively discussed conceptual issues in order to achieve a sound theoretical contribution.

Phase 2: Value perception of family firm stories (quantitative part)

In the quantitative part of our study, we tested whether listeners accurately perceived the central cultural family value of each story. In doing so, we were able to test whether effective stories are an appropriate means to impart values.

Previous research has identified characteristics and functions that a story needs to impart values accurately. Whether the values are actually perceived accurately by individuals has not been tested empirically yet. In particular, for family firms, it is important to impart values from generation to generation and within the family firm as values are important for the long-term development of the firm.

In order to avoid bias, we used individuals as listeners who were unrelated to the work place of the three family firms. Employees may otherwise have knowledge about the related values intended to be imparted.

Supported by the alumnus network of the family firm institute of the German business school, where Phase 1 was also conducted, we were able to send an online questionnaire to 850 alumni, who had indicated an interest in taking part in future studies conducted by this business school in their application for alumni membership. In total, we received 226 completed responses resulting in a usable response rate of 26.59 percent. The mean respondent age was 35 years. In all, 65 percent of the respondents were male. Although responses were somewhat skewed towards male participants, this proportion of males is somewhat reflective of the industries of the analysed family firms. Most of the respondents (67%) had a bachelor’s degree, while 12 percent had a doctoral degree. We assessed which values the participants attributed to the stories. It was necessary to shorten the stories to make them easier for the survey participants to read. Therefore, we used narrative smoothing (Polkinghorne, 1995). All stories are presented in Appendix 1.

The respondents were asked to read each story and specify whether the behaviour of the main character of the story was an example of egotism/egocentrism, profit orientation, professionalism, justice, modesty, honesty/truthfulness, forbearance, tolerance, performance orientation, commitment, self-confidence and enthusiasm for technology. These choices included five additional values to the seven central values that we identified during the interviews. In addition to the values that were identified, respondents could also specify other values to the stories. By giving the respondents this opportunity, we tried not to influence their choice by solely specifying our identified values. Each value was defined in advance so that respondents had the same understanding of each value. For each story, multiple answers were possible. Because of the nature of the generated data, we used the McNemar (1947) test. This test can be applied when data are nominal to test for differences between two related dichotomous variables (Field, 2013). Before conducting the McNemar test to show differences between the most frequently chosen value and the second (and third) most frequently chosen value, we applied Cochran’s Q test, which is an extension of McNemar’s test and, basically, a Friedman’s analysis of variance (ANOVA) for dichotomous data (Field, 2013) to show whether the different values of a story are significantly different. We coded responses as 0 if the value was not assigned and 1 if the value was assigned.

Table 3 reports the number of responses for each value and story. Throughout all stories, professionalism (N = 618) and honesty/truthfulness (N = 578) were most often assigned to the stories. While honesty/truthfulness is a value that has often been associated with family firms (Deephouse and Jaskiewicz, 2013), the literature has identified a lack of professionalism in family firms (Stewart and Hitt, 2012), which contradicts the perception of the respondents.

Table 3.

Values assigned to stories.

Case	Stories	Egoism (hedonism)	Profit orientation (achievement)	Professionalism (achievement)	Justice (benevolence)	Modesty (security)	Honesty/trustfulness (benevolence)	Forbearance/tolerance (universalism)	Performance orientation (achievement)	Commitment (tradition)	Self-confidence (self-direction)	N
Firm 1	One of you	0	12	130	141	70	101	0	13	13	14	494
	We are family	31	147	67	0	0	64	0	148	0	0	457
Firm 2	Going east	22	36	39	0	74	17	33	58	186	39	504
	The bribe affair	16	0	96	60	0	161	0	0	15	67	415
Firm 3	Back and forth	13	0	155	14	0	63	32	26	44	92	439
	Silo of truth	0	0	131	28	0	172	20	39	41	56	487
	Sum of answers	82	195	618	243	144	578	85	284	299	268	2796

Values in parentheses present values according to Schwartz (1992).

Cochran’s Q test showed significant heterogeneity for the distribution of all values assigned to each story. Comparing the most frequently assigned values to the second (third) most frequently assigned values by using McNemar’s test, results reveal that, except for the values assigned to Firm 1’s stories, one central value is assigned to each story by the respondents. Table 4 presents the statistical results.

Table 4.

Cochran’s Q and McNemar’s test.

Case	Stories	Cochran’s Q test		McNemar’s test (most frequent vs second most frequent value)		McNemar’s test (second most frequent vs third most frequent value)
Firm 1	One of you	Justice (benevolence)	.00*	Professionalism	.50	Honesty/truthfulness	.00*
	We are family	Performance orientation (Achievement)	.00*	Profit orientation	1.00	Professionalism	.00*
Firm 2	Going east	Commitment (tradition)	.00*	Modesty	.00*	Performance orientation	.00*
	The bribe affair	Honesty/truthfulness (Benevolence)	.00*	Professionalism	.00*	Self-confidence	.00*
Firm 3	Back and forth	Professionalism (achievement)	.00*	Self-confidence	.00*	Honesty/truthfulness	.00*
	Silo of truth	Honesty/truthfulness (Benevolence)	.00*	Professionalism	.00*	Self-confidence	.00*

Values in parentheses present values according to Schwartz (1992).

p < .01.

For Firm 1, results show that stories can impart more than one central value. The story ‘One of you’ was assigned the values of justice and professionalism. Based on the interviews, we assigned justice as the central value to the story. The respondents also assigned justice to this story but not as the only central value; professionalism was also associated with this story. The second story told in Firm 1 (‘We are family’) was assigned performance orientation and profit orientation. While we assigned only performance orientation to this story, based on the interviews with Firm 1, respondents also assigned profit orientation.

The first story narrated in Firm 2 (‘Going east’) was most frequently associated with commitment, which is in line with our assignation. Honesty/trustfulness was associated with story 2 of Firm 2 (‘The bribe affair’). These values were also assigned as central values, based on the interviews, to story 2 of Firm 2.

The two stories told by Firm 3 were also assigned to one central value – story 1 of Firm 3 (‘Back and forth’) to professionalism and story 2 (‘Silo of truth’) to honesty/truthfulness. These are in line with our value assignation.

Discussion

Cultural family values and their overlap with cultural family firm values have been found to be one of the sources of a family firms’ defining characteristics (Astrachan et al., 2002; Klein et al., 2005), and the existence of values is crucial for successful performance in terms of revenues, reputation, shared identity and continuity of the family business history (Parada and Viladás, 2010). We identified values such as modesty, equality, honesty, truthfulness and commitment, which are often associated with family firms. For example, in a study by Koiranen (2002), honesty and commitment were ranked highest by Finish family firms. That these values are associated with family firms can also be seen by the good reputations of family firms (Deephouse and Jaskiewicz, 2013). Furthermore, these values are also in line with an altruistic behaviour, which has been associated with family firms (Schulze et al., 2002, 2003).

Our results indicate that stories are an effective means of communicating and imparting cultural family values. Values that were intended to be imparted by effective stories were perceived accurately by individuals who were actually not related to the family firms in which the stories were told. Effective stories fulfil specific criteria. Specifically, stories impart values implicitly. If static rules no longer have an effect, stories and their related values may provide the only orientation. They help to reduce complexity and uncertainty by advising what is ‘right’ and what is ‘wrong’. This mostly influences the information processing and the behaviour of family members and employees. By indicating what is important and what is unimportant, the imparted values of each story have an implicit prioritizing function. Moreover, they give moral direction and provoke acceptance or denial. These orientation functions induce that some basic convictions of the firm’s members become more likely and are repeated. This repetition evokes emotions connected to these values. Furthermore, a story’s orientation function increases if the presented behaviour in a story is familiar. The emotionality fosters the basic assumptions and enhances the effect of the values. Besides having an orientation function, the stories and the related values have an identification function for the family members and other stakeholders. Only individuals that conform to the values are able to belong to the firm in the long run. Despite the ongoing change of a firm, it can keep its identity and continuity through the underlying cultural values that are imparted by the stories. The identification with the practicable values implies that the members of a firm are strongly emotionally connected with them. Furthermore, effective stories show collectivity. If these criteria are fulfilled, even individuals, who are not related to the specific family firm in which the story is told, perceive the intended imparted value of a story accurately. Hence, our results contribute to research on values in family firms by showing that stories are an important means to impart cultural family values.

Furthermore, our results reveal that more than one central value can be assigned to a story. Respondents perceived and assigned two central values to both stories told in Firm 1. This ambiguity describes a weakness of storytelling because values may be perceived wrongly. In particular, in family firms, ambiguity may be higher because cultural family values and family firm values overlap (Astrachan et al., 2002; Klein et al., 2005). Hence, family firms need to make sure that the cultural family values that are intended to be imparted are perceived accurately. Otherwise, the likelihood that the value intended to be imparted and the perceived value are not congruent will increase.

Recent research describes family firms applying narratives to legitimize an institutional order, for example, family internal succession (Dalpiaz et al., 2014) or entrepreneurial legacy (Jaskiewicz et al., 2015) to non-family individuals (i.e. family external legitimizing). Other studies by Kammerlander et al. (2015) on innovation or by Brundin and Kjellander (2010) on strategy formulation exemplify that stories could be effective as a device to trigger desired behaviour of the succeeding family internal generation (i.e. family internal learning and influencing). Our article adds an additional facet to the increasing discussion on storytelling in family firms, that is, the use of stories as a strategic means to impart values to non-family stakeholders (i.e. family external influencing).

While theoretical propositions on the particular good fit of stories to impart cultural values (because values can be transmitted implicitly) are manifold (e.g. Harris and Barnes, 2005; Kahan, 2006), we know little about the potential countervailing consequences of this implicitness. That is, the possibility that cultural values embedded in stories are not perceived accurately. This ‘peril’ is even greater if storyteller and receiver do not necessarily share a common understanding of values due to, for example, tradition or strong socialization. Despite this danger, our article shows that, even without a common history, value stories have the potential to be perceived accurately.

Furthermore, we contribute to literature that focuses on stories as a meaningful device to impart cultural values across organizational borders. For example, a recent study by Martin (2015) presents and tests a framework for understanding how narratives embedded values in organizational newcomers’ actions. Our article adds to this organization internal view by showing that stories are used across different spheres like, in our case, family and firm sphere.

Limitations and future research

Our study has some limitations that offer avenues for future research. First, the main limitation of our study stems from its exploratory nature. Because our objective was to gain theoretical clarifications as to whether family firms use stories to impart cultural family values and whether these embedded in stories are perceived accurately, our findings should not be generalized to just any populations of companies. Future research is needed to identify differences based on organizational characteristics. For example, it would be interesting to investigate whether the effectiveness of value transmission through storytelling is affected by the firm size, that is, whether stories are as efficient a device for imparting cultural family values in small and medium-sized firms as well as in large firms. There might be a difference due to the number of recipients and their diversity. While our study focuses on stories in family firms, it would be of interest to test if the effectiveness of stories regarding the transmission of cultural values differs between family firms and non-family firms. This might be the case because family firms are more long-term oriented, and thus, stakeholders have more time to learn from stories and align their behaviour accordingly. In contrast, turnover in the top management teams of non-family firms might be higher and, thus, the value base and conception might change more often and more radically.

Second, research suggests that stories can only be interpreted accurately in a specific context (Boje and Durant, 2006). We abstracted the stories from their context by analysing the value perception of individuals that are not associated with the family firms in which the stories were told. Future research is encouraged to test how cultural values are perceived by the stakeholders of a firm in a specific context. Crossan et al. (1999) state that organizational learning (i.e. intuiting, interpreting, integrating, and institutionalizing) occurs over three levels: individual, group, and organization. We have only applied an individual-level perspective. Additionally, depending on different cognitive maps of individuals, the interpretation of stimuli varies. Hence, future research is encouraged to extend our study to the group level and the organizational level and to consider different cognitive maps on the individual level.

Third, unfortunately, we could not unambiguously identify the values as cultural family values because the values that we identified are described by individual family members. Although family firms are characterized by family members sharing family values (Astrachan et al., 2002), due to our research design, we could not be sure that the reported individual values of the family member are in fact agreed upon and coherently shared on the family level (i.e. constitute cultural family values). However, we assume that individual values of family members are closely related to cultural family values. Future research is encouraged to measure cultural family values on the family level. Furthermore, it would be interesting to analyse how values of individual family members are transformed into cultural family values.

Issues for management practice

Based on the qualitative phase of our research, our study shows that multifaceted stories are strategically used by members of the owning family to transmit cultural family values to non-family stakeholders. We have found that these stories are indeed shared in family firms and can be seen as meeting the requirement of collectivity. These stories are emotionally laden and focus on actions in which family members are involved. This indicates that owning families use stories to pursue their objectives and show a high degree of professionalism when using stories. While our research question does not aim at answering the question if the objectives of storytelling are met, we can carefully deduce – because every owning family we interviewed uses value stories strategically and professionally – that stories are indeed an effective device used to impart cultural family values.

Based on the quantitative phase of our research, we are able to further strengthen the statement that stories are told professionally. This is due to the fact that we have found that non-family stakeholders – and in our case even total strangers to the family firm – unequivocally and accurately identified the cultural family values embedded in the narrated story.

Hence, stories are an effective device used by the members of the owning family to impart cultural family values in the family firm. While explicit measures such as guidelines, training, or events are important parts of value transmission, stories have two fundamental advantages: first, they are less expensive compared to more formal measures and, second, they bear higher potential to trigger credibility. Formal measures could be regarded by the receiver as a strategic device and could therefore be perceived as ‘manipulating’. Stories, in contrast, although used strategically, do not trigger this sense of manipulation due to their authenticity. Members of the owning family are therefore advised to reflect on situations from the past, which might bear the potential to be told in stories and, consequentially, use them as a strategic device to transmit their cultural family values.

On the other hand, there is a danger that the owning family’s actions, which do not coincide with the cultural family firm values, find their way into stories told among non-family stakeholders within the family firm. These stories, if told effectively, could be very harmful and work against a coherent understanding of cultural values. Therefore, every member of the owning family should be aware of his or her behaviour in the family firm and public. In addition to the risk that undesirable owner family behaviour will be reflected in stories told in the family firm, there is another possible risk of storytelling, that is, the danger of deliberately using stories manipulatively. While the former is a risk the owning family is confronted with, the latter concerns, for example, non-family employees. The question of manipulation by storytelling has become a growing issue (e.g. Auvinen et al., 2013), especially when it comes to the point where not only existing stories of what really happened are told, but rather new stories are made up to convey meanings that are desirable to the owners of a family firm. Besides conveying desired (but false) information, storytelling can also be a way to forget what is not convenient to recall or to embellish historical accounts (Gabriel, 2008).

It is noteworthy that the manipulative use of storytelling also involves a risk for the owning family themselves. When the family is accused of lying or stretching the truth, their reputation of trustworthiness could be spoiled (Bass, 1998). Since trust is a crucial element of family firms to enhance stakeholder engagement (Hauswald and Hack, 2013), owning families should never engage in manipulative storytelling, even though information in stories is implicit making them therefore virtually impossible to prove.

Conclusion

This study analyses stories as a means to impart cultural family values in family firms. Using a mixed-methods approach, qualitative results indicate that owning families use stories to impart cultural family values. Additionally, quantitative results show that the intended imparted central cultural family values of the investigated stories were perceived accurately by individuals unconnected to the family firms. Hence, storytelling is a powerful tool used in family firms to impart cultural family values to family members and other stakeholders.

Footnotes

Appendix 1 Acknowledgements

The authors would like to thank Valerie Riedo for supporting the authors in preparing the manuscript. The authors would also like to thank Markus Plate for his effort during the qualitative data collection. Finally, the authors would like to thank Tania Hanson-Fendel for language editing our manuscript.

Funding

The author(s) received no financial support for the research, authorship and/or publication of this article.

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