Evaluation of decision making in family business mixing data based and socioemotional wealth considerations

Abstract

Rational use of the information available to companies is one of the strategic concerns for both family businesses and non-family businesses. The aim is to make the best use of the information resulting from data analysis in order to gain strategic advantage and to be more competitive as a company in all its functional areas. Experience indicates that emotions play an important role, especially in family businesses. Many maturation models exist to analyze decision-making processes (DMPs), but none from the perspective of family business cognition. The authors start from their own “Circumplex Hierarchical Representation of Organisation Maturity Assessment” (CHROMA) model (Parra, Tort-Martorell, Ruiz-Viñals, & Alvarez-Gomez, 2017), which was created to support decision processes in family businesses. This model was proven successful in the analysis of DMPs in large family businesses. The model was simplified as CHROMA-SHADE (Parra, Tort-Martorell, Ruiz-Viñals, & Alvarez-Gomez, 2019), more adequate for the analysis of small and medium-sized family businesses. Despite being a good DMP analysis instrument, intangible aspects such as family values and emotions have not yet been included. Both entrepreneurial emotions and entrepreneurial cognition must be taken into account when analyzing the DMP of the family business. In this chapter, the authors wish to explore attributes that can be introduced into a new dimension in the CHROMA model in order to make it more specific in the analysis of DMPs of family businesses regardless of size. The resulting FAMILY-CHROMA model represents a specific maturation model to evaluate DMPs based on the use of business information of family businesses.