Businesses during economic instability: Moderating roles of emotional intelligence and social capital

Although an overwhelming body of literature refers solely to the challenges of family businesses, there is little empirical work to evaluate many obvious issues by comparing family-owned with non-family-owned businesses. Most of the literature on family businesses is based on research in Western or Chinese societies, and our understanding of family-operated firms in other cultures, particularly Middle Eastern cultures, is limited. Thus, our paper attempts to bridge the gap by comparing a sample of businesses in which two or more family members participate with a sample of businesses in which there is no family-member participation. This study investigates two important issues: whether there are significant differences in fear of failure and psychological well-being between family and non-family businesses, and whether emotional intelligence and social capital moderate the relationship between fear of failure and psychological well-being in both groups. The proposed model was tested on data from 110 family-owned and 98 non-family-owned small enterprises in three major cities in Iran (Tehran, Isfahan, and Tabriz). The results of multiple regression analysis indicate that fear of failure is negatively associated with job satisfaction and positively related to perceived work stress; we further find that emotional intelligence weakens the association of fear of failure with psychological well-being in both study groups, especially in the family-owned business group. Contrary to our expectations, we find a weaker moderating effect of social capital on the link between fear of failure and psychological well-being among family owners. Implications of these findings for research and practice are discussed.