The effect of emotional value on the value of family business

Author(s):	Keywords:
Kanita Isaković, Suvad Isaković, Ajdin Isaković (B&H)	family business, emotional value, evaluation of the company

Abstract:
Family businesses are becoming more and more popular topic to investigate because of the rising awareness regarding their importance for the economy. Characterized by the deep involvement of family members in the equity and decision-making processes through the managerial positions they usually have, the evaluation of family businesses requires a slightly different approach than the evaluation of other organizational structures. Thus, this paper deals with the specific evaluation of family businesses from the owners’ perspective which tends to see their companies differently from others. The authors tried to find out whether there is a systematic relationship between the owner’s emotional investment and the total value of family businesses. The research used qualitative primary and secondary data in a thorough analysis from different standpoints (sociological, psychological, financial) based on which the authors recognized several differences regarding the evaluation of the family enterprise from the owner’s perspective and the total value of that enterprise. A case study was used in order to collect the data along with an unstructured interview with the owner of a family business operating in Bosnia and Herzegovina so as to get a more accurate view of the topic and to calculate the emotional value of the business. Results of the conducted study supported the hypothesis of this research, i.e. confirmed that the emotional value positively influences the total value of the family business. However, they did not support the hypothesis which states that the total value of the family business equals the selling price the owner is willing to accept.

Abstract:

Family businesses are becoming more and more popular topic to investigate because of the rising awareness regarding their importance for the economy. Characterized by the deep involvement of family members in the equity and decision-making processes through the managerial positions they usually have, the evaluation of family businesses requires a slightly different approach than the evaluation of other organizational structures. Thus, this paper deals with the specific evaluation of family businesses from the owners’ perspective which tends to see their companies differently from others. The authors tried to find out whether there is a systematic relationship between the owner’s emotional investment and the total value of family businesses. The research used qualitative primary and secondary data in a thorough analysis from different standpoints (sociological, psychological, financial) based on which the authors recognized several differences regarding the evaluation of the family enterprise from the owner’s perspective and the total value of that enterprise. A case study was used in order to collect the data along with an unstructured interview with the owner of a family business operating in Bosnia and Herzegovina so as to get a more accurate view of the topic and to calculate the emotional value of the business. Results of the conducted study supported the hypothesis of this research, i.e. confirmed that the emotional value positively influences the total value of the family business. However, they did not support the hypothesis which states that the total value of the family business equals the selling price the owner is willing to accept.

Cite as:
Isaković K, Isaković S andIsaković A. (2021) The effect of emotional value on the value of family business. Quality 2021 (S.Brdarević, S. Jašarević, editors)”, ISSN 1512-9268, Neum, B&H, 17-19 June 2021., pp. 257-265

041-Q21-130

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