Moral Emotions in Family Businesses: Exploring Vicarious Guilt of the Next Generation

In this article, we explore intergenerational moral emotions as a psychological root of ethical management practices. We develop a conceptual model of next-generation guilt in family business by building on family systems and identification theories. We test it with a scenario approach depicting an ethical dilemma. Our findings suggest that the less identified the next generation is with the family, the more likely vicarious guilt emerges. Guilt then leads to intentions of more responsible behaviors, such as reparative actions, apologies, and change in business practices. The implications encourage future research on family business guilt and moral decisions across generations.