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In the world of social entrepreneurship, the line between work and family often blurs. Many social enterprises count actual family members among their staff or leadership, and many others pride themselves on their close-knit, family-like cultures. But could this family-like culture cause harm to the social enterprise and/or to its leaders and employees? A research article I co-authored, involving an ecological social enterprise in Malaysia, suggests the answer may be “yes.” 

In the article below, I draw on this research to unpack the nuances of family-like cultures in social enterprises, exploring their potential benefits and costs, and presenting strategies to harness their advantages while minimizing their downsides.

What is a family-like culture in social enterprise?

A family-like culture is an organizational culture that resembles a family, involving strong emotional bonds, a sense of belonging, shared values, and norms of mutual care and support. It is a culture in which interpersonal dynamics mirror those found in a family, such as close relationships, loyalty and interdependence.

There are at least three different, and not mutually exclusive, pathways for a family-like culture to emerge in social enterprises. In our study, this type of culture emerged as a way of coping with the intense challenges of pursuing both social impact and financial sustainability, while dealing with limited legitimacy and resources. Amidst the inherent tensions of pursuing a social mission with commercial means, teams naturally pull together into a tight, mutually protective unit and purposefully recruit others with shared values and goals, reinforcing strong emotional and values-based bonds.

A family-like culture in social enterprises can also emerge when there are kinship ties in the organization, such as when the founders are siblings or a couple. Finally, the emergence of a family-like culture in these enterprises can be influenced by the cultural context in which they operate. For example, this is common in countries such as Indonesia, India and the Philippines, where close, cohesive relationships within families and extended groups are valued, and where there’s an emphasis on loyalty, mutual obligations and interdependence. For social enterprises operating in such cultural contexts, the emergence of a family-like culture may be a natural extension of societal norms and values.

How does a family-like culture help social enterprises?

In many low- and middle-income countries, such as Malaysia where our research took place, social enterprises operate in contexts with limited institutional support and legitimacy for their work. For example, the general public in these countries may not know what a social enterprise is, or business regulation may not be appropriate for the needs of these organizations. In these environments, the strong bonds and commitment fostered by a family-like culture can be a lifeline, helping organizations navigate institutional and resource constraints. For instance, when a social enterprise struggles to secure funding or faces regulatory hurdles, the shared sense of purpose and belonging among its members can provide the resilience and motivation needed to persevere. In social enterprises with a family-like culture, the survival of the organization ensures not only the continuity of its social impact efforts, but also the continuity of the relationships embedded in the organization.

Moreover, a family-like culture can be a powerful draw for mission-aligned talent. In our study, we found that the social enterprise’s strong culture and values attracted and retained committed and loyal employees who were willing to go above and beyond, even when financial compensation did not meet market rates. Employees were willing to work long hours, take on additional tasks beyond their formal roles, and provide instrumental and emotional support to one another. This allowed the organization to deliver on its projects and weather difficult times, despite constrained human and financial resources.

How does a family-like culture harm social enterprises?

However, our research also revealed the potential dark sides of a family-like culture in social enterprises. When unchecked and unchallenged, the norms of caring for and supporting others can lead to burnout and exhaustion among employees, who feel obligated to constantly support their colleagues, both emotionally and practically, and thus end up working long hours. This unintended negative aspect of family-like cultures can also be exclusionary for current or potential team members who do not have additional personal resources to spare — for example, those who are unable to work extra hours due to personal health conditions or caregiving responsibilities.

In our study, we observed employees working long hours and taking on tasks far beyond their formal roles to help their “work family.” While this dedication enabled the organization to achieve its short-term goals, in some cases it also compromised its ability to meet quality standards. For example, it resulted in team members spending too much time and energy supporting co-workers in other roles — even if this support did not meet professional standards, or caused them to neglect their own work. At the same time, the close emotional bonds and loyalty in a family-like culture can make it challenging to enforce accountability and performance standards, as managers may be reluctant to provide critical feedback in an attempt to maintain harmony.

Moreover, the strong affective bonds and desire to protect the “work family” can sometimes lead to decisions that prioritize the well-being of internal members over the long-term sustainability of the organization or its social mission. For instance, we found that the social enterprise we studied occasionally took on projects that deviated from its ecological goals, or delayed difficult decisions that would have resulted in job losses, in order to protect the jobs of its “family members.” While these decisions were understandable given the culture of care, they also threatened the organization’s ability to stay true to its mission — and indeed to survive in the long term.

How can social enterprises harness the benefits of a family-like culture while mitigating its potential risks?

Given the double-edged nature of family-like organizational cultures, members of social enterprises — including founders and employees — need to consciously harness the benefits while putting up guardrails against the risks. The following practices can be helpful in this balancing act:

1. Cultivate shared values and belonging, but set clear boundaries: Encourage a culture of shared purpose, belonging, close relationships and mutual support, but also establish clear expectations around roles, responsibilities and wellbeing. This might involve setting realistic performance targets given the available resources, promoting open communication about workload and capacity, regularly checking in with employees to ensure they feel supported but not overburdened, and modeling healthy boundaries between work and personal life. Additionally, social enterprises can provide training on how to lead with empathy and support while also maintaining professionalism and accountability.
2. Balance short-term needs with long-term sustainability: Be mindful of how a family-like culture can influence decision making, and strive to balance the needs of internal members with the long-term sustainability of the organization and its social mission. This may require setting clear criteria for project selection, and regularly assessing the alignment between activities and mission. Regardless of their work culture, social enterprises can benefit from encouraging diverse perspectives in decision making, and creating room for constructive debate and input from external stakeholders or experts. For example, some social enterprises have a team whose role in decision-making processes is to challenge assumptions and ensure that all potential risks and downsides are considered. Enterprises with a family-like culture could benefit from adopting similar practices.
3. Regularly assess and address unintended consequences: Ensure that leaders and other stakeholders in the organization have regularly scheduled — and consistently prioritized — time to proactively identify and address any unintended consequences of a family-like culture, such as exclusion, burnout or mission neglect. To make these reflection and assessment opportunities useful, social enterprises need to encourage open and honest communication at all levels of the organization, whereby employees and external stakeholders can share feedback and concerns without fear of retaliation or judgment.

In conclusion, family-like cultures in social enterprises can be a double-edged sword, offering both significant benefits and potential risks. For social enterprises already embodying this culture, the key is to approach it with intentionality and nuance, harnessing the power of strong bonds and shared values — while also setting clear boundaries, promoting well-being, and making decisions that balance the needs of internal members with those of the external communities they serve. For social enterprises without a family-like culture, it’s essential to carefully assess the organization’s needs, context and goals before deciding if this approach aligns with its mission and values. 

But if you are involved in a social enterprise that’s developing (or reassessing) its organizational culture, remember that these cultures aren’t static: If you see potential benefits in elements of a family-like culture, consider gradually and intentionally incorporating them in ways that support your goals. Ultimately, the most crucial factor is developing and nurturing a culture that best supports your ability to create social impact and maintain financial sustainability within your unique context.

Andreana Drencheva is a Senior Lecturer (Associate Professor) in Entrepreneurship at King’s College London.

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