Identifying the Factors That Shape Ethical Leadership Practices in Family-Owned Businesses
Keywords:
ethical leadership, family-owned businesses, qualitative research, organizational ethics, Iranian business culture, nepotism, leadership valuesAbstract
This study aims to explore and identify the key factors that shape ethical leadership practices in family-owned businesses within the socio-cultural context of Tehran, Iran. A qualitative research design was employed to gain an in-depth understanding of ethical leadership in family business settings. Data were collected through semi-structured interviews with 23 participants holding leadership roles in family-owned enterprises based in Tehran. Participants were selected using purposive sampling to ensure relevance and experience in the topic of inquiry. Interviews continued until theoretical saturation was achieved. All interviews were audio-recorded, transcribed verbatim, and analyzed using thematic analysis with the assistance of NVivo software. Rigor was enhanced through member checking, peer debriefing, and iterative coding. Three main themes emerged from the analysis: (1) moral foundations of leadership, including integrity, role modeling, justice orientation, and religious-cultural values; (2) family dynamics and ethical tensions, such as nepotism, emotional entanglements, generational value clashes, and informal governance; and (3) organizational culture and context, including ethical norms, communication climate, employee empowerment, and ethical decision-making processes. Participants emphasized both the enabling and constraining effects of familial relationships and cultural expectations on ethical conduct. The findings highlight how personal values, family loyalty, and contextual pressures interact in complex ways to shape leadership ethics in practice. Ethical leadership in family-owned businesses is deeply embedded in cultural, familial, and organizational contexts. While personal moral convictions guide much of leaders’ behavior, challenges such as nepotism, informal governance, and intergenerational conflict complicate the consistent application of ethical principles. Context-sensitive strategies that incorporate both traditional values and modern ethical standards are essential to fostering ethical leadership in such enterprises.
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