An Ongoing race: family CEOs vs. non-family CEOs

Khanin, Dmitry; Rakshit, Atanu; Mahto, Raj V.; McDowell, William C.

doi:10.1007/s11365-019-00602-8

Cited by 8 publications

(6 citation statements)

References 64 publications

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“…Posisi presiden direktur dalam sebuah perusahaan keluarga di Indonesia cenderung diwariskan kepada anggota keluarga melalui proses suksesi yang dilakukan dari generasi ke generasi (Yopie & Itan, 2016). Namun, terkadang perusahaan keluarga dapat memutuskan untuk tidak mewariskan posisi presiden direktur kepada anggota keluarga dengan berbagai alasan (Khanin et al, 2020). Sehingga, posisi presiden direktur diberikan kepada anggota non-keluarga, atau lebih umum disebut sebagai presiden direktur profesional.…”

Section: Pengaruh Presiden Direktur Profesional Terhadap Kinerja Perusahaanunclassified

Analisis Pengaruh Keterlibatan Keluarga terhadap Kinerja Perusahaan di Indonesia

Yopie

Chrislin

2022

Owner

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Family businesses have steadily dominated the economy sector in recent decades. A number of scholars have focused on the link between management by family members and firm performance. However, the findings are not conclusive and vary. As a result, a re-examination is necessary. The goal of this research is to determine the possible influences caused by family presence, non-family shareholders, professional president directors, and founder-managed firms on firm performance, as well as the link between family presence and firm performance when family firm reputation is taken into the account. Firm performance was valued by measuring return on asset and equity, sales growth, and tobin’s q. This study examined 600 samples consisting 120 family firms in manufacturing and service sectors on Indonesia’s Stock Exchange beginning with the year 2016 – 2020. To make data analysis more straightforward, panel regression research (time series and cross-sectional data) was conducted utilizing PLS 3.0 software. The study results prove family presence, professional president directors, and founder-managed firms have positive impact on firm performance. Meanwhile, non-family shareholders showed negative impact towards firm performance. Furthermore, the findings of this study also show the favorable impact of family presence on firm performance may be bolstered by family firm reputation.

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Section: Pengaruh Presiden Direktur Profesional Terhadap Kinerja Perusahaanunclassified

Analisis Pengaruh Keterlibatan Keluarga terhadap Kinerja Perusahaan di Indonesia

Yopie

Chrislin

2022

Owner

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“…According to Miller and Le Breton-Miller ( 2006 ), family businesses are likely to attach more importance to continuity than non-family businesses. On the other hand, (Khanin et al 2020 ) found that non-family CEOs moderately outperform family CEOs in “monitoring or performance appraisal and improvement”. In addition, Kraus et al ( 2020 ) highlighted that with family ownership, the probability that companies follow formal crisis procedures is reduced (Faghfouri et al 2015 ), and family businesses sacrifice short-term results and shareholder value for long-term survival (Lins et al 2013 ).…”

Section: Literature Reviewmentioning

confidence: 99%

Measuring the impact of financial cycles on family firms: how to prepare for crisis?

Škare

Porada-Rochoń

2021

Int Entrep Manag J

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Financial cycles have sizeable economic effects, as witnessed during the 2008 financial crisis. However, despite the topic’s research importance, there is limited literature on how financial cycles and financial crises affect individual family firms. To the best of our knowledge, our study is among the first to measure the impact of financial cycles and crises on family firms. To study the impact of financial cycles on family firms, we use the Amadeus database on European companies. We identify family firms following the Global Family Business Index methodology 2019 (EY and the Center for Family Business of the University of St. Gallen). To measure the impact of financial cycles, we use the credit-to-GDP gap indicator from the Bank for International Settlements. Using the credit-to-GDP gap as a proxy for financial cycles, we use panel structural vector autoregression (Abrigo and Love 2016 ), Wald tests of Granger causality (Granger 1969 ), and impulse response functions (Lütkepohl 2010 ; Lütkepohl et al. 2015 ). We prove that family firms are less vulnerable than non-family firms to financial cycles during both financial booms and busts. Family firms perform better when financial cycle shocks have a less pronounced impact on firms’ performance. Non-family firms are highly vulnerable to financial cycles, performing worse during both booms and busts. The adoption of family firm management and governance policies should improve non-family firms’ performance and help the economy recover rapidly in times of crisis (exogenous shocks). Our study is the first to explore the impact of financial cycles on the micro level with a focus on family firms. The results could help managers and practitioners better form their business policy by looking at family firms’ experiences. Targeting economic policy more towards family firms in good and bad times will allow policymakers to prepare for future economic crises.

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“…Most founders of a family business want to maintain family control and protect its legacy (e.g., Astrachan et al, 2002;Duran et al, 2016;Jaskiewicz et al, 2015;Salvato et al, 2012;Sciascia et al, 2014). This aspiration may sometimes be due to the propensity towards nepotism in family businesses (Khanin et al, 2019), although some research (Burkart et al, 2003;Lee et al, 2003) alludes to more rational reasons in a number of specific situations: for example, cases where the current legal system provides low protection for shareholders such that the separation between ownership and control would be inefficient; the family gains reputational and non-pecuniary benefits if it maintains leadership within the family; or when companies' competitive advantages are based on idiosyncratic knowledge that can only be efficiently transferred to very reliable family or close non-family members. Founders of the family business tend to have an entrepreneurial character, evident when they recognize and exploit the opportunity to create a business (Aldrich & Cliff, 2003); however, over time, they often become more conservative and lose that entrepreneurial orientation (Dertouzos et al, 1989;Röd, 2016;Salvato, 2004;Zahra et al, 2004).…”

Section: Succession In the Family Businessmentioning

confidence: 99%

“…On the contrary, although it is argued that the coincidence of ownership and control can reduce agency costs due to the overlapping interests, hiring too many relatives in these positions can raise questions because while it is difficult to find a good manager, it is even more difficult to find a good manager from inside the family (Zuñiga & Sacristán, 2009). In these cases, the selection and remuneration are based more on family ties than on the professional experience or managerial competence of the candidates (Fukuyama, 1995;Khanin et al, 2019;Le Breton-Miller et al, 2004;Ng et al, 2019), which leads to low-qualified managers who are ill-prepared to properly manage the company. Another factor that encourages the hiring of family managers is the difficulty family businesses face in attracting sufficiently qualified external managers (Carney, 2005;Sirmon & Hitt, 2003).…”

Section: Family Managersmentioning

confidence: 99%

“…First, although it is possible that a family member may possess the necessary attitude and knowledge, a reliance on family ties to promote or hire managers (Khanin et al, 2019;Westhead, 1997) leads to a large number of family members in important positions who will tend to be poorly qualified, unaware of appropriate methods and instruments for business management, and/or will lack strategic and entrepreneurial attitudes, which are essential for forging the appropriate managerial capabilities (Khanin et al , 2019). Second, given that family managers inevitably try to achieve a better future for the family through the business (Chua et al, 1999;Sharma et al, 1997), as the number of family managers increases, the line between family and business becomes less clear and the prevalence of family and business interests hinders the development of a strategic conception of the business and effective leadership (Khanin et al, 2019). Third, an excessive degree of family involvement in managerial positions can spark conflicts (Miller & Le Breton-Miller, 2006), preventing objective decision-making and the acceptance of diverse opinions.…”

Section: Family Managersmentioning

confidence: 99%

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Las capacidades directivas en la empresa familiar turística: ¿Es la profesionalización la clave para su desarrollo?

Camisón

Puig-Denia

Forés

et al. 2021

EJFB

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Este trabajo tiene como principal objetivo analizar los elementos de la particular estructura de gobierno de la empresa familiar y la implicación de la familia en el negocio con tal de comprobar sus efectos sobre las capacidades directivas. Asimismo, se estudiará la profesionalización en este tipo de empresas como variable moderadora. Para abordar este análisis, se tomarán como base el Enfoque Basado en Recursos y Capacidades y la Teoría de la Agencia. El estudio empírico se lleva a cabo sobre una base de 591 empresas turísticas españolas mediante un análisis de regresión lineal múltiple. Los resultados demuestran que muchas de las características peculiares de la empresa familiar ejercen un efecto negativo sobre sus capacidades directivas, impidiendo su correcto desarrollo. Sin embargo, la profesionalización del máximo responsable de la empresa familiar contribuiría a paliar dichos problemas, facilitando el desarrollo de dichas capacidades en la empresa familiar.

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An Ongoing race: family CEOs vs. non-family CEOs

Cited by 8 publications

References 64 publications

Analisis Pengaruh Keterlibatan Keluarga terhadap Kinerja Perusahaan di Indonesia

Analisis Pengaruh Keterlibatan Keluarga terhadap Kinerja Perusahaan di Indonesia

Measuring the impact of financial cycles on family firms: how to prepare for crisis?

Las capacidades directivas en la empresa familiar turística: ¿Es la profesionalización la clave para su desarrollo?

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