Is the Family an “Asset” or “Liability” for Firm Performance? The Moderating Role of Environmental Dynamism

Abstract

By integrating the stewardship and agency perspectives, our study extends the understanding of the dynamics that regulate the family as either an asset or liability for the firm. Our results show that the percentage of family members on the top management team (TMT) has an inverted U‐shaped relationship with firm performance. However, when environmental dynamism is low, this curvilinear relationship becomes steeper. When environmental dynamism is high, an increased percentage of family members on the TMT enhances firm performance.

Is non-family social capital also (or especially) important for family firm performance?

“…Third, although we control for the percentage of family members on the TMT (an important proxy for family involvement; see Chirico and Bau, 2014) and the family generation in control (see Ling and Kellermanns, 2010), other family influence variables (e.g. generational involvement, presence of a family CEO) might affect our results.…”

“…Finally, as previously mentioned, our firms are all family owned; however, we controlled for family involvement using the percentage of family members on the top management team (TMT), given its potential effect on family firm performance (e.g. Chirico and Bau, 2014).…”

Family embeddedness and entrepreneurship experience: a study of Indian migrant women entrepreneurs in Australia

“…A large body of literature now recognizes the effect of family on work domains, illustrating how family can influence entrepreneurship through opportunity emergence and recognition, the decision to set up a new venture and access to resources. Family as a non-economic actor is increasingly being acknowledged as a 'critical factor in entrepreneurial activity in emerging economies' (Habbershon and pistrui 2002;Sabah, Carsrud, and Kocak 2014, 306), and has received much attention in the context of family businesses (Chirico and Bau 2014;Sabah, Carsrud, and Kocak 2014) and women's entrepreneurship (Rouse and Kitching 2006;Shivani, Mukherjee, and Sharan 2006); however, its implications for MWEs have not been sufficiently explored. One of the dominant characteristics of Indian culture is the importance placed on family as a central social unit and institution.…”

Knowledge sharing in small family firms: A leadership perspective

“…Caspersz and Thomas (2015) suggest that authenticity fosters, in turn, a positivity that encourages knowledge contribution and appreciation from across the organisation. Further still, participative approaches are also quoted as a way in which knowledge sharing is encouraged and the knowledge resource diversified in family firms (Chirico & Baù, 2014). Participation is found to offer a coordinating mechanism to mitigate the risks of conflict by maintaining co-alignment amongst individuals, whilst constructively building a diverse yet complementary knowledge base (Chirico et al, 2011).…”

“…First, approaches to leadership have been found to be critical in the development of a firm's knowledge resource (Sorenson, 2000). However, the broader family firm literature outlines a wide-ranging variety of leadership approaches to exist across these diverse organisations (Milton, 2008;Chirico & Baù, 2014;Mussolino & Calabró, 2014). As a further complexity, the enhanced role of individual owner-managers in small family firms means the application of any approaches to management is incongruent (Westhead & Howorth, 2007).…”