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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.
Notes
1. We also added as control variables: generation in control and generational involvement. These two controls were not significant in any of our regressions. Although there is no universal agreement on this issue (Atinc, Simmering, and Kroll Citation2012; Breaugh Citation2008; Spector and Brannick Citation2011), we felt that including nonsignificant control variables would eat up degrees of freedom; and also as expected, generation in control was highly correlated with firm age. For these reasons, we finally did not control for these two variables.
2. In our data set, only five firms have more than 250 employees.
Additional information
Notes on contributors
Francesco Chirico
Francesco Chirico is Associate Professor at the Jönköping International Business School, Center for Family Enterprise and Ownership.
Massimo Bau’
Massimo Bau’ is Research Fellow at the Jönköping International Business School, Center for Family Enterprise and Ownership.