CEO turnover in family firms: How social exchange relationships influence whether a non-family CEO stays or leaves

Interpersonal relationships are an important factor in organizations, and a growing number of articles examine how such relationships affect why people stay or leave organizations. In this article, we investigate how affective attachment between actors influences the turnover and retention process of non-family CEOs in family firms. By employing a social exchange perspective, we reveal under which conditions affective attachment come into being. We focus on the relationship between a non-family CEO and two generations of the owner family. Conceptualizing their relationship as an exchange triad, we show how imbalances influence the affective attachment created in this triad and outline the implications for turnover. Our article contributes to the literature on family businesses and turnover by linking the affective side of interpersonal relationships to CEO retention and turnover.     

Entrepreneurial orientation in family firms: the moderating role of technological intensity and performance

This paper examines how socio-emotional factors can influence family firms’ commitment to entrepreneurially- oriented activities, and how their level of commitment is moderated by the technological intensity of the sector and firm performance. We find that, while family firms are less entrepreneurially-oriented than non-family firms, this gap closes with increasing technological intensity of the sector. We find no evidence, however, to suggest any change in entrepreneurial orientation in family firms resulting from a drop in firm performance.     

An Organizational Justice-Based View of Self-Control and Agency Costs in Family Firms

abstract    By integrating insights from two seemingly disparate literatures – economics and organizational justice – within the general agency framework, we advance propositions that suggest a fine-grained explanation of agency costs at family firms. In so doing, we account for the differential effects of the controlling owners' self-control (i.e. the governance mechanisms they adopt and how they administer those mechanisms) on the justice perceptions of the family and non-family employees. Our integrative view allows us to strike a realistic balance between the overly optimistic views about family firm governance that have been expressed by agency scholars and the overly pessimistic views expressed by management scholars in the past few years.     

Bifurcated HR practices in family firms: Insights from the normative-adaptive approach to stepfamilies

This paper seeks to stimulate additional research on a form of workforce differentiation specific to family firms: the asymmetric treatment of family versus nonfamily employees. Argued to be manifest within differential HR practices applied to each group, little is known as yet about the nature, prevalence, origins, and consequences of this ‘bifurcation bias’. Our overarching thesis is that greater insight can be gleaned by considering family firms as analogous to stepfamilies, which we demonstrate by drawing upon work adopting a normative-adaptive approach to stepfamily research. A key contribution of our resultant interdisciplinary theory-building is a typology of different bifurcated HR practice bundles in family firms. We also develop propositions regarding (a) owning family characteristics that contribute to the various forms of bifurcation, (b) conditions under which the presumed dysfunctional consequences can be attenuated, and, (c) the functionality of a particular type that we term ‘bivalent bifurcation’.     

The impact of market and industry risk on family succession

This study investigates the succession decision of family firms in connection with the risk environment faced by the firm. Succession itself can rightly be considered a risk event due to managerial uncertainty. This uncertainty coupled with a high risk operating environment magnifies the critical importance of making a correct succession decision. In this paper, the primary focus is on how market and industry risk influence the selection of either a family member or a family external professional as the successor, and how this decision impacts post-succession firm performance. Our sample is comprised of 383 succession events in Taiwanese listed companies over a twenty-year period (1997–2016). Using industrial profitability risk and systematic risk as the risk measures, we find that firms operating in a high-risk environment tend to employ a non-family member as the successor which on average leads to superior post-succession performance compared to firms that choose a family member as the successor. This result particularly holds when the non-family successor is able to successfully reduce firm-level risk. Overall, our results demonstrate that the risk condition of a firm is an important determinant of the succession decision of family firms, and that a non-family successor is more competent in managing a high-risk operating environment.     

Shareholder Activism, "Voluntary" Restructuring, and Internal Labor Markets

We model an internal labor market in which employee behavior and compensation are affected by the firm's financial position and the threat of hostile takeover or other exercise of shareholder "voice." We show how good past performance can result in excessively generous promotion and pay decisions. While the threat of shareholder activism will remove this "slack," activists optimally face a positive cost barrier, which in turn varies across firms. The cost barrier is higher when cooperation or "helping" between employees is more important, and is lower when employees receive efficiency wages due to an inability to "pay" for their jobs. Since the importance of helping is associated with pay compression and "flat" pay ladders, such firms should also exhibit a greater degree of management entrenchment.     

Formalized HR practices and firm performance: an empirical comparison of family and non-family firms

The influence of the family on human resource (HR) management structures creates important idiosyncrasies with potential implications in terms of firm performance. Based on the agency and socioemotional wealth perspectives, this paper examines the formalization and effectiveness of three basic HR practices – selection, training and compensation – in different contexts of family and non-family firms. Using a sample of 500 Spanish companies, the results show that a higher degree of HR formalization has a positive influence on firm performance, confirming the negative moderating influence of family involvement on the relationship between the formalization of training practices and the firm performance. In addition, the findings indicate that the mediating role of selection practices in the relationship between training and firm performance is smaller in family than in non-family firms.     

Making sense of HR in family firms: Antecedents,moderators, and outcomes

Family business researchers have felt increasing distress with the lack of understanding about how families – i.e., their structure, relationships, emotions, and goals – shape how families manage family firms, leading to calls to more fully incorporate “family science” theories about the nature of family into research about family firms. It seems likely that families' first impact in family firms will be on how employees are treated and managed. Thus, this special issue brings together papers that offer an early glance at what is to be gained by leveraging theories about family to help explain how families influence human resource management within family firms, and how human resource management, in turn, impacts key family firm outcomes.     

控股家族涉入能促进企业履行环境责任吗？——基于中国A股上市公司的证据

基于2009—2017年我国沪深A股上市公司样本,比较了家族企业与非家族企业所履行的环境责任差异,研究了控股家族涉入对企业环境责任行为的影响。研究结果发现：家族企业比非家族企业更少地履行环境责任;在家族企业中,所有权比例的增加会显著降低环境责任水平,家族成员出任董事长会象征性地披露更多环境责任信息,家族涉入时间与环境责任之间总体上呈现出倒U型关系。进一步研究表明,家族企业会有选择地履行环境责任以维护家族声誉同时减少经济利益损失,控股家族涉入对环境责任的影响在创业型和非创业型家族企业中有所不同,在强制披露的企业中所有权比例对企业环境责任的消极影响会有所减弱。     

家族企业非家族员工利他行为的管理策略

利他行为是一种角色外行为,它能提高同事的工作绩效,最终有利于团队或组织的有效运作。本文研究家族企业非家族企业员工的利他行为。利他行为的影响因素包括个人特征、工作特征、动机、社会网络、领导行为、群体凝聚力和文化价值观等。针对这些因素,作者提出招聘员工时进行人格测试;加强员工培训和教育,奠定培养员工利他行为的基础;建立集体主义导向的管理策略。     

The relationships between multifoci workplace aggression and work–family conflict

This study examined the relationships between multifoci workplace aggression by supervisors, coworkers, and customers and employees’ work–family conflict (ranked by spouses or closest family members). Furthermore, this study explored how employees’ problem-focused coping levels moderate the relationship between multifoci workplace aggression and employees’ negative affect, which subsequently influences their work–family conflicts. Data from a sample of 457 working adults and their spouses (or their closest family members) and results showed the direct effects of multifoci workplace aggression on employees’ work–family conflict. This research also found that problem-focused coping would weaken the relationship between supervisor/coworker aggression and employees’ negative affect. Moreover, the results revealed that the effects of multifoci workplace aggression spilled over into employees’ family domain through negative affect and influenced their work–family conflicts (ranked by spouses or closest family members). Finally, a moderated-mediation model used in this study supported the hypothesis that negative affect mediates the interactive effects of multifoci workplace aggression and problem-focused coping on employees’ work–family conflicts. The theoretical and practical implications of these findings are discussed.     

Is expatriation good for my career? The impact of expatriate assignments on perceived and actual career outcomes

This study examines the impact of expatriate assignments on career growth and the external marketability of US employees of a large professional services firm. We use survey and archival data to compare expatriates currently overseas, repatriates, and domestic US employees on compensation, recent promotions, and external recruiting contacts. We then examine how actual pay, promotions, and external recruiting influences anticipated salary growth within the firm and external employment opportunities. We find that despite little or no impact on their current careers, employees with overseas work experience perceived greater internal and external opportunities than domestic US employees. Implications for managers and researchers are discussed.     

Social capital and innovation in family firms: The moderating roles of family control and generational involvement

Drawing on the social capital literature, we examine whether the co-existence of distinct yet interacting social groups, namely family and non-family members, creates the conditions for increased family firm innovation. In particular, we theorize that family and non-family social capital have a joint positive effect on family firm innovation and this joint effect is stronger than the single effects of family and non-family social capital. In addition, we predict that while family control has a positive moderating effect, generational involvement has a negative moderating effect on the above-mentioned relationship. With supportive empirical results, our research makes important contributions to the existing literature.     

Influence factors for operational control and compensation in professional service firms

Professional service firms have distinct operational challenges due to the type of work that is transacted by the employees of these firms, and due to the nature of the employees themselves. In this paper, we develop and present factors that influence professional service operations in firms and compensation structures for professional service providers. We establish professional service influence factors, which we posit will impact agency relationships in professional service firms. That is, we hypothesize that professional service influence factors (PSIFs) will moderate the effect of task programmability and outcome measurability in predicting the use of behavior- or outcome-based compensation schemes (control strategy). Logistic regression is used on data provided by 192 professional service providers in order to examine the impact of the agency variables and moderating factors on control strategies. The results indicate that company- and profession-based factors have moderating effects on task programmability when predicting control strategy. We discuss the implications of our findings.     

Production functions and productivity of family firms: Evidence from the S&P 500

This paper examines whether the higher profitability and valuation of family firms is related to differences in production technologies and production efficiency. Using data on S&P 500 manufacturing firms, we find that family firms are more productive than comparable non-family firms. Furthermore, our results show that the production technologies of family and non-family firms do not differ per se, thereby suggesting that the differences in the level of production output are caused by higher production efficiency of family firms. These findings indicate that the superior performance of family firms is related to their more efficient use of labor and capital resources.     

An insider's point of view: how a system of flexible working hours helps employees to strike a proper balance between work and personal life

Increasing numbers of organisations offer flexible working hours to help employees balance work and personal life. However, studies about the effects of flexible working hours on work–life balance and organisational outcomes are ambiguous. The aim of this study is to gain greater insights into how employees experience the influence of flexible working hours on their work–life balance. A qualitative research was performed by in-depth interviews with a variant sample of 15 employees and thematic analysis of the data. The more family responsibilities the respondents have, the more they tend to perceive flexible working hours as a necessity rather than an extra benefit. According to the interviewees, the system creates a situation which is advantageous for both employer and employee. The extent to which this is achieved though depends on how organisations apply and implement it. It is concluded that when flexible working hours are supported by management and fit the work culture, they are highly appreciated both for private and work-related reasons. Moreover, its meaning for the private life varies according to life stage. Findings are important for policy makers and human resources managers alike in order to implement and deal with flexible working hours effectively. Consequently, this will help employees strike a proper balance between work and personal life generating beneficial organisational outcomes.     

The Interactive Effects of Psychological Contract Breach and Organizational Politics on Perceived Organizational Support: Evidence from Two Longitudinal Studies

We explore the effects of the social context on the relationship between psychological contract breach (PCB) and perceived organizational support (POS) in two studies. We build on the premise that psychological contract breach (i.e. the organization's failure to fulfil the obligations employees believe they are owed) signals to employees that they are not cared for and valued by the organization (i.e. reduces POS). In support, a longitudinal study of 310 employees shows that PCB at Time 1 explains significant variance in POS at Time 2 (beyond that explained by POS at Time 1). Building on this result, we advance the argument that employees' perceptions of organizational politics serve as a heuristic for the overall benevolent or malevolent character of the organization and its agents. Accordingly, we expect that when employees perceive PCB and high levels of organizational politics, they will be more likely to hold the organization responsible for PCB and thus report lower levels of POS in response to breach. This line of reasoning received support in a second study of 146 employees which showed that perceptions of organizational politics moderate the PCB–POS relationship. Our results suggest that the social context in which psychological contract breaches occur matters and that managers should consider the organization's perceived political landscape when anticipating how employees will respond to broken promises.     

Beyond managerial talent: ‘key group’ identification and differential compensation practices in multinational companies

With the maturation of strategic human resource management scholarship, there appears to be a greater call to move from monolithic workforce management to a more strategic and differentiated emphasis on employees with the greatest capacity to enhance competitive advantage. There has been little consideration in the literature as to whether organizations formally identify key groups of employees based on their impact on organizational learning and core competences. Using survey evidence from 260 multinational companies (MNCs), this paper explores the extent to which key groups of employees are formally recognized and whether they are subject to differential compensation practices. The results demonstrate that just in excess of half of these MNCs identify a key group. There was considerable differentiation in the compensation practices between these key groups, managers and the largest occupational group in the workforce. The results give rise to questions worthy of future investigation, namely whether the differentiated approaches used lead to improved performance outcomes.     

Performance-enhancing compensation practices and employee productivity: The role of workplace bullying

Performance-enhancing compensation practices are designed to increase employee productivity through greater accountability, while highlighting performance differentials across employees. While productivity increases may occur, these practices can also stimulate an unintended consequence: workplace bullying. In this paper, we present a typology and conceptual model that explore the boundary conditions under which performance-enhancing compensation practices may result in bullying behavior with differential effects on target and perpetrator productivity. We propose the mediating roles of individual competition and stress between zero-sum pay systems and workplace bullying. In our model, we propose that perpetrators will realize increased productivity. This increased productivity will be generated through instilling fear in the targeted employee to compete for output, which will increase the perpetrator's relative ranking. As a result, targets will tend to suffer decreased productivity. We conclude with a discussion of the theoretical contributions, practical implications, and offer directions for future research.     

Differentiating emotional intelligence in leadership

Leadership has received considerable attention since the 1990s. We claim that leaders can be found at all levels of employment, and at the very least, all managers are expected to be leaders. Yet managerial status does not guarantee leadership. Leadership is a necessary component of and a filter for successful management. Effective managers demonstrate leadership capabilities. Leadership attributes are well captured in measures of emotional intelligence (EQ). Hence, leadership can improve if managers work to develop their EQ. We show how EQ, and hence leadership, can vary by level of employment among a composite international group of 3,305 employees with the Six Seconds Emotional Intelligence Assessment. The relationship between six leadership groups, as based on their EQ performance, across different employment levels was statistically examined, suggesting that leadership is realized in different ways depending on level of employment. It appears that employees become more skillful in emotional literacy and consequential thinking as they progress up the employment ladder. Intrinsic motivation and optimism are best leveraged by nonmanagerial rather than senior employees. The diminishing incorporation of empathy with an increase in employment level seems to stand in sharp contrast. Nonmanagerial employees, specialists, and entrepreneurs will benefit from developing their competence in pursuing their objectives with an overarching sense of purpose. The finding that high‐EQ leaders seem to dominate in the managerial levels may be viewed as encouraging.