Ownership and Management Issues Associated With Family Firm Performance and Company Objectives

By Paul Westhead, Carole Howorth. 2006

487 citations recorded by the source corpus.

Agency and stewardship theories are used to explore associations between ownership and management profiles and the performance and objectives of family firms. Using data from privately held family firms in the United Kingdom, a range of performance measures and objectives were examined. Multivariate regression analysis detected that closely held family firms did not report superior firm performance. The results show that the management rather than the ownership structure of a family firm was generally associated with selected firm-performance indicators and nonfinancial company objectives. Although family CEOs were associated with lower propensity to export, presented evidence generally fails to suggest that private family firms should avoid employing family members in management roles.

Subfields: Accounting, Management of Technology and Innovation, Organizational Behavior and Human Resource Management

View Paper: https://www.semanticscholar.org/paper/413aa52a490eaceb5e294ba7714f4362dec2d05a

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Citations in the corpus

Trends in family business research (2013, background): “Although there are some contributions that examine the influence of specific management dimensions on family firm performance (Danes et al. 2007; Westhead and Howorth 2006), future studies should consider a broader range of variables relating to organization and management; for instance, it would…”
The Internationalization of Family Firms (2014, background): “…indicate no impact of higher generational involvement on internationalization, an effect that can be explained by the increasing size of the businesses throughout generations and therefore diluted influence of single generations on operations (Okoroafo & Koh, 2010; Westhead & Howorth, 2006).”
Family firms: A research agenda and publication guide (2011, background): “Westhead and Howorth’s (2007) study of private family firms distinguished between first and multiple generation firms; diluted family firms, average family firms, professional family firms, open family firms and transitional family firms, on the basis of their mix of financial versus family objectiv”
Socioemotional Wealth and Earnings Management in Private Family Firms (2010, background): “…play an important role in understanding decision-making behavior in family firms (e.g., Basco & Pérez Rodríguez, 2009; Distelberg & Sorenson, 2009; Gómez-Mejía et al., 2007; Sharma, 2004; Westhead & Howorth, 2006), little evidence exists about this issue and especially in an accounting context.”
The Temporal Evolution of Proactiveness in Family Firms (2013, background): “Indeed, family firms with low managerial control dispersion tend to be governed by ownermanagers who control their firm’s structure, resources, and strategy without the input of other family members (Westhead & Howorth, 2006).”
Family SMEs' Internationalization: Disentangling the Influence of Familiness on Spanish Firms' Export Activity** (2015, background): “Other studies also find the positive impact of new generational involvement in internationalization based on the probability of diluted family influence or control on business operations (Westhead and Howorth 2006).”
Family Involvement in Ownership and Management: Exploring Nonlinear Effects on Performance (2008, methodology): “Second, it develops the findings of Lauterbach and Vaninsky (1999), Filatotchev et al. (2005), and Westhead and Howorth (2006) regarding the presence of a negative relationship between FIM and performance, adding more details on the shape of it.”
Family Firm Heterogeneity: A Definition, Common Themes, Scholarly Progress, and Directions Forward (2021, background): “Some studies suggest that family management, rather than ownership, is more closely associated with financial and nonfinancial outcomes (Westhead & Howorth, 2006).”