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In this thesis the aim was to analyze the purpose of family firms and to examine if they have formulated a purpose statement. Family businesses are of particular interest as they are an essential part of the economy. Three approaches were identified as particularly helpful in the definition of family businesses. The overarching focus was particularly on the challenges and opportunities of implementing a purpose. On the basis of a case study, one company was analyzed in terms of its purpose and the communication of this. For this study, some interviews were conducted and company documents were analyzed. This research identified that the long-term preservation of the company and the transfer of values play a central role in the practices of this company., Masterarbeit Universität Innsbruck 2024

This thesis explores the key themes, trends, and variations in the purpose statements of the world's 500 largest family-owned businesses. By employing an inductive approach and content analysis methodology, this research uncovers the variations of corporate purpose expressed by these enterprises. Purpose statements, which go beyond profit maximization to include ethical considerations, community engagement, and sustainability, serve as guiding principles for strategic decisions and organizational culture. The study categorizes purpose statements into seven dimensions: Sustainability and Responsibility, Health and Well-being, Quality of Life, Innovation and Progress, Social Development, Economic Development, and Family Focused. The findings indicate that Sustainability and Responsibility, Social Development, and Health and Well-being are the most prominent themes, reflecting a strong commitment to environmental stewardship, societal betterment, and stakeholder health. Additionally, the analysis considers the impact of having a family CEO and the company’s public or private status on the articulation of purpose. Family CEOs often emphasize long-term sustainability and legacy, while public companies balance broader stakeholder interests. This research highlights the unique role of family values in shaping business strategies and underscores the importance of purpose in achieving sustainable growth and societal contributions. Overall, this thesis provides valuable insights into how family businesses leverage purpose statements to sustain their legacy, navigate contemporary challenges, and align with societal expectations. The implications for both academic research and practical applications in family business management are significant, offering a comprehensive understanding of the evolving landscape of corporate purpose., Masterarbeit Universität Innsbruck 2024

Since the launch of OpenAI's ChatGPT 3.0 the potential of AI applications in natural language processing has become increasingly evident. The rapid advancements of artificial intelligence (AI) technologies, particularly large language models (LLMs), have captured the attention of both academia and industry, illustrating a demand for a deep investigation into the driving forces behind their adoption. Family firms, due to their importance to global economies represent an important subject of innovation diffusion research. The distinct characteristics of family firms have been shown to create unique innovation opportunities and challenges. By applying and expanding upon the diffusion of innovations framework, this research examines how the perceived attributes of LLMs, individual innovativeness and the family’s influence on the firm affect the intention to use a LLM. For these purposes, a quantitative cross-sectional design was employed, gathering data through an online survey from 77 respondents across 30 Tirolean family firms. The data was analysed using a mixed linear model to account for nested data structures. The findings indicate that the compatibility of LLMs with existing workflows and values, as well as the observability of results obtained with a LLM, are significant drivers of innovation adoption. Additionally, a person’s propensity to adopt new technologies earlier than others, represented by the innovativeness construct, is found to have a very strong effect on the intention to use a LLM. Lastly, the study is not able to find a statistically significant moderation effect driven by family firm influence. The findings contribute to the academic literature on innovation diffusion and offer practical insights for enhancing AI adoption strategies in the unique organizational context of family business. This research provides a robust framework for future studies exploring the intersection of family dynamics and innovation diffusion., Masterarbeit Universität Innsbruck 2024

While family firms' tradition and innovation have been focusing points in scholarly discussions, the impact of corporate forgetting on innovation within these entities remains unclear. This thesis attempts to address this gap by studying closely how intentional and unintentional corporate forgetting influences innovation in family firms. Family firms, with their unique characteristics such as strong connections to their past and traditions and long-term orientation, raises an interesting question: can these attributes foster innovation, or do they act as barriers to it? Drawing on qualitative data from 12 interviews with multi-generational members of Greek family firms, this study explores the complex relationships between innovation and corporate forgetting. Theoretical studies have highlighted the potential positive effects of tradition on innovation; however, it is still controversial how a traditional context, including organizational memory, quantitatively affects the lower willingness and higher ability of family firms to innovate. The findings shed light on a delicate balance: while preserving historical knowledge can stimulate innovation, the unintentional discarding of valuable knowledge can hinder the potential for innovation. By offering empirical evidence on the interaction between corporate forgetting and innovation, this research contributes to a deeper understanding of organizational dynamics in family firms. It highlights the necessity of strategic memory management, especially in the aspect of forgetting., Masterarbeit Universität Innsbruck 2024

Despite the 2015 Paris Agreement, climate goals remain unmet, necessitating fundamental economic transformations. Family firms, constituting 91% of German, and 90% of Austrian businesses, therefore are significant for the economy and its transformation. For this particular corporate form, values and traditions play a special role. However, the role of these values in driving or hindering corporate sustainability is unclear. This research explores the interplay between family values, traditions, and corporate social responsibility (CSR) engagement in family firms. Utilizing a qualitative, constructivist approach, the study investigates CSR in a variety of German and Austrian family firms. By uncovering these dynamics and their implications, this thesis aims to provide valuable insights for strategic management in family and non-family firms, to contribute to a deeper understanding of corporate social responsibility within the context of family businesses and fostering sustainable business practices. The findings will inform family and non-family firms, stakeholders, policymakers, and researchers aiming to address climate change through organizational strategies., Masterarbeit Universität Innsbruck 2024

This study contributes to the debate on family business environmental sustainability by investigating the environmental orientation of family versus nonfamily firms. We study whether family business status affects (i) the extent of environmental orientation, i.e. the number of incentives set for environmental sustainability activities, contingent upon firms’ engagement with policymakers, and (ii) how firms’ environmental orientation unfolds, considering the types and beneficiaries of the incentives. To do so, we build on behavioural theories in family business, along with the literature on firm non-market strategies and responses to institutional pressure. Data on 162 European manufacturing firms from the Carbon Disclosure Project and the Orbis database are collected. Our results show that family firms have a higher degree of environmental orientation than nonfamily firms. However, when they engage with policymakers, the family firm–environmental orientation relationship weakens. Regarding the types and beneficiaries of the incentives, family firms are more likely to provide monetary incentives and to be more inclusive in their incentive systems than nonfamily firms are.

Bakgrund: Mergers and Acquisitions har omfamnat företagsvärlden och framstår av många som en väsentlig strategi för att driva tillväxt och diversifiering. För familjeföretag innebär strategin en kombination av företagskulturer och ägandestrukturer. Dessa företag engagerarar sig både genom traditionella affärsmodeller och genom nya, integrerade strukturer, vilket skapar unika utmaningar. Detta kan leda till negativa effekter på företagets långsiktiga framgång, vilket betonar betydelsen av att förstå och fokusera på utmaningarna och hanteringen av dessa i samband med M&A-affärer. Ledare för familjeföretag har en viktig möjlighet att bidra till att hantera dessa utmaningar. Därför är det intressant att förstå hur de, tillsammans med andra kunniga individer, hanterar styrningen genom denna process. Syfte: Syftet med denna uppsats är att skapa förståelse för de strategiska, kulturella, juridiska, emotionella och ekonomiska utmaningar som uppstår för svenska familjeföretag i samband med en M&A-affär. Genom att tillhandahålla en kvalitativ analys av erfarenheter och upplevelser hos familjeföretag som genomfört M&A-affärer avser uppsatsen att ge en bättre förståelse för hur dessa företag hanterar ovan nämnda utmaningar. Metod: Studien utgörs av en kvalitativ flerfallstudie och tar ett fenomenologiskt vetenskapligt förhållningssätt. Det empiriska materialet i studien är insamlat genom tolv semistrukturerade intervjuer där personerna har en ledande roll eller är insatta i fenomenet. Med en iterativ ansats, där forskningsprocessen kontinuerligt växlar mellan teori och empiri, har en gradvis fördjupad förståelse för fenomenet kunnat utvecklas. Analysen av datan har utförts genom en tematisk analys. Slutsats: I studien framkommer det att familjeföretagens beslut påverkas starkt av socioemotional wealth, som prioriterar bevarandet av familjens arv och långsiktiga stabilitet högre än omedelbara ekonomiska vinster. Familjeföretag tenderar att upprätthålla starka personl, Background: Mergers and Acquisitions have embraced the corporate world and are considered by many as a crucial strategy for driving growth and diversification. For family firms, this strategy involves a combination of corporate cultures and ownership structures. These firms engage both through traditional business models and through new, integrated structures, creating unique challenges. This can lead to negative effects on the firm's long-term success, emphasizing the importance of understanding and focusing on the challenges that may arise in connection with M&A. Leaders of family firms have a significant opportunity to contribute to the management of these challenges. Therefore, it is interesting to understand how they, as well as other informed individuals, handle the management. Purpose: The purpose of this study is to create an understanding of the strategic, cultural, legal, emotional, and economic challenges that arise for Swedish family firms in connection with M&A. By providing a qualitative analysis of the experiences and perceptions of family businesses that have conducted M&A, the study aims to give a better understanding of how these firms manage these challenges. Methodology: The study is a qualitative multiple-case study and adopts a phenomenological scientific approach. The empirical material in the study has been collected through twelve semi-structured interviews with individuals who hold a leadership role or are knowledgeable about the phenomenon. With an iterative approach, where the research process continuously alternates between theory and empiricism, a gradually deepened understanding of the phenomenon has been developed. The data analysis has been performed through thematic analysis. Conclusion: The study reveals that the decisions of family firms are strongly influenced by socioemotional wealth, which prioritizes the preservation of family heritage and long-term stability over immediate financial gains. Family businesses tend

The thesis investigates if investors on the Swedish Stock Exchange, Nasdaq Stockholm, are compensated with a premium for holding shares in family firms due to family-specific agency costs between 2015 to 2019. The thesis uses a portfolio-based approach where the risk-adjusted returns are calculated with the Fama-French three-factor model and the Carhart’s four-factor model. A portfolio consisting of family firms displays a positive weekly alpha between 0,14 to 0,21 percent, 7,28 to 10,92 percent on a yearly basis, indicating a premium for holding shares in family firms. Additionally, the results show that firms where families control a majority of the votes lead to higher abnormal returns. A portfolio consisting of family firms with over 50 percent voting rights generate abnormal returns of 0,16 to 0,26 percent weekly, and 10,92 to 13,52 percent yearly. Higher abnormal returns when the control is higher further implies that investors are compensated with a premium for family-specific agency costs when buying shares in family-controlled firms.

Problematization: Family firms in Sweden play a vital role in the labor force, reflecting their extensive presence and essential role in the economy. Central to every family firm are its guiding values, shared among family members engaged in its activities. Driven by a commitment to their local communities and a sense of social responsibility, family firms actively pursue social initiatives. However, there is a recognized imperative for additional research to investigate micro-level aspects and enhance the comprehension of the Socioemotional Wealth (SEW) model. Purpose: The research aims to establish a conceptual framework for investigation of the interconnection between family firms and social initiatives. The primary objective is to explore how family values are embedded in the decision-making process concerning social initiatives within the local community. Method: An exploratory multiple case study design was employed, utilizing a qualitative approach. Data were collected through semi-structured interviews with family members actively involved in the decision-making process regarding social initiatives and their subsequent implementation. Main results: Family values guide decisions related to social initiatives within family firms, driven by centralized ownership, while the business values of firms are influenced by the values upheld by family owners. Consequently, the decision-making process is influenced by the personal interests of family members, hence the essence of fostering community togetherness. The findings underscored an informal decision-making process across various industries,wherein decisions are guided by the personal interests of family members in pursuing social initiatives within the local community.

Background: It has become increasingly important for all corporations to make environmentally friendly decisions and consider environmental CSR. Previous studies have shown that effective corporate governance and diversity of BoDs and TMTs can affect sustainability reporting positively. However, prior literature has been underrepresented regarding SMEs. It is currently voluntary for these types of firms to report on sustainability, but new requirements are underway. Additionally, family-owned firms differ in the context of environmental CSR reporting due to the interests of the family, and that these types of firms tend to not consider the diversity as much as non-family-owned firms. Purpose: The purpose of this study is to investigate how the diversity of BoDs and TMTs in Swedish stock-listed SMEs impacts environmental CSR reporting. Additionally, how family firms moderate this relationship. Methodology: This study adopts a positivistic view, follows the deductive approach, and uses a quantitative methodology. The collected data was gathered through databases, annual reports, and other sources to get information about the diversity aspects and sustainability reporting. This was analyzed by using the Spearman correlation matrix and multiple linear regressions. Findings: The findings of this study only partially support the relationship between the diversity of BoDs and environmental CSR reporting. There was no support regarding the relationship between the diversity of TMTs and environmental CSR reporting. Family firms as a moderating factor to this, could also not be supported.

We investigate the differential effect of time in terms of generation in control of the firm’s management on family firm performance to address the call in the literature for a more nuanced treatment of family firms and their performance differences. By drawing on the mixed-gamble logic of the behavioral agency model, our work suggests that the family’s socio-emotional wealth (SEW) varies across generations, resulting in complex performance relationships. We theorize and empirically find that earlier-generation family firms protect current SEW and perform increasingly worse while later-generation firms maximize prospective financial wealth and perform increasingly better. Additionally, we argue that high family control dispersion mitigates the negative effect on performance of earlier generations in control and increases the positive effect of later generations in control. Important theoretical and practical contributions emerge from this study.

Purpose: The aim of this paper is to analyse the role of communities of practice (CoP) as knowledge-sharing tools in family small and medium-sized enterprises (SMEs). In this context, CoPs that jointly involve family and non-family members are expected to act as knowledge-sharing tools. Design/methodology/approach: This paper employs a multiple case study methodology, analysing the cases of six small companies in different sectors and countries over a period of 8 years. Both primary and secondary data are used. Findings: The results show the role CoPs play in involving family and non-family members in empowering knowledge-sharing initiatives. A CoP's role in knowledge sharing depends on the presence (or lack) of a family leader, the leadership approach, the degree of cohesion around shared approaches and values within the CoP, and the presence of multiple generations at work. Originality/value: This paper contributes to the literature on knowledge sharing in family businesses, by exploring for the first time the role of the CoP as a knowledge-sharing tool, depending on families' involvement in the CoP., CC BY 4.0© 2023, Francesca Rossignoli, Andrea Lionzo, Thomas Henschel and Börje Boers.Article publication date: 10 August 2023Correspondence Address: B. Boers; School of Business, University of Skövde, Skövde, Sweden; email: borje.boers@his.se

When it comes to organizational conflict in (small) family businesses, managers’ personality has received little attention. We investigated the relationship between managers’ personality traits (Big Five) and their perceptions of task conflict and relationship conflict in two types of firms (family vs. non-family business). We collected data from 103 managers in small firms (56 family firms and 47 non-family firms) in Ecuador. Our findings show that family firms have less relationship conflict compared to non-family firms. Managers’ personality seems to play a key role in perceiving conflicts. Particularly, managers’ openness and extraversion are related to less perceived conflict. Introverted managers in non-family businesses perceive more relationship conflict than those in family businesses. Implications for theory and practice are discussed.

The authors of this study aimed to investigate the issue of resilience in family firms during times of crisis. They recognize that a crisis can impact not only the business itself but also the family dynamics within the firm. To be resilient, addressing and managing both aspects is crucial. Resilience in this context refers to the ability of family firms to adapt, recover, and thrive in the face of adversity. The authors emphasise that resilience involves navigating and responding to multiple events that may arise from various sources, including the external environment, the business operations, or the internal family dynamics. This complexity adds to the challenges and demands of family firms to be resilient. The study adopts a qualitative approach, employing case studies of German and Swedish family firms to gain deeper insights into this topic. By examining real-life examples, the authors seek to provide empirical evidence and a nuanced understanding of how family firms experience and cope with crises. The findings of this research have significant relevance for multiple stakeholders. Firstly, family business owners and leaders can benefit from insights into the challenges they may face during crises and the strategies they can employ to enhance resilience. Understanding the interplay between family and business dynamics is crucial for effective crisis management. Additionally, policymakers and advisors working with family firms can gain valuable knowledge from this study. By recognizing the unique challenges these firms face during crises, they can develop targeted support mechanisms and resources to assist them in building resilience. Overall, this research sheds light on the complex nature of crisis resilience in family firms and contributes to the existing body of knowledge in this field. It provides practical implications and recommendations for family firms, policymakers, and advisors, ultimately aiming to enhance the long-term sustainability and success of, © 2024 Springer Nature Switzerland AG. Part of Springer Nature.

Questa tesi è composta da due saggi distinti nel campo dell'economia applicata. Nonostante affrontino diverse domande di ricerca, entrambi i capitoli sono collegati tematicamente dal loro focus sulle questioni relative ai confini delle aziende. Il primo capitolo è un lavoro congiunto con la prof.ssa Maria Luisa Mancusi e il prof. Luca Viarengo. Il titolo del nostro saggio è: "Diversificazione tra e all'interno delle imprese: una prospettiva più dettagliata sulla creazione di valore nelle operazioni di fusione e acquisizione". Questo capitolo indaga l'impatto della diversificazione aziendale sui guadagni derivanti dalle acquisizioni per le imprese acquirenti coinvolte nelle operazioni di fusione e acquisizione. Facciamo ciò sfidando la classificazione convenzionale delle operazioni di fusione e acquisizione in categorie related e unrelated, basate unicamente sulla presenza o meno di settori o industrie di attività in comune tra le due imprese. Per raggiungere questo obiettivo, quantifichiamo la diversificazione utilizzando la misura di Entropia, un indice ben consolidato nella letteratura di finanza aziendale e organizzazione industriale: tale misura consente la decomposizione della diversificazione aziendale in due componenti distinte, ciascuna indicante un diverso livello di aggregazione industriale. Sfruttando queste componenti e le loro variazioni stimate derivanti dall'operazione, conduciamo un'analisi più dettagliata della relazione tra diversificazione e guadagni per le imprese acquirenti. Il nostro studio si basa su un dataset comprendente 2.577 operazioni completate tra il 1994 e il 2017. In linea con studi accademici precedenti, le nostre scoperte confermano l'esistenza di diversification discount. Tuttavia, presentiamo prove empiriche che mostrano l'eterogeneità di questo fenomeno tra diversi tipi di acquisizioni: i nostri risultati suggeriscono che una maggiore diversificazione è penalizzata solo quando l'operazione porta a un'espansione nel nume, This thesis comprises two distinct essays within the field of applied economics. Despite addressing distinct research inquiries, both chapters are thematically linked by their focus on matters pertaining to the boundaries of firms. The first chapter is a joint work with prof. Maria Luisa Mancusi and prof. Luca Viarengo. The title of our essay is: “Across and Within Diversification: a more granular perspective on value creation in M&A deals”. This chapter investigates the impact of corporate diversification on the acquisition gains of bidders engaged in M&A deals. We do so by challenging the conventional classification of M&A deals into related and unrelated categories based solely on shared industries or sectors. To achieve this objective, we quantify diversification by utilizing the Entropy measure, a well-established index in corporate finance and industrial organization literature: such measure enables the decomposition of corporate diversification into two distinct components, each denoting a different level of industrial aggregation. By leveraging these components and their estimated variations resulting from the deal, we conduct a more detailed analysis of the relationship between diversification and bidders' gains. Our study focuses on a dataset comprising 2,577 deals completed between 1994 and 2017. In line with prior scholarly works, our findings validate the existence of a diversification discount. However, we present empirical evidence showcasing the heterogeneity of this phenomenon across different types of acquisitions: our results suggest that increased diversification is penalized only when the deal leads to an expansion in the number of industries or sectors in which the bidder operates. The second chapter is a joint work with prof. Valeria Gattai. The title of our essay is: “Family Presence, Productivity and Specificity in Input Procurement: Firm-level Evidence from Italy”. This paper presents an empirical evaluation of the sourcing practices of Ita

In a fast-changing world, strategic decisions to exit a foreign market become more complex for family firms, owing to their vulnerability to uncertainty in internationalization. However, there is scant research on family firms’ foreign market exit with respect to their responses to contextual influences from home and host countries. This study reconciles the socioemotional wealth (SEW) perspective and the friction lens to address this gap. Using a sample of 1,455 subsidiaries established by 413 Chinese family firms in 2009-2018, we find that historical military friction increases family firms’ foreign market exit, while cultural friction leads to a lower exit propensity. We also find that family management reinforces the friction-exit relationships, and this effect is strengthened when the family firm is controlled by the first generation. Our theory and related findings deepen our understanding of the foreign market exit decision of family firms while offering important theoretical and managerial implications.

This study examines the role of accounting conservatism in mitigating underinvestment due to internal cash flow volatility in Taiwan-listed and OTC companies from 2013 to 2022, comparing family and non-family firms. Utilizing regression analysis, we assess how accounting conservatism influences investment decisions under varying conditions of cash flow stability. Our findings reveal that accounting conservatism significantly alleviates underinvestment across all sampled firms, particularly in family firms where its impact becomes pronounced under high cash flow volatility conditions. In contrast, conservatism does not significantly affect investment decisions in stable cash flow scenarios. Additionally, the study finds that accounting conservatism can reduce capital costs under high cash flow volatility, thereby promoting investment. These insights provide a new understanding of the function of accounting conservatism across different firm types and offer practical guidance for financial decision-making.

This systematic literature review synthesizes and maps existing research on auditing in family firms across multiple areas of study. The review includes 71 systematically selected academic articles published through to 2023. Our findings suggest that many audit-related issues, such as audit fees, audit quality, and auditor choice, differ significantly among family and nonfamily firms. Our review suggests that the positioning of the issues across different disciplines adds complexity and, to some extent, hinders the development of the field. This complexity, resulting from the intermixing of multiple concepts from different disciplines, pushes the majority of the reviewed articles toward theoretical singularity rather than a leap forward in terms of empirical relevance or theoretical plurality. By developing a field map that identifies gaps in current knowledge, our review not only suggests improvements to the status quo, but provides future research directions inspired by recent developments in family business and auditing.

Researchers have acknowledged that women leadership plays an important role in the success of organizations. However, the effects of women leadership on the financial performance of firms are mixed results. This article focuses on women ownership (i.e., critical mass and ownership percentage) as a form of leadership and family ownership as two boundary conditions that help us understand when small and medium enterprises (SMEs) benefit from women leadership. We argue that for women leadership to impact the financial performance of SMEs, women need to have a critical mass to influence outcomes and have power through ownership to influence decisions. We also argue that the effects of these relationships are affected by the context of ownership. These ideas are tested with a sample of 10,696 private SMEs from the country of Colombia. Results indicate that the women leadership enhances SME financial performance through both critical mass and a larger percentage of women ownership. However, family ownership negatively moderates the relationship between percentage of women ownership and SME financial performance. Implications of these results are discussed.

In this study, we seek to understand firm behaviour during times of crisis, with a particular focus on family firms in different contexts. We theorize that family control mitigates (i.e. negatively moderates) the relationship between economic crisis and the layoff of employees, resulting in a higher propensity of family firms to retain their employees during a crisis compared to their nonfamily counterparts. Furthermore, taking a closer look at family firms, based on their location, we argue that family firms in rural regions are more likely to adopt measures leading to involuntary job turnover than family firms in urban areas due to a higher sensitivity to the loss of socioemotional wealth following a business closure. Relying on a panel dataset of Swedish private firms active in the period 2004-2012, our study contributes to a better understanding of family firms as employers in different contexts.

Our meta-analysis investigates the environmental sustainability performance of family firms (FFs) distinguishing between environmental hand- and footprint and accounting for FF heterogeneity. Based on a sample of 87 primary studies comprising 118,538 firms, we find no significant difference between FFs and non-FFs regarding their overall environmental sustainability performance. Yet, distinguishing between environmental hand- and footprint, we show that FFs have a lower footprint than non-FFs but do not differ regarding their handprint. Firm size, being a public firm, and type of family involvement moderate the effects of FF status on environmental sustainability performance. Our research note extends prior meta-analytical evidence and contributes to a more fine-grained and nuanced understanding of the environmental sustainability performance of FFs. Theoretical and managerial implications are discussed.

This study examines the effectiveness of CEO compensation monitoring depending on the extent of family involvement in the firm. Considering the contradictory evidence on the effects of family involvement on CEO compensation reported by the literature to date, we adopt a procedural conception of CEO monitoring – that reflect processes and rules used in family firms for the alignment of CEO incentives structure to the firm interests –, to test four hypotheses derived from agency and socioemotional wealth (SEW) perspectives. Using a sample of 357 family and non-family Spanish companies, the results show that CEO compensation monitoring is inversely related to family status, and the relationship between CEO compensation monitoring and firm performance is stronger in firms where family influence is higher. In addition, we found that the presence of a family CEO negatively affects the implementation of economically instrumental monitoring mechanisms, decoupling CEO compensation from firm performance. Our research, aligned with recent socio-psychological literature on the study of processes of family firm’s management policies, thus contributes to a better understanding of the setting of CEO compensation in family firms as a result of a combination of common bonds and mutual expectations based on emotions and values with contractual and financial factors., Depto. de Organización de Empresas, Fac. de Ciencias Económicas y Empresariales, TRUE, pub

This article explores the influence of education and experience on the time to the top in family and non-family CEOs who work for Latin American family firms. In order to achieve these objectives, this study draws upon human capital theory as well as career and family firm literature. The careers of 129 CEOs of family firms who form part of the América Economía ranking were analyzed and quantitative methods were used. In Latin American family firms, family CEOs reach the top faster than their non-family counterparts. In addition, the influence of human capital variables on the way to the top differs between the two groups. For family CEOs, obtaining a graduate degree delays the way to the top, while for non-family ones, it reduces the time to the top. As regards experience, for promoted family CEOs, the greater the percentage of the career spent in the organization they lead, the shorter the time to the top. No support was found for either the influence of having worked for just one firm or having had elite graduate education abroad, in multilatina CEOs. Individual career management suggestions for future CEOs as well as specific guidelines for talent managers are proposed. This is the first study to explore the influence of human capital indicators on the time to the top in Latin American family firm CEOs., UCM-Cofares Cátedra de Investigación, European Union, Ministerio de Economía, Depto. de Organización de Empresas, Fac. de Ciencias Económicas y Empresariales, TRUE, pub

Despite the increasing relevance of environmentally friendly practices in the wine industry, which are mainly shaped by family firms, research has yet to examine in detail the internal drivers of eco-innovation in such firms. Intra-family succession as a driver of eco-innovation is an intriguing topic of study, as prior studies indicate that it may create new opportunities. Accordingly, a field study of 28 family firms was conducted to examine the internal drivers of eco-innovation in depth, with a specific focus on family firms and intra-family succession. The results revealed that intra-family succession encourages family firms to engage in eco-innovation, to different extents, in three ways: (i) becoming a facilitator in the community; (ii) fostering environmental consciousness; and (iii) developing environmental passion. Overall, this study widens the examination of internal factors influencing eco-innovation, improves the understanding of eco-innovation among family firms, and provides evidence of how to support next-generation members to develop their future orientation and consciousness about the importance of protecting natural resources and their responsibility towards stakeholders and the community.

This newly released issue of Corporate Governance and Organizational Behavior Review offers intriguing insights into the multifaceted nature of the management field. The heterogeneity of the topics included in this issue testifies to the lively conceptual dynamism and intellectual curiosity, which have become particularly intricate in the aftermath of the COVID-19 pandemic.

Theoretical framework – Based on agency theory and its derivatives, we capture the specificities of family firms relative to non-family firms. Design/methodology/approach – Drawing from an extensive and updated database of over 370 publicly listed companies in Brazil, this study conducted panel data regressions with fixed effects on three different response variables, in order to have a broader perspective and reduce the bias of the results. Moreover, we performed robustness tests with different measurement methods. In addition, we tested the selection of variables by addressing both internal and external validity criteria, in addition to convergent and nomological validity, according to the literature. Findings – The empirical results indicate that there is a relationship between board independence and short-term financial performance for a cohort of family firms. Practical & social implications of research – This research contributes to various stakeholders by providing relevant insights about an important ESG criterion, which opens up a path for further studies. Originality/value – This is a novel approach to relevant phenomena from the perspective of family firms compared to non-family firms. Also, this paper deepens the study of family businesses and considers different cohorts of firms.

[ENG ]This study investigates the behavioral patterns of Small and Medium-Sized Family Firms (SMFFs) in terms of translating intelectual capital efficiency into economic performance while considering their geographical location. The findings underscore the Paramount importance of effective intellectual capital management in driving business performance, particularly for SMFFs, drawing upon the knowledge-based perspective. In line with behavioral theory, this study also provides empirical evidence demonstrating that SMFFs located in rural areas adeptly navigate locational challenges by effectively translating their Added Value Intellectual Coefficient (VAIC) into sustainable performance, thereby outperforming their urban counterparts. This phenomenon, referred to as SMFF heterogeneity, can be attributed to their profound emotional connection and deep-rooted bonds with their local communities, intensifying their commitment to the regional milieu. Consequently, their success becomes intricately linked with the spatial context they inhabit. In this regard, this research offers significant practical and theoretical contributions to the understanding of SMFFs, shedding light on the interplay between intellectual capital, geographic location, and sustainable performance in the intricate landscape of family firms., [SPA] Este estudio investiga los patrones de comportamiento de las Pequeñas y Medianas Empresas Familiares (PYMEF) en términos de traducir la eficiencia en la gestión del capital intelectual en rendimiento económico teniendo en cuenta su ubicación geográfica. Los hallazgos subrayan la importancia de una gestión eficaz del capital intelectual para impulsar el rendimiento empresarial, en particular para las PYMEF, basándose en una perspectiva basada en el conocimiento. En línea con la teoría del comportamiento, este estudio también proporciona evidencia empírica que demuestra que las PYMEF ubicadas en áreas rurales superan hábilmente los desafíos locales al traducir su eficiencia en la gestión del capital intelectual (VAIC) en rendimiento sostenido, superando así a sus contrapartes urbanas. Este fenómeno, denominado heterogeneidad de la PYMEF, puede atribuirse a su profunda conexión emocional y los vínculos de arraigo con sus comunidades locales, intensificando su compromiso con la región. En consecuencia, su éxito queda estrechamente vinculado con el contexto espacial en el que se localiza. En este sentido, esta investigación ofrece importantes contribuciones prácticas y teóricas para la comprensión de las PYMEF, arrojando luz sobre la interacción entre el capital intelectual, la ubicación geográfica y el rendimiento.

The purpose of the study is to empirically examine the role of absorptive capacity, as a set of knowledge creation processes, in the relationship between social media and open innovation in the family firm context. In addition, the study analyses the impact of social media use as an antecedent of open innovation in the firms. The examined sample was composed by 113 responding family firms in Spain. The model was esti- mated through PLS-SEM with smartPLS software 3.3.3. Results confirm the key role played by absorptive capacity in the relationship between social media use and open innovation, proving also how social media use appears as a relevant enabler of open innovation practices. Moreover, findings support the importance of social media use for acquiring external information and knowledge which in turn can help family firms to gain more innovative opportunities. Our paper suggests that manag- ers of family firms should foster an appropriate culture of learning in their firms and provide specific training to develop the staff ability to acquire, integrate and use information captured by digital platforms. Social media has totally transformed the way firms relate to the market and provides a useful tool to collect external knowl- edge and information. These tools are used by family firms as a new form to connect and collaborate with different stakeholders, so they have the potential to enhance open innovation activities. However, empirical research on the topic remains scarce and is challenging for managers to benefit from all the potential that social media can bring in fostering innovation and to develop dynamic capacities of knowledge management in the family firm context. This work sheds light on this topic.

[Abstract]: Purpose: This paper provides empirical evidence for how gender diversity in top management teams and collaboration with university and technological centres lead to innovation outcomes. We review past research on these concepts and illustrate their individual and joint effects on process innovation specifically in the unique context of family firms. Study design/methodology/approach: We used a sample of 788 Spanish manufacturing family firms in 2016 and applied logistic regression models since the dependent variables are dummies. Findings: We found a positive relationship between gender-diverse top management teams, process innovation and R&D-based process innovation. Similarly, the collaboration with university technological centres is positively associated with higher innovation outcome of family firms. In addition, we also found that the presence of women in top management teams shapes the relationship between the collaboration with university technological centres and process innovation. Originality/value: This paper contributes to the research on collaborative innovation in family firms by emphasizing the collaboration with university technological centres, an external partner often ignored by this stream of literature. This research also responds to the calls for further study of the effect of the heterogeneity of the top management teams on the innovation outcome of family firms, from the perspective of the resource-based view of the firms.

Purpose This article aims to increase the understanding of the role of individual actors and arenas in dealing with multiple institutional logics in family firms.Design/methodology/approachThis study follows a case-study approach of two family-owned newspaper companies. Based on interviews and secondary sources, the empirical material was analysed focussing on three institutional logics, that is, family logic, management logic and journalistic logic. Findings First, the authors show how and in which arenas competing logics are balanced in family-owned newspaper companies. Second, the authors highlight that family owners are central actors in the process of balancing different institutional logics. Further, they analyse how family members can become hybrid owner-managers, meaning that they have access to all institutional logics and become central actors in the balancing process. Originality/value The authors reveal how multiple institutional logics are balanced in family firms by including formal actors and arenas as additional lenses. Therefore, owning family members, especially hybrid owner-managers, are the best-suited individual actors to balance competing logics. Hybrid owner-managers are members of the owner families who are also skilled in one or several professions., CC BY 4.0Börje Boers is the corresponding author and can be contacted at: borje.boers@his.seArticle publication date: 21 December

Research and public interest on economic inequality have grown over the last years. Family firms and the concentration of wealth and power in the hands of a few wealthy entrepreneurial families have been discussed as both a cause and a consequence of economic inequality. Yet, so far, we lack knowledge about the relationship between economic inequality and the prevalence of family firms in an economy. Our study investigates how the share of family-controlled public firms correlates with various measures of income and wealth inequality. The results show that a higher share of public family-controlled firms leads to more income inequality in a country. This effect is particularly pronounced for the middle of the income distribution as opposed to the top quantiles. Redistribution only mitigates this effect to some extent, as the effect is significant for market income and disposable income. We also find that a higher share of family-controlled firms contributes to an increase in wealth inequality. Our results are of economic relevance as, for instance, a one standard deviation change in the share of family-controlled firms leads to an increase of around 1.3–1.5 percentage points in the Gini coefficients for market income, disposable income, and wealth.

This study investigates whether family ownership influences firms’ accounting and market-based performance as measured by ROA respectively Tobin’s Q. The Swedish market is especially interesting due to its unique corporate governance system, and because previous studies based on a Swedish sample present contradictory findings on the family-performance relationship. Furthermore, we explore whether the stake, the active involvement of family members, and the presence of other blockholders, can be connected to firm performance. The results suggest that family firms are related to superior accounting performance as compared to non-family firms, and that actively involved family members are related to the positive relation. The evidence on market performance shows that families are awarded lower valuations as compared to non-family firms. The market results seem to be driven by extensive control in terms of voting rights or the combined monitoring powers of multiple blockholders, as family firms with a moderate stake of 20-50%, and firms without other blockholders, are not related to market discounts. Connecting to agency theory, the findings suggest that family ownership is related to reduced agency costs type I, thus increasing the profitability, but may be associated with higher type II costs if their control is too extensive.

Background: The current energy and inflation crisis presents a challenge for businesses in Europe. One of the countries that is especially affected by the crisis is Germany. Family firms are an important factor for the German and European economies, as they account for 65 to 80 percent of all European companies. Although family firms have been thoroughly researched, as presented by the current body of knowledge, the existing gap in the literature on family firm strategies during a crisis is significant, which is the basis for this thesis. Purpose: This study aims to investigate German family firms' strategies in times of crisis, specifically the current inflation and energy crisis, and assesses how they help achieve economic resilience. Method: This thesis represents a qualitative and inductive research approach. Twelve case studies have been conducted using an inductive method to collect data for this exploratory study. The chosen data collection method for this thesis is qualitative interviews. The empirical data is analyzed following the models by Gioia et al. (2013) and Hair et al. (2020). The existing literature serves as a basis for this research approach. Conclusion: The study concludes that this energy and inflation crisis affects family firms in Germany on different dimensions. The shock magnitude, the family capabilities, and the overall management of the family firms are key factors influencing the economic resilience of the company. The performance on each individual level leads to certain actions, such as leveraging networks, by the family firm to cope with this crisis.

Socio-Emotional Wealth in family firms and its influence on green product innovations is an important theme in general management research. The purpose of the study was to understand the link between the socio-emotional wealth of family firms and green innovation to understand how family firms in their quest to preserve their socio-emotional wealth will influence green innovation motives. The study was based on a single case study, a packaging company chosen with an innovation center for green solutions. A total of 11 interviews were conducted. The study is based on constructionism and relativism research philosophy. The findings show that there is an influence of the dimensions of the FIBER model of socio-emotional wealth on green innovation while preserving their socio-emotional wealth. Organizations can use these findings to get an understanding of green innovation, as well as that family firms, need to embrace more their uniqueness as it’s the result of their reliance on socio-emotional wealth.

Family-owned SMEs are of great importance to the economy of countries. For this reason, in recent years more and more studies on this type of company have emerged. The resources and capabilities of family SMEs are valuable and rare resources to find in other types of companies. These resources are also difficult to imitate by the competition. If family SMEs know how to take advantage of them, they can be facilitators of good performance as well as financial, non-financial, and organizational effectiveness and stakeholder satisfaction. This study is a bibliometric review of existing research on the resources and capabilities of family SMEs that has been published in the SCOPUS database. The findings shows that, despite the fact that these small and medium-sized enterprises boost economies, research on the capabilities and resources of family SMEs is still scarce, concentrated in few authors and developed from a limited number of countries, and highlights opportunities to study characteristics of image, age, board of directors and CEO, and human resource management., Las PYMEs familiares revisten de una gran importancia para las economías de los países. Por ello en los últimos años has surgido más estudios sobre este tipo de empresa. Los recursos y capacidades de las PYMEs familiares recursos son valiosos, varios de ellos son raros de encontrar en otro tipo de empresa, y además son difíciles de imitar por la competencia y que si se saben aprovechar pueden ser facilitadores de un buen desempeño, financiero, no financiero, efectividad organizacional y satisfacción de las partes interesadas. A través de una investigación bibliométrica sobre estudios publicados en la base de datos SCOPUS. Los hallazgos muestran que a pesar de que estas pequeñas y medianas empresas dinamizan las economías, aún es escasa la investigación sobre las capacidad y recursos de las PYMEs familiares, estando la producción concentrada en pocos autores y desarrollada desde un número limitado de países, y resalta oportunidades de estudiar características de la imagen, edad, consejo directivo y director ejecutivo, y los recursos humanos.

From the perspective of agency and socio-emotional theories, the family firm’s innovation behavior differs from non-family companies. We investigate the relationship between the family element and Research and Development (R&D) investment, and how the moderating effect of the board composition affects this relationship. Using a panel data composed by 1,284 observations-year during the period 2004-2014 from Argentina, Brazil, Chile and Mexico, empirical results show that family firms increase R&D investment when the moderating effect of the board composition is included. For instance, larger boards, the independence of the board, the COB-CEO duality and female directors motivates to a higher R&D and capital expenditures. These results confirm that board composition constitutes a monitoring mechanism of family members' actions, which leads to an increase of innovation strategies and suggest that family firms promote a long-term orientation with the purpose of preserving the wealth for next generations. This research contributes to the international literature analyzing a region not explored before and characterized by a weak institutional framework and lower rates on R&D investment compared to other emerging countries., Desde la perspectiva de las teorías de la agencia y socio-emocional, el comportamiento innovador de la empresa familiar difiere del de las empresas no familiares. Se investiga la relación entre el elemento familiar y la inversión en investigación y desarrollo (I+D), y cómo el efecto moderador de la composición del consejo incide en esta relación. Se utiliza un panel de datos conformado por 1,284 observaciones-año durante el periodo 2004-2014 para Argentina, Brasil, Chile y México. Los resultados econométricos muestran que las empresas familiares incrementan la inversión en I+D cuando se incluye el efecto moderador de la composición del consejo. Por ejemplo, consejos de mayor tamaño, la independencia del consejo, la dualidad COB-CEO y la presencia de mujeres en el consejo motivan a una mayor inversión en I+D y gastos de capital. Los resultados confirman que la composición del consejo constituye un mecanismo supervisor de las acciones de los miembros de la familia, lo que motiva a un incremento en la adopción de estrategias de innovación, y sugiere que las empresas familiares promueven una orientación de largo plazo con el fin de preservar la riqueza para las próximas generaciones. Esta investigación contribuye a la literatura internacional estudiando una región no explorada en la literatura previa y caracterizada por un marco institucional débil y menores tasas de inversión en I+D en comparación con otros países emergentes.

Purpose – This study aims to analyze how different types of organizational culture influence the implementation of performance-based compensation policies in family-owned micro, small and medium-sized enterprises (MSMEs) and whether the presence of the owning family in the management of the firm moderates this relationship. Theoretical framework – Cameron and Quinn’s (2011) typology of organizational culture and empirical evidence in the family business field were used to explain the relationship between organizational culture and performance-based compensation policies. Design/methodology/approach – Hypotheses were statistically tested using a multiple hierarchical regression analysis with a cross-sectional sample of 315 family MSMEs located in three main cities in Colombia. Findings – The results obtained suggest that there is no single cultural path for implementing a performance-based compensation policy in family MSMEs, even when the presence of family members in managerial positions moderates this relationship. The clan, adhocratic, and market cultures favor using a performance-based compensation policy in family-owned MSMEs. Practical & social implications of research – Our results present organizational culture as a key driver of compensation. Researchers, managers, and consultants should consider the characteristics of the organizational culture before suggesting implementing performance-based compensation policies in family firms. Originality/value – This work contributes to the literature on human resources and family businesses by extending the existing knowledge on the relationship between organizational culture and compensation policies related to performance in family MSMEs. Furthermore, it offers empirical evidence in the Latin American context of a relationship treated mainly from a conceptual approach and in the eastern context and developed countries

The role of organizational resilience enabling firms to respond to adversity and survive has become ever more critical in the wake of an increasingly unpredictable external environment. Yet, while we understand the importance of resilience in responding to a major adversity, we have little appreciation for how firms are affected and react when facing multiple adversities over time, or how multilevel factors might impose on this process. These are crucial issues given that adversities are not necessarily single, isolated, or infrequent episodes. By studying a long-established family firm in the United Kingdom that experienced four major adversities, we identify the process that enabled it not only to survive but also to thrive. In this qualitative study, we introduce the notion of organizational fortitude to describe the approach that a firm develops to cope with the challenges of multiple unexpected adversities and highlight how multilevel factors combine to foster organizational fortitude.

Building on agency and resource-based view theories, this study investigates the level of environmental disclosure (ED) practices of family versus non-family firms and explores the moderating role of board gender diversity. We test our hypotheses on a 3-year (2018–2020) panel data sample comprising 324 observations of Italian small- and medium-sized enterprises traded on the Euronext Growth Milan. Findings show that, compared to non-family firms, companies with a family firm status are characterized by lower levels of ED. Gender diversity on the board, however, moderates this relationship, reducing this gap, to the extent that the family firm status is associated with higher ED when the number of women directors is high enough to constitute a critical mass. We consequently contribute to the studies on family business, corporate governance, and corporate social responsibility.

A family’s involvement and ownership of a firm separates family firms from both public companies and other private firms. It is widely accepted that family firms have unique characteristics, with implications for their behavior and an impact on their internationalization. Extant research presents a need for studies on the heterogeneity observed in family firm internationalization, and has presented non-human heritage assets as one concept which may help explain this heterogeneity. These assets are non-human resources which hold a special meaning and connection to the family. However, this concept has not been empirically investigated, and remains in the theoretical domain. The aim of this paper is to develop an initial understanding of non-human heritage assets: how such assets present themselves in family firms and how they constrain or facilitate family firms’ internationalization decisions. The internationalization decisions studied in this paper are location choice and operation mode choice. To understand if non-human heritage assets facilitate or constrain the decision-making process in these two areas, this paper conducts qualitative semi-structured interviews with seven Swedish family firms. The results identified four non-human heritage assets in these firms: reputation, founding location, networks and family culture. The family firm’s networks and reputation both had a facilitating effect on specific location and operation mode choices. The founding location had a constraining effect on some operation mode choices. The family culture was not found to have either a facilitating or constraining effect on either choice. Keywords: family firms, internationalization, heritage assets, location choice, operation mode choice, bifurcation bias.

PurposeThe aim of this paper is to analyse the role of communities of practice (CoP) as knowledge-sharing tools in family small and medium-sized enterprises (SMEs). In this context, CoPs that jointly involve family and non-family members are expected to act as knowledge-sharing tools.Design/methodology/approachThis paper employs a multiple case study methodology, analysing the cases of six small companies in different sectors and countries over a period of 8 years. Both primary and secondary data are used.FindingsThe results show the role CoPs play in involving family and non-family members in empowering knowledge-sharing initiatives. A CoP's role in knowledge sharing depends on the presence (or lack) of a family leader, the leadership approach, the degree of cohesion around shared approaches and values within the CoP, and the presence of multiple generations at work.Originality/valueThis paper contributes to the literature on knowledge sharing in family businesses, by exploring for the first time the role of the CoP as a knowledge-sharing tool, depending on families' involvement in the CoP.

This study focuses on the financing choices of family firms under the umbrella of Socioemotional wealth. It investigates how a family firm makes its financing policy based on persuasion of a non-financial goal which is the need to maintain family control over the business. In the context of non-financial Pakistani listed firms in the Pakistan Stock Exchange, with data range starts from 2009 to 2020. Our results show that family firms with a high need to maintain their family control over the business have high debt levels. Similarly having family representation on the board shows a positive relationship with debt financing. We also conclude that having a family CEO is also linked with the use of extensive debt. Our findings are consistent with the view that Socioemotional wealth is an important determinant of making important financial decisions.

This PhD research investigated the impact of family firms as a unique type of ownership group with a significant impact on a firm’s strategic behavior, which differs from non-family firms. Family firms consider non-financial goals in addition to financial objectives when making strategic decisions. Such non-financial objectives include, for example, reputation, relationships, and dynastic succession, while non-family firms prioritize profit maximization. This preference for non-financial goals is often considered irrational from a purely economic perspective, making traditional economic models ineffective at predicting family firm behavior. The research provides empirical evidence showing differences in innovation outputs, innovation inputs, and a firm's corporate social performance that are linked to the influence of family ownership. In the first study, the impact of institutional investors on family firm innovation output is examined, specifically in public family firms. The second study focuses on private family firms and investigates the relationship between family ownership and innovation input. In the last study, a new theoretical model is proposed for family firms that considers the impact of family ownership on corporate social performance.

Los objetivos de nuestro trabajo son, en primer lugar, señalar las características de la empresa familiar, del familiness, que la convierten en un tipo de organización especialmente confiable y reputada. En segundo lugar, planteamos la interrelación reputacional entre productos y servicios y la empresa familiar, así como entre la reputación de la familia y la reputación de la empresa. Por último tratamos la relación entre el nombre patronímico de la empresa familiar al servicio de la gestión de la empresa. Como conclusión, cabe indicar que, según la literatura existente, el nombre patronímico en la empresa familiar, y usado en sus produtos y servicios, proporciona beneficios a la organización, tanto en términos comerciales, como corporativos., The objectives of our work are to point out the characteristics of the family business, of familiness, which make it a particularly trustworthy and reputable organisation. We will discuss the reputational interrelationship between products and services and the family business, as well as between the reputation of the family and the reputation of the company. Finally, we address the relationship between the patronymic name of the family business in the service of the company's management. In conclusion, it should be noted that, according to the existing literature, the patronymic name in the family business and in its products provides benefits to the organisation, both commercially and in terms of management or corporate.

Purpose: This paper aims to explore the impact of brand authenticity dimensions (i.e. aesthetic, symbolism, heritage, originality, quality commitment and virtue) on consumer engagement in the context of social media. This study answers to the need of scholars to understand consumer behaviour towards family and non-family firms’ brand authenticity constructs and for practitioners to find the correct levers to increase consumer engagement. Design/methodology/approach: Top 10 European family firms with a retrievable Facebook (FB) page from the Global Family Business Index have been selected. Then, the study analysed family firms’ social media consumer engagement versus their non-family business direct competitors on a sample of 21.664 FB posts over a four-year period, leveraging multi-group analysis. Findings: The results outline that three out of six brand authenticity dimensions posted on FB are statistically arousing more interactions respect to non-authenticity-related contents when posted by family firms. However, there are no statistically significant findings when brand authenticity content is posted by the non-family competitors. Practical implications: This research is helpful for practitioners and entrepreneurs who might want to strengthen their social media brand strategies. With this regard, the study provides insights on which elements of brand authenticity are perceived by consumers as more engaging and which levers to use when communicating the familiness of the company. Originality/value: To the best of authors’ knowledge, this is one of the earliest studies crosscutting the family business and brand authenticity literature streams to conduct an empirical analysis based on official FB data with a data set of over 20,000 observations. Moreover, this study assesses that not every dimension of the brand authenticity construct is relevant in the context of social media and that its effectiveness depends on the firms’ familiness.

Nepotism, altruism, lower managerial abilities, and a small pool of qualified family candidates may speak against family management. However, a large share of family-owned firms is run by family managers. Our study develops a theoretical model that provides an explanation for this paradox, linked to the multitasking problem of managing economic and non-economic tasks in family firms. Comparing the performance of family and non-family managers under moral hazard and imperfect performance measurement, we find that incentive pay leads to an effort distortion towards economic outcomes for both manager types, however less so for family managers. This effort distortion is less pronounced when economic and non-economic management tasks are complements. We show that family managers with excellent skills regarding non-economic goals of the owner family often outperform non-family managers even if they have poor skills in economic tasks or, what is more, if they have lower average abilities altogether. We further show that the interdependence between economic and non-economic goals in the manager’s job tends to have a moderating effect on the family manager’s relative performance. Our study contributes to the literature about family management and agency costs in family firms and has practical implications for family firms’ hiring decisions. By highlighting the importance of non-economic goals, it moreover adds to the current discussion about the compliance with firms’ sustainability goals.