Do Problems in Project Teams Explain the Influence of Family Involvement on Project Management Activities? A Family-Firm Perspective

  • Joanna Sadkowska
Conference paper
Part of the Eurasian Studies in Business and Economics book series (EBES, volume 9)


In the extant literature, there have been calls for researchers to deeply study the reasons why many projects still fail regardless of employment of reliable project management tools and techniques. Despite the numerous studies dedicated to the role of a project team in the overall success of a project, a relatively small number of papers have been dedicated to exploring the study area of the relationship between project teams and family involvement. The primary objective of this paper is to investigate whether the problems in project teams explain the influence of family involvement on project management activities, as based on the researched enterprises. Using binary logistic regression, Polish family businesses were surveyed. The results of the study indicate that the problems within the work of project teams are a significant factor in modelling the chance that companies will manage projects. This relationship might be additionally intensified by family involvement.


Project management Problems in project teams Family businesses Family involvement 

1 Introduction

Family owned companies have been confirmed to be a very heterogeneous group, with different levels of family approach and family involvement (Berrone et al. 2012). In the literature on the subject there are numerous works dedicated to different areas of functioning and business operations of these entities, such as: the dynamics within the owning family (Olson et al. 2003), the role of the founders (Olson et al. 2003), the agency costs of family firms (Dyer 2006), the succession processes (Berrone et al. 2012).

Despite the aforementioned numerous valuable studies on this group of businesses, the fact that the phenomenon of family-founded and family-managed firms has not been fully recognized still causes significant research gaps worth further studying. The research field of project management is one of such study areas. When conducting an analysis of the studies dedicated to the key challenges and difficulties in the field of project management, it can be observed that a significant amount of attention has been paid to the risks generated externally, which influence a project’s final result in terms of its success or failure. These external factors are of high significance, however, similar amount of attention should be paid to the risks generated internally.

This paper is a response to the call by Shenhar and Dvir (2008), who underline the fact that, since project fails and delays are too common to be ignored, it is crucial to study the factors increasing the probability of success in project management, as viewed from a family perspective. The second call, by Barber (2005), is to research and understand the risks that are internally generated in projects. This paper attempts to study the phenomenon of whether and to what extent the problems in project teams explain the influence of family involvement on project management activities in terms of risks generated by the project teams. The results of the investigation provide a deeper understanding, for family firm owners and managers, of how the problems in project teams explain the influence of family involvement on project management activities.

2 Literature Review

2.1 The Role of Family Involvement in the Family Firms’ Approach Towards the Business Environment

There is a common consensus among the researchers that family firms provide a basis for economic growth and development worldwide (Zahra et al. 2008). These entities build their competitive advantage on two pillars. The first one is the uniqueness of family owned businesses resulting from the role of family, family involvement, long-term ownership, succession processes and socioemotional wealth (Cennamo et al. 2012; Więcek-Janka et al. 2016). The second pillar ‘building’ the competitive advantage refers to the behaviours of family firms, including their entrepreneurial attitudes (Short et al. 2009), risk taking approaches (Zahra 2005) and strategic flexibility (Zahra et al. 2008; compare also: Fabińska 2016; Ratalewska 2016).

A crucial factor determining the opportunities for family firms’ successful long-term development is their approach towards and, as a consequence, their management of the challenges that arise from the environment. Barringer and Bluedorn (1999), for example, defined the degree to which a firm reacts to the opportunities and the threats created by its competitive environment as ‘strategic flexibility’. In their study, the above cited authors examined the relationship between the intensity of corporate entrepreneurship and the management strategies, confirming a positive relationship between the intensity of entrepreneurship, the scanning intensity and the planning flexibility (Barringer and Bluedorn 1999).

The family-involvement factor, which is responsible for the uniqueness of these firms, has been found to have both positive and negative impact on how family enterprises tackle the difficulties created by their environment. Olson et al. (2003), for example, emphasized the importance of the families’ contribution to these business entities. The increased achievements of the businesses and the families were positively associated with such factors as: the firm’s assets, the family firm’s age, or the number of the hours the owner dedicated to the firm (Olson et al. 2003). Similarly, the family firms which employed the owner’s relatives were more successful than these which did not (Olson et al. 2003). The above examples confirm the crucial role of the families in building and in supporting the strategies for long-term development as well as the position of the surveyed business entities. On the other hand, the conflicts among family members regarding how a given family firm should be managed might sometimes cause these companies to be poor performers (Dyer 2006; Faccio et al. 2001).

Family involvement, moreover, does have significant impact on how the surveyed businesses build relationships with their environment. Dyer (2006) in his studies found that family firms have unique strengths in the area of building relationships with the business environment, in terms of creating the social capital. This phenomenon might be, to a high extent, explained by the fact that stakeholders might prefer talking to the members of the owning family rather than to the employees (Dyer 2006). This finding emphasizes the role of trust in the process of establishing and then managing the relationships with a given firm’s environment. It also underlines the importance of the families functioning as ‘a key factor’, by having high potential for building these firms’ competitive, long-term positions. Family firms were also found to be in a more favourable situation when it comes to attracting the key-stakeholders, for example the customers, which results from the ‘family-name brand’ (Dyer 2006). While analysing how family-owned businesses build relationships with their environment, it is also worth emphasising that family-owned firms have been confirmed to cultivate the relationships with societal stakeholders (Zellweger and Nason 2008). Zellweger and Nason (2008) also revealed that these business entities have an inclination to satisfy multiple stakeholders. Another interesting finding in the above cited studies was that if family firms were likely to satisfy multiple stakeholders, they also tended to measure their success by how well they satisfied them. Because of the fact that majority of family owned business tend to take very good care of particular stakeholder groups, they can expect these groups to have a more positive approach towards them. This phenomenon was confirmed in the studies by Hauswald and Hack (2013), who investigated how family control/influence affected the stakeholders’ perceptions of benevolence. The authors found that a growing family control/influence increased the likelihood of a firm behaving benevolently towards its stakeholders (Hauswald and Hack 2013). Some researchers however underlined the fact that managers pay attention to different ‘parts of the environment’ (Hambrick and Finkelstein 1987). As a result, by paying more attention to some occurrences and less to the others, they might overlook important incidents and not manage the risks properly. In the light of the above, it is crucial to study the managers’ approach towards the firms’ environments and, consequently, to study how a given firm tackles the risks generated by its environment.

2.2 The Problems in Project Teams and Their Influence on Project Management Activities

According to Zahra (2005), the matter of how family firms approach the problem of taking entrepreneurial risk and how they deal with its complexity is the key challenge those firms face. Since risk is a multifaceted phenomenon, managers have to pay attention to the different ways risk is manifested in company business activities (Zahra 2005). One of the key risks for family owned companies is the project management risk.

Every project defined as ‘a temporary endeavour which is undertaken to create a unique product, service or result’ (PMI 2008, p. 5) is influenced by a number of elements. This set of heterogeneous factors, which result from both the specificity of a given business’s internal organization as well as from the influence of its environment, creates several risks. In the case of family firms, the studied processes are additionally influenced by such elements and values which are distinctive only for family-founded and family-owned businesses. For example, Dyer (1986) and Sorenson (2000) found that the business outcomes of family firms are impacted by culture, along with the leadership styles, employee satisfaction and commitment, as well as by the interplay between the owners and the managers. Although this interrelation is seen, first of all, as a factor influencing what the people in family companies perceive as the organizational culture (Bjursell 2011), this relationship might also influence the way project management is performed in those entities.

Project risk has been widely studied in literature for the past decades. In the literature on the subject, there is a common consensus that risk management is crucial for ensuring project success (Yim et al. 2014). In their studies, the authors have emphasized different areas of project management, in terms of the risks they created for the projects. Among the most important project risks, the following were identified: creeping user requirements, pressure of the excessive schedule, low quality, cost overruns, inadequate configuration control together with inadequate user documentation, lower satisfaction of the user, harmful competitive actions, excessive time of project delivery to the market and litigation expenses (Wiegers 1998). Furthermore, the studies confirmed that project risks can vary depending on the type of the projects, for example: strategic, operational and compliance projects (Yim et al. 2014). Similarly, numerous project risks have been found to have an organisational nature and to originate from the influence of the project stakeholders and from their resistance (Vrhovec et al. 2015).

What is crucial, however, is the fact that in majority of scientific investigations, risk has been linked, first of all, to the factors and the phenomena taking place in a firm’s external environment. Barber (2005), for example, emphasizes the fact that there is a limited number of works dedicated to the internally generated risks, which are defined as those risks that have their origin in the project organization and which arise from the rules, the processes, the structures, the actions, the decisions and the culture. Taking the above definition into consideration, it is clear that a project team and project organization should be regarded as the important sources of internal project risks.

In the extant literature, project teams have been deeply investigated, but mainly in terms of the role they play in building the projects’ final outcomes. Project teamwork has been widely acknowledged as one of the major factors of project success (Scott-Young and Samson 2008). Project teams have been studied from the perspective of how they influence the three project outcomes: the schedule, the cost, the operability (Scott-Young and Samson 2008). The researchers cited above found a strong relationship between project cost effectiveness and such factors as: the project-team structure, team efficacy, using virtual offices and building cross-functional project teams. Other studies confirmed the role of trust and its significant influence on the project performance (Fung 2014). When the level of project-team trust was high, team satisfaction, team effectiveness, team cohesion and project performance improved.

The role of project teams has also been emphasized in project management methodologies, but not in terms of generating risks. For instance, the International Project Management Association underlines that competent project teams, which are able to carry out their work and to be responsible for that work, are crucial for organization of a project (International Project Management Association 2006, p. 2), but does not link the work in project teams with potential project risks. Similarly, PMI (2013) examines the management of project risks from the perspective of the stages in the risk management process, where risk is defined as having its origins in uncertainty. Furthermore, in the proposed Risk Breakdown Structure, risks have been categorized into: technical, external, organizational and those related to project management processes (PMI 2008, 2013). In relation to the organizational risks, category or resource-related risks has been identified, but no particular attention was paid to the role of project teams in this context.

The aforementioned approach has resulted in a situation, where insufficient amount of attention is paid to the risks that can be created inside the project structures, with the risk generated by project teams being one of them. Although the fact that effective teamwork is vital for the final project outcome has been widely acknowledged, a gap concerning the role of project-team risk and its influence on the difficulties in managing projects still remains. Project teams have been studied in the context of taking rather than generating risks. Susser (2012), for example, found that the projects characterized by a very broad scope can generate risks for the project teams. The project-team member’s limited experience or an insufficient number of dedicated members as well as the lack of experience have been found to have negative impact on the project management processes, including following a project schedule (Susser 2012). Another problem is the lack of integration between the members of a project team and the client/s they are working for.

An interesting study has been conducted by Reed and Knight (2010), who studied the impact of a virtual project-team environment on the project risks related to communication. The findings confirmed that when the members of a project team worked in more than one location, it did not increase the communication-related risk, compared to working in a traditionally organized project team (Reed and Knight 2010). On the contrary, in case of virtual teams, the risk of knowledge transfer increased. The risk of implicit knowledge transfer has been identified as an important factor of project-team risk (Wallace 1999). Similarly, it has been indicated that the risk of project teamwork might originate from the high challenges related to team communication and coordination (Wallace and Neil 2004). An additional factor increasing this relationship was the number of the organizations involved: more than two. According to Barber (2005), the risks generated internally result from the way the project and the organization operate as well as from the way they are set up. These risks are related to insufficiently effective work of the project team members, the financial constraints that the projected team has to deal with, the lack of or insufficient support from the top management (Barber 2005).

3 The Study Objectives

The primary objective of this paper is to investigate whether problems in project teams explain the influence of family involvement on project management activities, as based on the examined enterprises. The paper formulates three research questions:
  1. 1.

    Which problems within project teams have the highest influence on project management activities, from the perspective of the surveyed family-owned enterprises?

  2. 2.

    Does family involvement influence the problems that project teams encounter in their work?

  3. 3.

    To what extent do the problems in project teams explain the influence of family involvement on project management activities?

The framework of the study has been depicted in Fig. 1.
Fig. 1

Research model—the main assumptions. Source: Own elaboration

4 Materials and Methods

For the purpose of the study, the data was collected from the family owned businesses operating in Poland. Such research sample allows a reflection and specification of family firms, in terms of the economic and the social contexts involving Eastern-European emerging economies, a reliable example of which is Poland. The selection process for the family firms was designed as a two-stage process. First, a definition of a family owned enterprise which applies the criterion of ownership and management proposed by, inter alia, Olson et al. (2003) and Miller et al. (2007) was used. Second, the respondents from the surveyed firms had to confirm that they perceived their companies as family-owned businesses. Ultimately, 154 family entities were included in the study.

In order to fully reflect the specificity of this study, the methods were designed twofold. In the first part—the theoretical one—structured literature review was used (Armitage and Keeble-Allen 2008). The empirical part of the research used an online survey designed to study the described phenomenon. Further on, in the process of the analyses, binary logistic regression was employed.

Following the terminology proposed by Hayes (2013), the variables in the proposed research model were categorized into three groups (Hayes and Preacher 2014; Hayes and Scharkow 2013; Preacher and Hayes 2008):
  • the exogenous variables, which are not explained in the model: family involvement;

  • the endogenous variables, as the outcome variable: project management activities;

  • the mediators, which explain the mechanism of the relationship between the exogenous and the endogenous variables: the problems within the work of a project team.

Two indicators were built to capture the phenomenon of family involvement in the examined family businesses.
  1. 1.

    The generation managing the firm: 1st, 2nd, 3rd, 1st and 2nd, 3rd and 4th;

  2. 2.

    The number of the family members involved in the firm’s business activities: fewer than 3, 3–5, 6–10, more than 10.

The problems within the work of project teams, in the context of their influence on project management activities, have been described using the following eight measures:
  1. 1.

    communication problems;

  2. 2.

    incorrect alignment of the team members;

  3. 3.

    lack of engagement;

  4. 4.

    conflicts within the project team;

  5. 5.

    not understanding the project objective;

  6. 6.

    poorly-fitted team roles;

  7. 7.

    external interference into the project work;

  8. 8.

    lack of or unclear leadership.


Project management activities were represented by the fact whether the researched companies managed any projects at the time of the survey or not. A five-item Likert-like scale was employed, ranging from: 1—signifying no influence to 5—signifying very significant influence. The data obtained from the surveyed family enterprises was tested for reliability. The Cronbach’s Alpha of 0.921 suggested that reliability was characterized by a relatively high level of internal consistency. The factor analysis carried out using the principal components method revealed that one factor explains 65.12% of the variance in the eight measures of the problems within to the work of project teams. It suggests that the mediator variable is comprehensive.

The study was conducted among 154 family-owned enterprises. The examined family companies had manufacturing, service and trade profiles, with employment levels ranging from 1 employee to more than 250 workers. They conducted their business activities in different sectors determined by the Polish Classification of Economic Activity (Polska Klasyfikacja Dzialalności Gospodarczej). Majority of the examined firms represented the construction sector, wholesale/retail trade and repair of motor vehicles and motorcycles, as well the sector of other service activities. In terms of the organisational and legal form, majority of the examined firms functioned as a business activity via self-employment. Similarly, the examined companies were located in villages as well as in towns and cities, which had varying numbers of citizens. The range of the business activities also varied. Most of the investigated firms operated locally or regionally, however there also were enterprises with a domestic and global range of activities. The entities analysed were, in most cases, managed by the first generation, then by the second generation of the owners. In consequence, in majority of those firms, the number of the family members engaged in business activities did not exceed three persons.

5 The Results

In order to verify the research problem defined in the previous section of the paper, a mediation model (Westfall et al. 2014) was tested in a three-step regression procedure. The first step refers to the relationship between the exogenous and the endogenous variables. The second step refers to the relationship between the mediator and the endogenous variables, while the third step covers the interrelation between the exogenous variables and the endogenous variables with the project-team problems as the mediator. The results are presented in Table 1.
Table 1

Summary of the regression coefficients in the mediation model

N = 154




Step 1: The influence of family involvement on project management activities, R2 = 0.004

The generation managing the company




The number of family members involved in the firm’s business activities




Step 2: The influence of the problems within the work of the project team on project management activities, R2 = 0.115

Communication problems




Incorrect alignment of the team members




Lack of engagement




Conflicts in the project team




Not understanding the project objective




Poorly-fitted team roles




External interference into the project work




Lack of, or unclear leadership




Step 3: The influence of family involvement on project management activities—controlling the problems within the work of the project team, R2 = 0.107

The generation managing the company




The number of family members involved in the firm’s business activities




Communication problems




Incorrect alignment of the team members




Lack of engagement




Conflicts in the project team




Not understanding the project objective




Poorly-fitted team roles




External interference into the project work




Lack of or unclear leadership




Source: Own elaboration and calculations

*Statistically significant at p < 0.1 (2-tailed)

**Statistically significant at p < 0.05 (2-tailed)

***Statistically significant at p < 0.01 (2-tailed)

The results of the binary logistic regression indicate that there is no direct relationship between family involvement, measured by the number of the engaged family members [b = 0.1333; p = 0.585; exp (b) = 1.143] and the generation managing the company [b = 0.095; p = 0.70; exp (b) = 1.1], and the project management activities. However, both factors facilitate current project management activities in the examined firms, therefore their influence is not significant [R2 = 0.004; χ2 (df = 2) = 0.582; p = 0.747].

In reference to the relationship between the influence of the problems within the work of project teams and the project management activities, only two variables turned out to be of significance for explaining the studied phenomenon. The more significant the problem associated with not understanding the project objective by the members of the project team, the lesser the chance that the examined companies managed projects at the time of the survey [b = −0.638; p = 0.044; exp (b) = 0.984]. It means that ‘each level’ of the problems perceived in a given project team refers to 1.6% of a decrease in the chance that a given company is currently managing projects [R2 = 0.115; χ2 (df = 8) = 11.550; p = 0.172]. Similarly, poorly-fitted team roles turned out to be a factor marginally significant in terms of its influence on project management activities [b = 0.679; p = 0.060; exp (b) = 1.971].

Furthermore, while investigating how project-team problems explain the relations connected to the influence of family involvement on project management activities, the regression revealed an insignificant relationship between family involvement and the studied phenomenon. However, three project team problems turned out to be of significance: the poorly-fitted team roles [b = 0.749; p = 0.040; exp (b) = 2.116], not understanding the project objective on the part of the project team [b = −0.665; p = 0.040; exp (b) = 0.514], the lack of alignment among the team members [b = −0.867; p = 0.075; exp (b) = 0.42]. It means that a lack of clarity in terms of the project objectives and a lack of project team alignment both decrease the chance that a company manages projects. On the contrary, the factor of poorly-fitted team roles might increase the chance that a given firm employs project management practices.

6 Discussion and Conclusion

The results of this study indicate that family involvement is not directly related and does not explain the chance that a particular family-owned company will employ project management activities. This might suggest that a decision to organize work in a form of projects and thus to employ project management is driven by other factors related to such business characteristics of these entities as the range of business activities (Sadkowska 2016).

Furthermore, the analyses revealed that an increase related to the problem of not understanding the project objective on the part of the members of a project team decreased the chance of managing projects by the examined companies at the time of the survey. This phenomenon emphasizes the importance of having clarity regarding the project objective. At the same time, it should be underlined that the project objective should be well understood by all project members and other project stakeholders. It is also important for the project objective to be, firstly, properly understood and, secondly, to be comprehended in the same way by all project priority stakeholders (Andersen 2015). It also turns attention towards the communication problems in a relationship to the role of a leader who is able to control the way a given project ‘reaches its objective’ and who, at the same time, is able to increase the probability of project success.

The analysis also revealed an interesting phenomenon in terms of the relationship between incorrect alignment of the team members and the project management activities. This phenomenon is the second argument involving identification of the problems in communication. Team members who are not well aligned might encounter difficulties in communicating with one another. Ultimately, this might result in a decrease in the intensity of project management activities. This relationship is additionally intensified by a growing family involvement. Although it is marginally significant, it might suggest that mixing the roles of the family members and the team members results in the problems associated with proper alignment in the work place. This can also increase the risk of nepotism in family-owned and family-managed enterprises (Block et al. 2013; Pérez-González 2006; Schulze et al. 2003).

The most surprising phenomenon revealed in this study is the fact that the factor of poorly-fitted team roles increases the chance of a given company employing project management activities, especially in the context of family involvement. It suggests that project participation ‘triggers’ problems within a project team, especially in terms of the scope of the duties and the competences particular project team members have. As long as a particular company does not employ project management practices, certain problems might be hidden. It might also suggest that this special aspect of project-team functioning is related to engagement in the projects in a two-way relationship. It might also be the reason why companies might resist employing project management activities. At the same time, the problem of poorly-fitted team roles might result from experience in managing projects, which in turn results in proper adjusting of the roles to particular members.

Beck et al. (2005) emphasize that there is a need for better understanding of the behaviour of small and medium companies, as these business entities have very significant impact on national and regional economies. The above statement is particularly adequate in the case of family firms, most of which are small and medium firms, which, in turn, constitute the majority of the enterprises in every country. Similarly, due to a growth in the number of the businesses which perform their activities using projects, it is highly important to understand how the problems associated with project teams and family involvement affect project management and the final project results.

7 Limitations and Directions for Future Research

This study is the initial step in investigating whether the problems within project teams explain the influence that involvement of families has on the project management practices undertaken in family business entities. Since this is the first step and much scientific work remains to be done, the results of this study should be interpreted with caution. Furthermore, this exploratory study covered the family owned enterprises located in Poland, being the representatives of an emerging economy. Although Poland is a reliable representative reflecting the specificity of growing Eastern European economies, the results obtained should be generalized to other geographical settings in Eastern Europe with much caution. Likewise, the survey was conducted using an e-mail survey, which also might be regarded as a constraint. In the forthcoming studies, additional qualitative research methods will be employed to support reliability of the investigations.

The results of the study underline the significance of the problems that project teams encounter in their work, in the context of its influence on project management practices in family owned companies. Understanding and identifying this phenomenon enables family firm managers and owners to make decisions which would increase the probability of success in the field of project management.


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Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Business Economics Department, Faculty of ManagementUniversity of GdanskSopotPoland

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