Family Decision Makers in FBs, Their Growth Intentions and Actual Firm Growth: The Influence of Different Levels of Family and Personal Involvement in the Firm

Abstract

Despite the advances made in the previous chapters of this work, additional research is needed to better understand the variability in firm growth among FBs. Building on the insights generated by the preceding empirical investigation, this final study explicitly focuses on the highly influential group of family members that hold a position in the firm’s management and/or supervisory board, and their motivational differences concerning the organization’s growth. Specifically, it aims to examine how the varying level of family involvement inherent in a particular family firm (i.e., the FB’s heterogeneity), influences the immediate determinants of family decision makers’ growth intentions, and hence causes the firm’s growth performance to tend in a certain direction. The impact of the two heterogeneity factors that have been chosen to represent the owner-family’s involvement (i.e., the family’s respective degree of power via their extent of ownership, management and governance involvement, and the FB’s generational stage), and the one heterogeneity factor that was selected to represent the family decision maker’s personal level of involvement (i.e., his personal share holdings in the FB), was empirically tested on a sample of 352 family decision makers in German FBs. For this purpose, the empirical framework developed in chapter 4, was slightly modified concerning its independent variable components. Overall, the results indicate that the FB’s heterogeneity emerging from the respective extent and mode of family involvement in the firm has a significant impact on its growth performance. In line with the preceding theoretical elaborations and empirical findings of this dissertation, this influence was confirmed to be of an indirect nature, transmitted via the decision maker’s growth intentions and their immediate determinants. While the influence is negative for both of the owner-family involvement components, it is positive for the personal involvement component. In total, the present findings imply that the summed impact of family involvement on family decision makers’ growth intentions, and hence the family firm’s actual growth performance, is predominantly negative. Implications of these outcomes and avenues for future research are discussed.