Academic journal article Entrepreneurship: Theory and Practice

Parent-Child Relationships: Planting the Seeds of Deviant Behavior in the Family Firm

Academic journal article Entrepreneurship: Theory and Practice

Parent-Child Relationships: Planting the Seeds of Deviant Behavior in the Family Firm

Article excerpt

We posit that parent-child relationships lead to subsequent leader-member exchange (LMX) differentiation in family firms. This differentiation shapes a child's behavior toward the firm. Altruism is proposed to further increase the effects of LMX differentiation on workplace behavior by fostering feelings of entitlement or rebellion among out-group children and strengthening in-group children's commitment to the firm. Our article breaks new ground by explaining how parent-child relationships and LMX can result in deviant behavior in family firms, how parental altruism can create vicious and virtuous circles of behavior and how stewardship and opportunism can occur within the same family firm.

Introduction

Family firms are unique in that their leaders aim to create a legacy for their children whereby the next generation will eventually gain control of the firm and inherit the family's wealth (Miller, Steier & Le Breton-Miller, 2003). In turn, family business owners face the challenge of bringing children into the firm as employees, defining their roles, and eventually preparing for succession. Yet, these leaders often find it difficult to successfully integrate their children into the business (Gersick, Davis, Hampton, & Lansberg, 1997). Whereas a stewardship perspective suggests that children contribute to the family firm through pro-organizational behaviors (e.g., Eddleston & Kellermanns, 2007; Zahra, Hayton, Neubaum, Dibrell, & Craig, 2008), agency theory paints a very different picture of children' s involvement in the firm. Family firm owners are often criticized for employing children who are less able, committed, or ethical than the leader expected (Chrisman, Chua, & Litz, 2004). Some family firms suffer from opportunism and the consumption of unearned perks by family members whereby it may be more likely to "observe children shirking than working" (Chrisman et al., p. 338). Accordingly, it has been suggested that many family firms suffer performance problems because the leader's children exhibit deviant behaviors, exploiting the business for personal gain (Bennett, Thau, & Scouten, 2005).

Workplace deviance is voluntary behavior that violates significant organizational norms and, in so doing, threatens the well-being of the organization and/or its members (Robinson & Bennett, 1997). It includes free riding, lying, insubordination, sabotage, abuse of privileges, harassment, theft, aggression, lack of regard for cost control, and drug and alcohol abuse. Deviance costs businesses more than $20 billion each year and causes 30% of business failures (Murphy, 1993; Tomlinson & Greenberg, 2005). Other negative repercussions include lawsuits, productivity losses, higher expenses, and loss of reputation. Although research rooted in agency theory acknowledges the costs associated with opportunism, this research does not address why some individual family members are more likely to act deviantly than others. Further, while this research highlights the central role parents play in producing agency costs (Lubatkin, Schulze, Ling, & Dino, 2005; Schulze, Lubatkin, Dino, & Buchholtz, 2001), it portrays intra-family relationships among parents and children as relatively homogeneous (Lubatkin, Durand, & Ling, 2007). Therefore, in contrast to the abundance of family firm research that applies stewardship or agency theory, viewing the family as either a resource or a constraint to the firm, we recognize that a family may be comprised of both stewards and deviants.

The purpose of this article is to offer an initial theory of workplace deviance in the family firm. We focus on parent-child relationships (PCRs) as the root cause of deviance because parents are known to show preferential treatment toward some family members, have difficulty punishing children due to spillover effects on family relationships, and continue to act generously toward their children even when they display dysfunctional behaviors (i. …

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