Academic journal article Journal of Small Business Strategy

Family-Member and Non-Family-Member Managers in Family Firms: Adding a Seventh Country to the International Database - Kosovo

Academic journal article Journal of Small Business Strategy

Family-Member and Non-Family-Member Managers in Family Firms: Adding a Seventh Country to the International Database - Kosovo

Article excerpt

ABSTRACT

Extending earlier analyses of the authors in other countries with regard to the inclusion of family-member managers and non-family-member managers in family businesses, and the relationship of this variable to certain management activities, styles and characteristics, this current study analyzes data from Kosovo. Results of statistical testing indicate almost no changes in management attributes as the proportion of non-family-member managers increases in family firms. Implications for practitioners, consultants, and researchers are presented.

Keywords: family business, family firm, family business management

INTRODUCTION

The purpose of this study was to investigate family businesses with regard to the degree to which such firms employ non-family members as managers. How does the ratio of nonfamily- member managers to familymember managers in a family firm relate to various managerial activities, styles and practices of that firm? Recent studies by the authors in other countries were replicated in Kosovo, so as to expand the total data base and to strengthen the total set of findings.

Prior research into the issue of familymember managers (FM's) versus nonfamily- member managers (NFM's) in family businesses has been limited. Chua, Chrisman and Sharma, with very strong empirical experience in the field of family business, concluded that "issues related to non-family managers [in family firms] have received very little attention by researchers" and "there is definitely a gap in our understanding of the role played by non-family managers in the family business" (2003, pp. 102, 103). Chrisman, Chua, and Sharma (2005) stated that many questions remain unanswered and much interesting research remains to be done to determine how family involvement affects firm performance. Ensley and Pearson (2005) concluded that family business research needs to identify the nature of family involvement in top management teams, in response to which Nordqvist (2005) agreed that this is a breach in the literature that has not received much attention. Chrisman, Chua, and Steier also agreed with the need to better understand top management teams in family businesses as "this is a topic of great importance since the decisions of top mangers may determine the extent to which a family business obtains distinctive familiness and superior economic performance (2005, p. 241).

There is also a growing interest in investigating management characteristics and activities in different countries. Oviatt and McDougall (2005) called analyzing entrepreneurial behavior in various countries rich in opportunities and having possibilities to move such research from its infancy into high growth.

This current study is therefore important in that it brings new empirical research to these issues of FMs and NFMs in family business management, and that it does so in a country not previously studied with regard to this issue. Furthermore, the results of this research are not only of value to researchers, but should also be of value to consultants to family businesses and to family business owner/managers themselves, both of whom may gain insight into the possible impact of having non-family managers in family businesses.

LITERATURE REVIEW

Although most definitions of a "family business" include the criterion of the prevalence of family members in the management team, an extensive review of the family business literature has found few academic papers or journal articles that investigated the impact of NFM's on the management activities, styles and practices of family firms. The papers and articles that did touch on this topic usually did so in a tangential manner and/or in a conceptual or anecdotal method, rather than via empirical investigation. Somewhat more frequently found, but still few in number, were papers and articles that compared family businesses and nonfamily businesses, an issue quite different in nature. …

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