Family Firm Performance Succession Effect: The Moderating Roles of Industry Type and Birth Order

Location

Bunch Library Multimedia Hall

Start Date

4-3-2020 2:05 PM

End Date

4-3-2020 2:20 PM

Publication Date

Spring 3-4-2020

Description

When does the choice of one successor over another from within the family benefit family firm performance? Despite enduring interest in this question and a range of important theoretical contributions based in agency theory, the literature suffers from mixed empirical results and a lack of consideration for situationally-based theoretical contingencies in which succession occurs. One result is the persistence of questions as to whether or not important theoretical factors have been missed or a boundary condition(s) related to the agentic issues associated with family membership have been clearly articulated. This study draws on the notion of environmental dynamism (Dess and Beard, 1984) in order to extend prior efforts in developing agency-based insights around within-family succession transitions, outside governance mechanisms, and firm performance. Empirical results provide support for the central proposition. Industry type, conceptualized as technology-based conditions, exerts a systematic moderating influence on the relationships between ship and leadership birth order, outside governance mechanisms, and family firm performance. Results further show family leadership turnover in high tech industry conditions may be caused by something other than financial performance though non-first-son CEOs appear generally immune to such turnover.

Comments

Mark Schenkel was a Belmont University Scholarship Award Recipient, 2018-19

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Mar 4th, 2:05 PM Mar 4th, 2:20 PM

Family Firm Performance Succession Effect: The Moderating Roles of Industry Type and Birth Order

Bunch Library Multimedia Hall

When does the choice of one successor over another from within the family benefit family firm performance? Despite enduring interest in this question and a range of important theoretical contributions based in agency theory, the literature suffers from mixed empirical results and a lack of consideration for situationally-based theoretical contingencies in which succession occurs. One result is the persistence of questions as to whether or not important theoretical factors have been missed or a boundary condition(s) related to the agentic issues associated with family membership have been clearly articulated. This study draws on the notion of environmental dynamism (Dess and Beard, 1984) in order to extend prior efforts in developing agency-based insights around within-family succession transitions, outside governance mechanisms, and firm performance. Empirical results provide support for the central proposition. Industry type, conceptualized as technology-based conditions, exerts a systematic moderating influence on the relationships between ship and leadership birth order, outside governance mechanisms, and family firm performance. Results further show family leadership turnover in high tech industry conditions may be caused by something other than financial performance though non-first-son CEOs appear generally immune to such turnover.