IDEAS home Printed from https://ideas.repec.org/a/mth/ijhr88/v9y2019i4p19-37.html
   My bibliography  Save this article

Impact of Family Ownership on Organizational Performance With the Moderating Role of Active Versus Passive Control: A Case of Pakistan’s Private Sector

Author

Listed:
  • Muhammad Shaukat Malik
  • Mian Muhammad Tayyab

Abstract

Most of the businesses operations in the world are governed typically by a family or a government and in some other situations, sole person regulates the operations of several firms beneath a single umbrella. The main purpose of the study is to examine the association between ownership structure of the business and its performance. The sample of the study is based on 100 companies listed in KSA (Karachi stock Exchange). The data was gathered from secondary sources of financial reports of firm and the time period is based on 9 years from 2005 to 2013. Financial performance of the firm is calculated through the accounting based methods like as several ratios of Return on asset, Net Profit Margin, Return on Equity, Financial Leverage, Tobin’s Q and Earning per share. Several statistical tools (e,g Correlation, reliability, regression analysis and t-test) are used to measure the results on SPSS. Active and passive controls are used as moderator in the study. According to the result it is concluded that all hypothesis are accepted. Similarly, a significant difference is existed in firm performance under active and passive control. This study is very helpful for the investors and the business owners of family owned firms.

Suggested Citation

  • Muhammad Shaukat Malik & Mian Muhammad Tayyab, 2019. "Impact of Family Ownership on Organizational Performance With the Moderating Role of Active Versus Passive Control: A Case of Pakistan’s Private Sector," International Journal of Human Resource Studies, Macrothink Institute, vol. 9(4), pages 19-37, December.
    • Handle: RePEc:mth:ijhr88:v:9:y:2019:i:4:p:19-37
    as

    Download full text from publisher

    File URL: http://www.macrothink.org/journal/index.php/ijhrs/article/download/15478/12126
    Download Restriction: no
    File URL: http://www.macrothink.org/journal/index.php/ijhrs/article/view/15478
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gallo, Miguel A. & Cappuyns, Kristin, 2004. "Characteristics of successful family businesses," IESE Research Papers D/542, IESE Business School.
    2. Roberto Barontini & Lorenzo Caprio, 2006. "The Effect of Family Control on Firm Value and Performance: Evidence from Continental Europe," European Financial Management, European Financial Management Association, vol. 12(5), pages 689-723, November.
    3. repec:bla:jfinan:v:58:y:2003:i:3:p:1301-1327 is not listed on IDEAS
    4. Leenders, M.A.A.M. & Waarts, E., 2001. "Competitiveness of Family Businesses," ERIM Report Series Research in Management ERS-2001-50-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    5. Kamran & Attaullah Shah, 2014. "The Impact of Corporate Governance and Ownership Structure on Earnings Management Practices: Evidence from Listed Companies in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 19(2), pages 27-70, July-Dec.
    6. Kim, Hohyun & Han, Seung Hun, 2018. "Compensation structure of family business groups," Pacific-Basin Finance Journal, Elsevier, vol. 51(C), pages 376-391.
    7. De Massis, Alfredo & Kotlar, Josip & Campopiano, Giovanna & Cassia, Lucio, 2013. "Dispersion of family ownership and the performance of small-to-medium size private family firms," Journal of Family Business Strategy, Elsevier, vol. 4(3), pages 166-175.
    8. Chau, Gerald & Gray, Sidney J., 2010. "Family ownership, board independence and voluntary disclosure: Evidence from Hong Kong," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 19(2), pages 93-109.
    9. Fan, Joseph P. H. & Wong, T. J., 2002. "Corporate ownership structure and the informativeness of accounting earnings in East Asia," Journal of Accounting and Economics, Elsevier, vol. 33(3), pages 401-425, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cieslak, Katarzyna & Hamberg, Mattias & Vural, Derya, 2021. "Executive compensation disclosure, ownership concentration and dual-class firms: An analysis of Swedish data," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 45(C).
    2. Cristina Alexandrina Stefanescu, 2013. "How Do Ownership Features Affect Corporate Governance Disclosure ? - The Case of Banking System," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 9(2), pages 37-51, April.
    3. Julio Pindado & Ignacio Requejo & Chabela la Torre, 2015. "Does Family Control Shape Corporate Capital Structure? An Empirical Analysis of Eurozone Firms," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 42(7-8), pages 965-1006, September.
    4. Wenig, Thilo, 2021. "Performance of German Family Firms During the Global Financial Crisis," Junior Management Science (JUMS), Junior Management Science e. V., vol. 6(2), pages 237-278.
    5. Juan Manuel San Martin-Reyna & Jorge A. Duran-Encalada, 2015. "Effects of Family Ownership, Debt and Board Composition on Mexican Firms Performance," IJFS, MDPI, vol. 3(1), pages 1-19, March.
    6. Naeem Tabassum & Satwinder Singh, 2020. "Corporate Governance and Organisational Performance," Springer Books, Springer, number 978-3-030-48527-6, January.
    7. Arosa, Blanca & Iturralde, Txomin & Maseda, Amaia, 2010. "Ownership structure and firm performance in non-listed firms: Evidence from Spain," Journal of Family Business Strategy, Elsevier, vol. 1(2), pages 88-96, June.
    8. Jennifer Martínez-Ferrero & Lázaro Rodríguez-Ariza & Isabel-María García-Sánchez & Beatriz Cuadrado-Ballesteros, 2018. "Corporate social responsibility disclosure and information asymmetry: the role of family ownership," Review of Managerial Science, Springer, vol. 12(4), pages 885-916, October.
    9. Stefanescu Cristina Alexandrina, 2012. "Ownership Concentration And Corporate Governance Disclosure -The Case Of Financial Institutions," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 830-836, July.
    10. Rosalia Santulli & Mariateresa Torchia & Andrea Calabrò & Carmen Gallucci, 2019. "Family ownership concentration and firm internationalization: integrating principal-principal and socioemotional wealth perspectives," Journal of International Entrepreneurship, Springer, vol. 17(2), pages 220-248, June.
    11. Zeineb Barka & Taher Hamza, 2020. "The effect of large controlling shareholders on equity prices in France: monitoring or entrenchment?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 24(3), pages 769-798, September.
    12. Nagar, Neerav & Raithatha, Mehul, 2016. "Does good corporate governance constrain cash flow manipulation? Evidence from India," IIMA Working Papers WP2016-03-23, Indian Institute of Management Ahmedabad, Research and Publication Department.
    13. Miralles-Marcelo, José Luis & Miralles-Quirós, Maria del Mar & Lisboa, Inês, 2014. "The impact of family control on firm performance: Evidence from Portugal and Spain," Journal of Family Business Strategy, Elsevier, vol. 5(2), pages 156-168.
    14. Shou-Min Tsao & Wei-Hao Lien, 2013. "Family Management and Internationalization: The Impact on Firm Performance and Innovation," Management International Review, Springer, vol. 53(2), pages 189-213, April.
    15. Abdul Rahman Al Natour & Rasmi Meqbel & Salah Kayed & Hala Zaidan, 2022. "The Role of Sustainability Reporting in Reducing Information Asymmetry: The Case of Family- and Non-Family-Controlled Firms," Sustainability, MDPI, vol. 14(11), pages 1-17, May.
    16. Ammar Abid & Muhammad Shaique & Muhammad Anwar ul Haq, 2018. "Do Big Four Auditors Always Provide Higher Audit Quality? Evidence from Pakistan," IJFS, MDPI, vol. 6(2), pages 1-22, June.
    17. López-Delgado, P. & Diéguez-Soto, J., 2015. "Lone founders, types of private family businesses and firm performance," Journal of Family Business Strategy, Elsevier, vol. 6(2), pages 73-85.
    18. Hegde, Shantaram & Seth, Rama & Vishwanatha, S.R., 2020. "Ownership concentration and stock returns: Evidence from family firms in India," Pacific-Basin Finance Journal, Elsevier, vol. 61(C).
    19. Paolo Roffia & Virginia Simón-Moya & Javier Sendra García, 2022. "Board of director attributes: effects on financial performance in SMEs," International Entrepreneurship and Management Journal, Springer, vol. 18(3), pages 1141-1172, September.
    20. Xu, Shen & Yin, Bichao & Lou, Chunjie, 2022. "Minority shareholder activism and corporate social responsibility," Economic Modelling, Elsevier, vol. 116(C).

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mth:ijhr88:v:9:y:2019:i:4:p:19-37. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Technical Support Office (email available below). General contact details of provider: http://www.macrothink.org/journal/index.php/ijhrs/index .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.