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The Effect of Family Business Professionalization as a Multidimensional Construct on Firm Performance

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  • Julie Dekker
  • Nadine Lybaert
  • Tensie Steijvers
  • Benoît Depaire

Abstract

In family business literature, business professionalization is often simplified into a binary characteristic, that is, the presence of a nonfamily manager. We contend that other professionalization features, which may act simultaneously, can influence firm performance. This study addresses professionalization as a multidimensional construct, as intended by general management literature, and assesses the impact on business performance based on these underlying dimensions. Using a representative sample of 523 private elgian family businesses, we identify five different dimensions of the professionalization construct by means of an exploratory factor analysis. Further regression results revealed significant positive effects of increasing nonfamily involvement, implementing human resource control systems, and/or decentralizing authority on firm performance. However, nonfamily involvement only seems to improve firm performance if there is sufficient decentralization of authority and an average or even low amount of formal financial control systems.

Suggested Citation

  • Julie Dekker & Nadine Lybaert & Tensie Steijvers & Benoît Depaire, 2015. "The Effect of Family Business Professionalization as a Multidimensional Construct on Firm Performance," Journal of Small Business Management, Taylor & Francis Journals, vol. 53(2), pages 516-538, April.
    • Handle: RePEc:taf:ujbmxx:v:53:y:2015:i:2:p:516-538
    DOI: 10.1111/jsbm.12082
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    Citations

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    Cited by:

    1. Rodriguez-Garcia, P. & Menéndez-Requejo, S., 2020. "Family Constitution to manage family firms' agency conflicts," MPRA Paper 120016, University Library of Munich, Germany.
    2. Kosmidou, Vasiliki & Holt, Daniel T., 2022. "The relationship between family management and performance: A configurational approach in exploring the role of socioemotional wealth and generational stage," Journal of Family Business Strategy, Elsevier, vol. 13(4).
    3. Hu, Min & Dou, Junsheng & You, Xialei, 2023. "Is organizational ambidexterity always beneficial to family-managed SMEs? Evidence from China," Journal of Business Research, Elsevier, vol. 167(C).
    4. Nareuporn (Bell) Piyasinchai & Trin Thananusak & Mat Hughes, 2024. "Effects of Family Ownership and Professionalization on Firms’ Financial Performance and Sustainability Reputation," Entrepreneurship Theory and Practice, , vol. 48(3), pages 856-880, May.
    5. Ada Domanska & Robert Zajkowski, 2022. "Barriers to gaining support: a prospect of entrepreneurial activity of family and non-family firms in Poland," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 17(1), pages 191-224, March.

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