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Family Involvement in Middle Management and Its Impact on the Labor Productivity of Family Firms

Author

Listed:
  • Qiongjing Hu

    (Peking University [Beijing])

  • Yanlong Zhang

    (Peking University [Beijing])

  • Jingjing Yao

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

Abstract

Family business owners and researchers tend to overwhelmingly focus on the top-level structure of firms but ignore the middle-level practice – involving family members in the middle-management team. Compared to top managers at the strategic apex, middle-level managers are mainly responsible for internal operations and control, and the composition of the middle-management team has an immediate and direct impact on the overall workforce efficiency of family firms. Integrating agency theory and organizational justice perspective, we proposed that family involvement in middle management would have a negative impact on the labor productivity of family firms. We further corroborated this effect by identifying three boundary conditions at the individual (i.e., familial CEO), organizational (i.e., firm size), and regional (i.e., labor mobility) levels. Using a sample of 1,284 privately owned family firms in China, we found that family involvement in middle management, measured as the percentage of familial middle-level managers, was negatively associated with labor productivity. Furthermore, this negative relationship existed only when the CEO is a family member rather than a professional manager, when the size of the firm is large rather than small, or when the firm is located in regions with low rather than high labor mobility. These findings contribute to family business literature and provide practical implications for human resource management in family firms.

Suggested Citation

  • Qiongjing Hu & Yanlong Zhang & Jingjing Yao, 2018. "Family Involvement in Middle Management and Its Impact on the Labor Productivity of Family Firms," Post-Print hal-03004018, HAL.
    • Handle: RePEc:hal:journl:hal-03004018
    DOI: 10.1017/mor.2018.5
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    Cited by:

    1. Flamini, Giulia & Pittino, Daniel & Visintin, Francesca, 2022. "Family leadership, family involvement and mutuality HRM practices in family SMEs," Journal of Family Business Strategy, Elsevier, vol. 13(2).
    2. Osman, Adam & Speer, Jamin D. & Weaver, Andrew, 2022. "Connections, Referrals, and Hiring Outcomes: Evidence from an Egyptian Establishment Survey," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 342-355.
    3. Creemers, Sarah & Peeters, Ludo & Quiroz Castillo, Juan Luis & Vancauteren, Mark & Voordeckers, Wim, 2023. "Family firms and the labor productivity controversy: A distributional analysis of varying labor productivity gaps," Journal of Family Business Strategy, Elsevier, vol. 14(2).
    4. Waldkirch, Matthias, 2020. "Non-family CEOs in family firms: Spotting gaps and challenging assumptions for a future research agenda," Journal of Family Business Strategy, Elsevier, vol. 11(1).

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