Family Influence on Performance of Family Small and Medium Enterprises

Table of Contents

1. Frontmatter

2. Chapter 1. Introduction

   Ana Paula Matias Gama, Catarina Afonso Alves

   Abstract

   This book focuses on SME firms because they constitute the vast majority of businesses in general economies. Moreover, the relationship between family involvement and firm performance (economic and noneconomic) is likely to be more pronounced and more important in influencing behaviors in small businesses than in large businesses, where nonfamily managers, greater ownership dispersion, and independent boards of directors may attenuate the relationships of interest. Hence this research examines how family influences the business performance (economic and noneconomic) of Portuguese SMEs and how such a relationship is mediated by stewardship behavior. We hypothesize that differences in performance (i.e., economic and noneconomic) are not driven only by family involvement or lack thereof, but by the prevalence of stewardship relationships within the firm, whatever the degree of family involvement.

3. Chapter 2. Theoretical Background

   Ana Paula Matias Gama, Catarina Afonso Alves

   Abstract

   Family businesses have been the backbone of old economies and civilizations (Bird et al., 2002). In Greek civilization, economic activities were mainly controlled by members of a family. These circumstances did not undergo significant changes during the Roman Empire period and subsequently, in the Middle Ages and the age of the discoveries (Bertrand and Schoar, 2006). In pre-industrial society, the family and the work were two interconnected elements. According to Hall (1988), it was the family-owned businesses that drove the process of economic development that originated the “Industrial Era.” This chapter performs a theoretical framework related to the different approaches of the concept of family business.

4. Chapter 3. Family Influence and Performance

   Ana Paula Matias Gama, Catarina Afonso Alves

   Abstract

   This chapter analyzes how to measure family influence. F-PEC scale developed by Astrachan et al. (2002) and validated by Klein et al. (2005) and Holt et al. (2010) and revisited by Rau et al. (2018) is discussed. The F-PEC scale has the advantage to establish some “order” in the definition of the family business, by considering the family business as a “continuum” from less familiar to more familiar. Further, the broader concept of the performance is discussed, namely, we discuss not only how family influences economic performance as well as and noneconomic goals.

5. Chapter 4. Research Hypotheses

   Ana Paula Matias Gama, Catarina Afonso Alves

   Abstract

   Chapter 4 presents the research hypotheses and the theoretical framework of the research.

6. Chapter 5. Research Methodology

   Ana Paula Matias Gama, Catarina Afonso Alves

   Abstract

   Chapter 5 “Research Methodology” includes the research methodology, starting in the first section by describing the sample selection procedures and in section two explaining the data collection method (survey). Section three presents the definition and operationalization of variables, and the last section describes the methods employed.

7. Chapter 6. Analyses and Discussion of Results

   Ana Paula Matias Gama, Catarina Afonso Alves

   Abstract

   The analysis and discussion of the results are reported in Chapter 6. The first section begins by characterizing the family businesses in the sample and then, in the following sections, it analyzes the results obtained from the Exploratory Factor Analysis and the Multiple Linear Regression Models, assessing whether or not the research hypotheses determined in Chapter 4 are supported.

8. Chapter 7. Conclusions, Contributions, and Recommendations

   Ana Paula Matias Gama, Catarina Afonso Alves

   Abstract

   Chapter 7 “Conclusions, Contributions, and Recommendations” provides the research findings, highlighting the study’s contribution to the family business performance debate, and also presents the research limitations and recommendations. The results suggest that family influence is a complex and multifaceted phenomenon that can have positive and negative effects on the performance of family businesses and many family businesses survive over generations not only because they are more efficient or profitable but because they meet the socio-emotional needs of their owners.

9. Backmatter