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Small Business Economics

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01.05.2017

Just about money? CEO satisfaction and firm performance in small family firms

verfasst von: Lucía Garcés-Galdeano, Martin Larraza-Kintana, Cristina Cruz, Ignacio Contín-Pilart

Erschienen in: Small Business Economics | Ausgabe 4/2017

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Abstract

This paper examines how family ownership and family ties influence the relative importance of economic and non-economic goals on the CEO’s satisfaction with the firm. Using a sample of small high-tech family and non-family firms, we show that the influence of past firm economic performance on CEO satisfaction is weaker in the case of CEOs leading a family firm. Our results also suggest that this influence becomes weaker as the family firm transitions into subsequent generations. However, contrary to our expectations, we were not able to find a differential effect of firm performance on CEO satisfaction between CEOs who belong to the controlling family and those who do not.

Vorheriger Artikel High-tech start-up firm survival originating from a combined use of internal resources

Nächster Artikel Parents’ performance in entrepreneurship as a “double-edged sword” for the intergenerational transmission of entrepreneurship

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Indeed, evidence shows that family CEOs hold tenure four times longer than that of a non-family CEO in the case of family firms (McConaughy 2000; Gomez-Mejia et al., 2003).

INE is the Spanish National Institute of Statistics. Sectors 21 (manufacturing of pharmaceutical products), 26 (manufacturing of optical and electronic devices), and 303 (manufacturing of aeronautic and aerospace machines and products) are manufacturing high-tech sectors. Sectors 20 (chemical industry), 254 (weapon and ammunition manufacturing), 27 (manufacturing of electric products), 28 (manufacturing of machines and equipment), 29 (car manufacturing), 302 (manufacturing of railway products), 304 (manufacturing of military vehicles), 309 (manufacturing of other transportation materials), and 325 (manufacturing of medical instruments and supplies) are the medium-high technology manufacturing sectors. Finally, sectors 59 (image and music recording and editing), 60 (radio and television broadcast), 61 (telecommunication), 62 (software programming and consulting), 63 (information services), and 72 (research and development) are high-technology service sectors.

There may be a potential issue of simultaneity between satisfaction and expectations of firm performance (i.e., expectations influence satisfaction, but also satisfaction may influence expectations). In order to gauge whether this potential simultaneity between these two variables may confound our conclusions, we ran our models removing the variable “expectations” from the model. Results were fully consistent with those reported in the article, and therefore, its presence or absence does not alter our main conclusions.

Our main conclusions remain unaltered when a more fine grained industry breakdown is considered.

Ordered probit is the most appropriate model to use when (a) a dependent variable has more than two categories; (b) the values of each category have a meaningful sequential order where a value is indeed “higher” than the previous one; and (c) the data follow a normal distribution.

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Titel: Just about money? CEO satisfaction and firm performance in small family firms
verfasst von: Lucía Garcés-Galdeano
Martin Larraza-Kintana
Cristina Cruz
Ignacio Contín-Pilart
Publikationsdatum: 01.05.2017
Verlag: Springer US
Erschienen in: Small Business Economics / Ausgabe 4/2017
Print ISSN: 0921-898X
Elektronische ISSN: 1573-0913
DOI: https://doi.org/10.1007/s11187-017-9863-9

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