Do Firm Growth Stage and Area of Management Practice Affect the Non-Family CEO Advantage?

Dmitry Mikhail Khanin, Atanu Rakshit

2017

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DOI 10.5465/ambpp.2017.15218abstract
Data confidence 70 medium
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Abstract

Recent studies have shown that family firms run by family CEOs (FCs) underperform family firms run by non-family CEOs (NFCs) in the aggregate (Bloom & Van Reenen, 2006; 2007). In this paper, we reexamine the data to determine if the NFC advantage is contingent on the stage of family firm growth and area of management practice. We demonstrate that the NFC advantage increases as the family firm grows, peaks and then subsides. We also establish that the NFC advantage is the greatest in the area of talent management, the lowest in the area of goal setting, and moderate in the areas of operations and monitoring. Analyzing these findings, we provide some practical recommendations as to how FCs could potentially improve their performance.