Understanding the performance consequences of family involvement in the top management team: The role of long-term orientation

Abstract

This article examines the relationship between long-term orientation, family involvement in the top management team (TMT), and family firm performance. On the basis of agency and stewardship theory, we propose that the inclusion of family members in the TMT only enhances firm performance if it induces a long-term orientation among management. An empirical analysis involving 201 privately owned family firms from Germany supports our theory that a long-term orientation helps align family and organizational goals. As such, it represents an important mediator that links family involvement in the TMT to performance.