The Management of Family Firms: An Empirical Investigation

Abstract

Stephenson and David Monteith are with the University of Ulster at Jordanstown, Northern Ireland. A significant proportion of small firms in the United Kingdom and the United States are family businesses where one family exercises financial and/or managerial control. Differences occur between those ventures where ownership and/or control is vested in a founder and his family and those where non-owning managers are the dominant force. This paper reports on an empirical investigation carried out by the authors into more than 3,000 firms in Britain and Ireland. They examined whether demographic differences in areas such as age, size, legal status and industrial classification arose between family and non-family firms and whether distinctive ownership arrangements and management structures were found in the two groups. At the outset they suspected that family firms would be less professionally managed in terms of their strategic and day-to-day decision making, designation of roles and relationships and evaluation of their personnel than nonfamily businesses.