This exploratory study investigates the relationship between family members serving in an advising capacity and family firm performance. Integrating the stewardship and agency perspectives, we predict an inverted U-shaped relationship between the number of family advisors and family firm performance. We argue that the generation in control moderates this relationship such that family member advisors have a positive relationship with performance in first-generation family firms and an inverted U-shaped relationship with performance in later-generation family firms. Our empirical analysis on a sample of 128 Swedish family firms confirms our hypotheses. In the concluding section, we discuss results, contributions and future research directions.
AikenL. S.WestS. G. (1991). Multiple regression: Testing and interpreting interactions. Newbury Park, CA: Sage.
2.
AndersonR. C.ReebD. M. (2003). Founding-family ownership and firm performance: evidence from the S&P 500. Journal of Finance, 58, 1301-1327.
3.
ArregleJ.-L.HittM. A.SirmonD. G.VeryP. (2007). The development of organizational social capital: Attributes of family firms. Journal of Management Studies, 44, 72-95.
4.
AstrachanJ. H.McMillanK. S. (2006). United States. In KaslowF. W. (Ed.), Handbook of family business & family business consultation: A global perspective (pp. 347-363). Binghamton, NY: International Business Press.
5.
BammensY.VoordeckersW.Van GilsA. (2008). Boards of directors in family firms: A generational perspective. Small Business Economics Journal, 31, 163-180.
6.
BarberaF.HassoT. (2013). Do we need to use an accountant? The sales growth and survival benefits to family SMEs. Family Business Review, 26, 271-292.
7.
BarnettT.EddlestonK.KellermannsF. W. (2009). Business owners’ role salience, career satisfiers, and performance-related outcomes in family versus non-family firms. Family Business Review, 22, 39-52.
8.
BeckL.JanssensW.DebruyneM.LommelenT. (2011). A study of the relationships between generation, market orientation, and innovation in family firms. Family Business Review, 24, 252-272.
9.
BertrandM.SchoarA. (2006). The role of family in family firms. Journal of Economic Perpectives, 20, 73-96.
10.
BoydJ.UptonN.WircenskiM. (1999). Mentoring in family firms. A reflective analysis of senior executives’ perceptions. Family Business Review, 12, 299-310.
11.
CarneyM. (2005). Corporate governance and competitive advantage in family-controlled firms. Entrepreneurship Theory and Practice, 29, 249-265.
12.
CasillasJ. C.MorenoA. M.BarberoJ. L. (2010). A configurational approach of the relationship between entrepreneurial orientation and growth of family firms. Family Business Review, 23, 27-44.
13.
ChrismanJ. J.ChuaJ. H.KellermannsF. W.ChangE. P. (2007). Are family managers agents or stewards? An exploratory study in privately held family firms. Journal of Business Research, 60, 1030-1038.
14.
ChrismanJ. J.ChuaJ. H.PearsonA. W.BarnettT. (2012). Family involvement, family influence, and family-centered non-economic goals in small firms. Entrepreneurship Theory and Practice, 36, 267-293.
15.
ChrismanJ. J.ChuaJ. H.SharmaP. (2005). Trends and directions in the development of a strategic management theory of the family firm. Entrepreneurship Theory and Practice, 29, 555-576.
16.
ChuaJ. H.ChrismanJ. J.SharmaP. (2003). Succession and nonsuccession concerns of family firms and agency relationship with nonfamily managers. Family Business Review, 16, 89-107.
17.
ChurchillN. C.LewisV. L. (1983). The five stages of small business growth. Harvard Business Review, 61(3), 30-50.
18.
CorbettaG.SalvatoC. (2004). Self-serving or self-actualizing? Models of man and agency costs in different types of family firms: A commentary on comparing the agency costs of family and non-family firms: Conceptual issues and exploratory evidence. Entrepreneurship Theory and Practice, 28, 355-362.
19.
CruzC.NordqvistM. (2012). Entrepreneurial orientation in family firms: A generational perspective. Small Business Economics Journal, 38, 33-49.
20.
DavisJ. H.AllenM. R.HayesH. D. (2010). Is blood thicker than water? A study of stewardship perceptions in family business. Entrepreneurship Theory and Practice, 34, 1093-1116.
21.
DavisW. D.DibrellC.CraigJ. B.GreenJ. (2013). The effects of goal orientation and client feedback on the adaptive behaviors of family enterprise advisors. Family Business Review, 26, 215-234.
22.
DavisJ. H.SchoormanF. D.DonaldsonL. (1997). Toward a stewardship theory of management. Academy of Management Review, 22, 20-47.
23.
DeckerC.LangeK. S. G. (2013). Exploring a secretive organization: What can we learn about family offices from the public sphere?Organizational Dynamics, 42, 298-306.
24.
DeephouseD. L.CarterS. M. (2005). An examination of differences between organizational legitimacy and organizational reputation. Journal of Management Studies, 42, 329-360.
25.
DonaldsonL. (1990). The ethereal hand: Organizational economics and management theory. Academy of Management Review, 15, 369-381.
26.
DonaldsonL.DavisJ. H. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of Management, 16, 49-64.
27.
DyerW. G. (1986). Cultural change in family firms: Anticipating and managing business and family transition. San Francisco, CA: Jossey-Bass.
28.
DyerW. G. (1988). Culture and continuity in family firms. Family Business Review, 1, 37-50.
29.
DyerW. G.Jr.SánchezM. (1998). Current state of family business theory and practice as reflected in Family Business Review 1988-1997. Family Business Review, 11, 287-296.
30.
EddlestonK. A.KellermannsF. W.FloydS. W.CrittendenV. L.CrittendenW. F. (2013). Planning for growth: Life stage differences in family firms. Entrepreneurship Theory and Practice, 37, 1177-1202.
31.
EddlestonK.KellermannsF. W. (2007). Destructive and productive family relationships: A stewardship theory perspective. Journal of Business Venturing, 22, 545-565.
32.
EddlestonK.KellermannsF. W.SarathyR. (2008). Resource configuration in family firms: linking resources, strategic planning and technological opportunities to performance. Journal of Management Studies, 45, 26-50.
33.
FamaE. F.JensenM. C. (1985). Organizational forms and investment decisions. Journal of Financial Economics, 14, 101-119.
34.
FiegenerM. K. (2010). Locus of ownership and family involvement in small private firms. Journal of Management Studies, 47, 296-321.
35.
GagliardiP. (1986). The creation and change of organizational cultures: A conceptual framework. Organization Studies, 7, 117-134.
36.
GedajlovicE.LubatkinM.SchulzeW. S. (2004). Crossing the threshold from founder management to professional management: A governance perspective. Journal of Management Studies, 41, 899-912.
37.
GersickK. E.DavisJ. A.HamptonM. M.LansbergI. (1997). Generation to generation: Life cycles of the family business. Boston, MA: Harvard Business School Press.
38.
Gillis-DonovanJ.Moynihan-BradtC. (1990). The power of invisible women in the family business. Family Business Review, 3, 153-167.
39.
Gómez-MejíaL. R.HaynesK. T.Núñez-NickelM.JacobsonK. J. L.Moyano-FuentesH. (2007). Socioemotional wealth and business risk in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52, 106-137.
40.
GreinerL. E. (1972). Evolution and revolution as organizations grow. Harvard Business Review, 50(3), 37-46.
41.
GreinerL. E. (1997). Evolution and revolution as organizations grow. Harvard Business Review, 76(3), 55-60.
42.
HabbershonT. G.PistruiJ. (2002). Enterprising families domain: Family-influenced ownership groups in pursuit of transgenerational wealth. Family Business Review, 15, 223-238.
43.
HabbershonT. G.WilliamsM. (1999). A resource-based framework for assessing the strategic advantage of family firms. Family Business Review, 12, 1-25.
44.
HackmanJ. R. (2002). Leading teams: Setting the stage for great performances. Boston, MA: Harvard Business School Press.
45.
HairJ. F.BlackB.BabinB.AndersonR. E. (2010). Multivariate data analysis (6th ed.). Upper Saddle River, NJ: Prentice Hall.
46.
HallA.MelinL.NordqvistM. (2001). Entrepreneurship as radical change in the family business: Exploring the role of cultural patterns. Family Business Review, 14, 193-208.
47.
HallA.NordqvistM. (2008). Professional management in family businesses: Toward an extended understanding. Family Business Review, 21, 51-69.
48.
Hilburt-DavisJ.DyerW. G. (2003). Consulting to family businesses: A practical guide to contracting, assessment, and implementation. New York, NY: Wiley.
49.
JaffeD. T.LaneS. H. (2004). Sustaining a family dynasty: Key issues facing complex multigenerational business-and investment-owning families. Family Business Review, 17, 81-98.
50.
JensenM. C.MecklingW. H. (1976). Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3, 305-360.
51.
KayeK. (1991). Penetrating the cycle of sustained conflict. Family Business Review, 4, 21-44.
52.
KayeK. (1996). When the family business is a sickness. Family Business Review, 9, 347-368.
53.
KayeK.McCarthyC. (1996). Healthy disagreements. Family Business, Autumn, 71-72.
54.
KellermannsF. W.EddlestonK. A. (2004). Feuding families: When conflict does a family firm good. Entrepreneurship Theory and Practice, 28, 209-228.
55.
KellermannsF. W.EddlestonK. (2006). Feuding families: The management of conflict in family firms. In PoutziourisP.SmyrniosK.KleinB. (Eds.), Family business research handbook (pp. 358-368). Northampton, MA: Edward Elgar.
56.
KellermannsF. W.EddlestonK. A.SarathyR.MurphyF. (2012). Innovativeness in family firms: A family influence perspective. Small Business Economics Journal, 38, 85-101.
57.
KleindorferP. R.WuD. J. (2003). Integrating long- and short-term contracting via business-to-business exchanges for capital-intensive Industries. Management Science, 49, 1597-1615.
58.
KraiczyN. D.HackA.KellermannsF. W. (2014). New product portfolio performance in family firms. Journal of Business Research, 67, 1065-1073.
59.
LansbergI. S. (1988). The succession conspiracy: Resistance to succession planning in first generation family firms. Family Business Review, 1, 119-143.
60.
LansbergI. S. (1999). Succeeding generations: Realizing the dream of families in business. Boston, MA: Harvard Business School Press.
61.
Le Breton-MillerI.MillerD. (2009). Agency vs. stewardship in public family firms: A social embeddedness reconciliation. Entrepreneurship Theory and Practice, 33, 1169-1191.
62.
Le Breton-MillerI.MillerD.LesterR. H. (2011). Stewardship or agency? A social embeddedness reconciliation of conduct and performance in public family businesses. Organization Science, 22, 704-721.
63.
LevineJ. M.MorelandR. (1998). Small groups. In GilbertD. T.FiskeS. T.LindzeyG. (Eds.), The handbook of social psychology (Vol. 2, pp. 415-469). New York, NY: McGraw-Hill.
64.
LindJ. T.MehlumH. (2010). With or without U?—The appropriate test for a U-shaped relationship. Oxford Bulletin of Economics and Statistics, 72, 109-118.
65.
LingY.KellermannsF. (2010). The effects of family firm specific sources of TMT diversity: The moderating role of information exchange frequency. Journal of Management Studies, 47, 322-344.
66.
LubatkinM. H.LingY.SchulzeW. S. (2007). An organizational justice-based view of self-control and agency costs in family firms. Journal of Management Studies, 44, 955-971.
67.
LubatkinM. H.SchulzeW. S.LingY.DinoR. N. (2005). The effects of parental altruism on the governance of family-managed firms. Journal of Organizational Behavior, 26, 313-330.
68.
MartinezJ. I.StöhrB. S.QuirogaB. F. (2007). Family ownership and firm performance. Evidence from public companies in Chile. Family Business Review, 20, 83-94.
69.
MathieuE.StrasslerP.PearlN. (2010). Finding and retaining the right advisor for a family and its family office. Journal of Wealth Management, 13(3), 15-18.
70.
MazzolaP.SciasciaS.KellermannsF. W. (2012). Non-linear effects of family sources of power on performance. Journal of Business Research, 66, 568-574.
71.
MelinL.NordqvistM. (2007). The reflexive dynamics of institutionalization: The case of the family business. Strategic Organization, 5, 321-333.
72.
MillerD.Le Breton-MillerI. (2005). Managing for the long run: Lessons in competitive advantage from great family businesses. Boston, MA: Harvard Business School Press.
73.
MillerD.Le Breton-MillerI.ScholnickB. (2008). Stewardship vs. stagnation: An empirical comparison of small family and non-family businesses. Journal of Management Studies, 45, 51-78.
74.
MillerD.Le Breton-MillerI.LesterR. H.CannellaA. A. (2007). Are family firms really superior performers?Journal of Corporate Finance, 13, 829-858.
75.
MillerD.MinichilliA.CorbettaG. (2013). Is family leadership always beneficial?Strategic Management Journal, 27, 1-18.
76.
MuellerJ. S. (2012). Why individuals in larger teams perform worse. Organizational Behavior and Human Decision Processes, 117, 111-124.
77.
OlsonP. D.ZuikerV. S.DanesS. M.StaffordK.HeckR. K.DuncanK. A. (2003). The impact of the family and the business on family business sustainability. Journal of Business Venturing, 18, 639-666.
78.
PengM. W.JiangY. (2010). Institutions behind family ownership and control in large firms. Journal of Management Studies, 47, 253-273.
79.
PieperT. M.KleinS. B.JaskiewiczP. (2008). The impact of goal alignment on board existence and top management team composition: Evidence from family-influenced businesses. Journal of Small Business Management, 46, 372-394.
80.
ReayT. (2009). Family business meta-identity, institutional pressures and ability to respond to entrepreneurial opportunities. Entrepreneurship Theory and Practice, 33, 1265-1270.
81.
ReayT.PearsonA. W.DyerW. G. (2013). Advising family enterprise: Examining the role of family firm advisors. Family Business Review, 26, 209-214.
82.
SalvatoC.CorbettaG. (2013). Transitional leadership of advisors as a facilitator of successors’ leadership construction. Family Business Review, 26, 235-255.
83.
SalvatoC.ChiricoF.SharmaP. (2010). A farewell to the business: Championing exit and continuity in entrepreneurial family firms. Entrepreneurship & Regional Development, 22, 1-28.
84.
SasabuchiS. (1980). A test of a multivariate normal mean with composite hypotheses determined by linear inequalities. Biometrika, 67, 429-439.
85.
SchulzeW. S.LubatkinM. H.DinoR. N.BuchholtzA. K. (2001). Agency relationships in family firms: Theory and evidence. Organization Science, 12, 99-116.
86.
SharmaP. (2004). On overview of the field of family business studies: Current status and directions for future. Family Business Review, 17, 1-36.
87.
SirmonD. G.HittM. A. (2003). Managing resources: Linking unique resources, management and wealth creation in family firms. Entrepreneurship Theory and Practice, 27(4), 339-358.
88.
SonfieldM. C.LussierR. N. (2004). First-, second-, and third-generation family firms: A comparison. Family Business Review, 17, 189-202.
89.
StaatsB. R.MilkmanK. L.FoxC. R. (2012). The team scaling fallacy: Underestimating the declining efficiency of larger teams. Organizational Behavior and Human Decision Processes, 118, 132-142.
90.
SteinerI. D. (1972). Group process and productivity. New York, NY: Academic Press.
91.
StrikeV. M. (2012). Advising the family firm. Reviewing the past to build the future. Family Business Review, 25, 156-177.
92.
StrikeV. M. (2013). The most trusted advisor and the subtle advice process in family firms. Family Business Review, 26, 293-313.
93.
TabachnickB. G.FidellL. S. (1996). Using multivariate statistics (3rd ed.). New York, NY: HarperCollins.
94.
TagiuriR.DavisJ. A. (1996). Bivalent attributes of the family firm. Family Business Review, 9, 199-208.
95.
UhlanerL. M.KellermannsF. W.EddlestonK. A.HoyF. (2012). The entrepreneuring family: Is it time for a new paradigm?Small Business Economics Journal, 38, 1-11.
96.
van EssenM.CarneyM.GedajlovicE. R.HeugensP. P. M. A. R.van OosterhoutJ. (2011). Do U.S. publicaly-listed faimly firms differ? Does it matter? A meta-analysis (Working Paper). Utrecht, Netherlands: Utrecht University.
97.
von KroghG.Rossi-LamastraC.HaefligerS. (2012). Phenomenon-based research in management and organization science: When is it rigorous and when does it matter?Long Range Planning, 45, 277-298.
98.
WardJ. L. (1997). Growing the family business: Special challenges and best practices. Family Business Review, 10, 323-337.
99.
WaternauxC. M. (1976). Asymptotic distribution of the sample roots for a nonnormal population. Biometrika, 63, 639-645.
100.
WestheadP.HoworthC. (2007). ‘Types’ of private family firm: An exploratory conceptual and empirical analysis. Entrepreneurship & Regional Development, 19, 405-431.
101.
WestheadP.HoworthC.CowlingM. (2002). Ownership and management issues in first generation and multi-generation family firms. Entrepreneurship & Regional Development, 14, 247-269.
102.
ZahraS. A. (2005). Entrepreneurial risk taking in family firms. Family Business Review, 18, 23-40.
103.
ZahraS. A.NeubaumD. O.LarranetaB. (2007). Knowledge sharing and technological capabilities: The moderating role of family involvement. Journal of Business Research, 60, 1070-1079.
104.
ZahraS. A.NielsenA. P. (2002). Sources of capabilities, integration and technology commercialization. Strategic Management Journal, 23, 377-398.
105.
ZellwegerT. M.KellermannsF. W.ChrismanJ. J.ChuaJ. H. (2012). Family control and family firm valuation by family CEOs: The importance of intentions for transgenerational control. Organization Science, 23, 851-868.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
