The family as a group: implications for governance and organizational performance in family firms

The main goal of family business studies is to explain the difference between family andnon‐family firm . Scholars commonly agree that the idiosyncratic variable that differentiatesthe family form the non‐family business is the family. However, neoclassic models andtheories that solely consider economic issue cannot adequately explain how the entity of thefamily influences the effectiveness of the business. In order to explore the superiorperformance of family firms, we propose a behavioural perspective and suggest that groupprocesses can explain how family dynamics affect the success of the family business.Specifically, we utilize Marks, Mathieu, and Zaccaro (2001) conceptual model describingteam processes to explore how the family characteristics could serve as input into teamprocess to produce superior outcomes. First, we explain why family should be considered asa group. Second, we examine how factors such as family tradition, family interdependency,commitment, altruism, and need of harmony influence the organizational performance. Wethen explain how the family characteristics are mediated by team process such as conflict,motivation, confidence, and management to influence business outcomes. In turn, thesefamily team process suggest that how the family behaves is the key factor in explainingfamily businesses superior performance, at the governance and the organizational levels.