Family Business Performance and Succession

Family businesses — firms in which a founding family retains significant ownership or control across generations — account for a substantial share of economic output worldwide, yet they operate under pressures that purely managerial firms do not face, including the entanglement of family relationships, emotional attachments to the enterprise, and the challenge of transferring leadership without losing the trust and tacit knowledge that made the firm successful. Researchers study how these dynamics shape everything from risk tolerance and innovation to corporate governance and the willingness to expand internationally, often drawing on concepts like socioemotional wealth — the idea that family owners value control, identity, and legacy alongside financial returns — and agency theory, which examines how interests diverge between owners, managers, and family members. A central open question is how families can structure succession to preserve performance and cohesion when the founder steps aside, given that transitions routinely trigger conflict, talent loss, and strategic drift. Active work is also exploring how social capital built through family ties and community embeddedness either enables or constrains growth, and whether the governance arrangements that protect family firms in stable environments become liabilities when markets demand rapid change.

Works

64,225

Total citations

669,281

Keywords

Family FirmsSocioemotional WealthAgency RelationshipsEntrepreneurshipSuccession PlanningCorporate Governance