Family-Owned Home Businesses: Their Employees and Unpaid Helpers

Abstract

Family‐owned home‐based businesses traditionally utilize a workforce of paid workers, contracting workers, and unpaid helpers. Each type of worker may be categorized as family, related, or unrelated. The research reported here shows that not all worker types increase business outputs. Family workers, family helpers, and unrelated workers contribute in positive ways to business outputs. In contrast, unpaid related helpers decrease net income, and contracting related workers increase the work hours of the business owner.

Strategic Management of the Family Business: Past Research and Future Challenges

“…By contrast, in a study of home-based business workers, Heck and Walker (1993) discover that family members and unrelated workers are more productive than related workers (e.g., cousins). They warn that relatives who depend on family ties for employment could be the least competent.…”

Ownership, organization, and private firms' efficient use of resources

“…With respect to adverse selection, due to relational contracting and peculiar risk-performance associations (Gomez-Mejia et al, 2001: 81), the labor market is less efficient for private firms than for public companies in attributing performance-based wages, compensation (Heck and Walker, 1993), and internal promotion (Williamson, Wachter, and Harris, 1975: 272). As a consequence, individual attribution of performance is subject to interpretation (Ouchi, 1980: 135).…”

Does family employment enhance MSEs performance?

“…However, with few exceptions (e.g., Baines and Wheelock, 1998;Heck and Walker, 1993;Kirchhoff and Kirchhoff, 1987), there has been little theoretical discussion or empirical analysis about how the decision to hire relatives affects the performance of MSEs.…”