The Effects of Commitment of Non-Family Employees of Family Firms from the Perspective of Stewardship Theory

Abstract

Although commitment is one of the attributes of family firms of continuing interest to researchers, they almost always study it from the perspective of the owning family. In the current work, we analyze the commitment of the non-family employees. We propose a model of commitment, with the aim of studying the implications that this variable may have for family businesses. We study both the aspects on the basis of the approaches of Meyer and Allen's three-component model of organizational commitment and stewardship theory. Results show that the identification level of nonfamily employees positively and significantly influences the profitability and the survival or continuity of familyowned businesses. At the same time that their involvement level positively and significantly influences the survival or continuity of family-owned businesses.

Are Family Firms Good Employers?

“…Family firm employees typically earn less, receive less training that might enhance the value of their human capital, and, apparently, voluntarily leave employment at higher rates than those employed by nonfamily firms. Second, our data lend only limited support to the assertion that family firms exhibit lower dismissal rates than nonfamily firms (Block, 2010;Sraer & Thesmar, 2007;van Essen, Strike, Carney, & Sapp, 2015), and in cases where they differ, the effect sizes are small. Notions that family firm employees trade lower wages against a higher job security (Bassanini et al, 2013) may therefore be misplaced.…”

“…In contrast, the notion that stewardship prevails in family firms was primarily tested using cross-sectional surveys of small to medium-sized private firms (Craig & Dibrell, 2006;Eddleston et al, 2012;Zahra, 2003). This stream of stewardship research tends to focus on organizational and strategic dimensions of family firm conduct and relies on subjective measures like commitment (Vallejo, 2009), corporate entrepreneurship (Eddleston et al, 2012), organizational climate (Neubaum et al, 2017), strategic flexibility (Zahra et al, 2008), innovativeness (Craig & Dibrell, 2006), and entrepreneurial behavior of employees (Sieger, Zellweger, & Aquino, 2013). As a result, Neubaum et al (2017) argue that past stewardship research has been overly reliant on measures that capture only a subset of potential variables that stewardship might influence.…”

“…Since stewardship is intrinsically motivated by an attitude of service toward others, it should manifest in practices that support employee welfare. For example, Arregle et al (2007) observe that family stewardship supports the development of a corporate culture marked by loyalty, informality, and reciprocity, and promotes a greater sense of identification with both the firm and family (Vallejo, 2009;Zahra et al, 2008). When individuals identify with their organization, they more readily engage in cooperative, altruistic, and unrewarded citizenship behaviors and are motivated by service to others, not merely self-interest (Jaskiewicz et al, 2017;Zellweger et al, 2013).…”

Harmony, Justice, Confusion, and Conflict in Family Firms: Implications for Ethical Climate and the “Fredo Effect”

“…Shared values within the family firm, which influence trust levels, goals, and other elements of organizational behavior, reflect the values of the family owners (Vallejo 2009). Vallejo (2008, p. 271) proposed that the family firm's leaders ''must establish the basis for ensuring an evolution and an organized and non-traumatic transfer to the following generation, as well as the strategy and organization allowing for growth, development, and the parallel expansion of the business.''…”

Constrictive vs. distinctive familiness and the culturing of familiness capital (FamCap)

“…When employees observe the devotion and dedication of the leaders in the family business, they are inclined to show greater commitment (Zahra et al, 2008) leading to identity confirmation (Klein, 2008). The identity confirmation of non-family employees has a significant positive relationship with the profitability and success of family firms (Vallejo, 2009). …”