The impact of intra-group processes on family business success

Abstract

Interpersonal ties and intra-group processes influence the ability of people to work together effectively as teams. In the context of the family business team, intra-group processes describe the interaction that takes place between the family members and the resultant psychological climate that exists in the family business. Given the increasing number of sibling teams among family businesses, as well as the challenges they face as team members, this study focuses on sibling teams in family businesses and the intra-group processes that influence their success. The primary objective of this study is to identify and empirically test the intragroup processes influencing the effectiveness of sibling partnerships. A structured questionnaire was distributed to 1323 sibling partner respondents. The respondents were identified by means of a convenience snowball sampling technique, and the data were collected from 371 usable questionnaires. The empirical findings of this study show that the sibling relationship and fairness are important determinants of sibling team effectiveness.

What Do We Know About Business Families? Setting the Stage for Leveraging Family Science Theories

“…Avloniti et al (2014) theorized that negative parental attitudes and behaviors during siblings’ upbringing, perceptions of unfairness by children, frequent parental interference in children’s conflict resolution, and differences among siblings lead to lower quality sibling relationships that ultimately harm succession. Their theory is largely consistent with Farrington et al’s (2011) study of 371 family business siblings, wherein better overall sibling relationships relate to improved financial performance and siblings’ sense of fair treatment by parents relates to higher firm growth. Children also have roles as prospective successors.…”

“…At the next level of abstraction are configuration-level linking constructs , which define the specific configuration of family members who are involved in the business. These might be “copreneurs” (i.e., romantic couples) (e.g., Barnett & Barnett, 1988), female leaders (e.g., Remery, Matser, & Hans Flören, 2014), father–son or father–daughter teams (e.g., Haberman & Danes, 2007), or siblings (e.g., Farrington et al, 2011). Studies that draw on configuration-level linking constructs investigate how particular configurations of family members manage the firm.…”

“…The likelihood of deviant behavior by the child is affected by their status (in-group vs. out-group) and the extent of parental altruism. Farrington, Venter, and Boshoff (2011) Structural equation modeling analyzing survey data from 371 siblings…”

Structuring effective copreneurial teams

“…Furthermore, this finding suggests that the structural-based elements investigated in this study do not influence the satisfaction levels of spouses indirectly through the Financial performance and the Growth performance of the business. As in the case of several other studies (Farrington, Venter & Boshoff, 2011;Brigham & Daves, 2007), a significant positive relationship exists between the Growth performance and the Financial performance of the business. The more the business experiences growth, the more likely is the perception among the copreneurs that the business will perform financially.…”