Olivier Colot

Performance implications of manager entrenchment in family firms

Numerous studies analyzing family firms have tried to explain their outperformance by diverse contractual and relational theories. However, the effect of entrenchment reveals ambiguous findings. Whereas several scholars underline the negative influence of entrenchment in family firms, others propose a positive approach resulting from the superiority of family firms in terms of efficiency. The purpose of this paper is thus to understand the impact of entrenchment within family firms acting in a specific institutional context. To determine whether entrenchment is significant, a 7-items scale is used. Based on data collected on the French stock market (SBF 120), we distinguish between family firms where the likelihood of entrenchment is high and those characterized by lower level of entrenchment. Our results show that family firms displaying higher level of entrenchment outperform (ROA, Gross Sales Margin and ROE), thereby confirming that managers in family firms are more likely to act as stewards of the organization.

Influence des caractéristiques propres aux entreprises familliales et à leurs dirigeants sur la performance : une étude basée sur les entreprises belges

Résumé Le but de notre recherche est de déterminer si des caractéristiques propres aux entreprises familiales et à leurs dirigeants jouent un rôle dans la performance. Une enquête, réalisée auprès de 2000 entreprises, a permis d’identifier 312 entreprises familiales et de collecter des informations les concernant. Des régressions multiples ont été mises en oeuvre afin d’expliquer la performance de l’entreprise par le biais des variables propres aux entreprises familiales et à leurs dirigeants. Le modèle testé, à la fois sur la rentabilité économique et sur la rentabilité financière, nous tend à confirmer une certaine forme d’enracinement des dirigeants, et ce, sur les trois années étudiées.

EFFECTS OF HUMAN RESOURCE PRACTICES ON FAMILY FIRMS SOCIAL PERFORMANCE

The aim of our research is to analyse social performance (through turnover rate) of large family owned business in relation to their human resource practices. We made multiple regressions on a sample of 60 large firms. Our global model, considering large family owned business and non-family owned business, shows that part-time contracts increase turnover significantly, while training reduces it. We observe the same relation when we analyse family owned business specifically where we also note that to belong to the trade sector influences turnover significantly. When we consider non-family owned business on the other hand, then variables like pay, training, firm’s age and services or building sectors tend to affect turnover significantly.

DO FAMILY FIRMS PERFORM BETTER: A BELGIAN SURVEY

A large conceptual economic literature presents assumptions that family owned and controlled firms perform better than others, essentially on the basis of agency theory, ownership structure, cultural specificities and particular management practices. Large empirical evidence has been supplied by various studies, even if there are still contradictory debates. This paper uses the paired samples methodology to compare operational, economic and financial profitabilities of Belgian family firms. Evidence is given that they perform better, and this significantly for economic profitability. Discussion is engaged about the contribution of family values and practices to their