Actual and Intended Growth in Family Firms and Non-Family Owned Firm: Are They Different?

Saridakis, G., Lai, Y., Muñoz Torres, R.I. and Mohammed, A.M. 2018. Actual and Intended Growth in Family Firms and Non-Family Owned Firm: Are They Different? Journal of Organizational Effectiveness: People and Performance. 5 (1), pp. 2-21. doi:10.1108/JOEPP-04-2017-0033

TitleActual and Intended Growth in Family Firms and Non-Family Owned Firm: Are They Different?
TypeJournal article
AuthorsSaridakis, G., Lai, Y., Muñoz Torres, R.I. and Mohammed, A.M.
Abstract

Purpose
Drawing on motivation theory and family business literature, we investigate the influence of family effect in growth behavior of small-and-medium-sized enterprises (SMEs) in the UK.

Design/methodology/approach
We first compare the actual and expected growth of family and non-family-owned SMEs. We then compare the growth behaviour of small family firms managed by owner-directors and small family businesses co-managed by family and non-family directors with the non-family-owned SMEs.

Findings
We find a negative effect of family ownership on actual and intended small business growth behaviors. In addition, our findings also suggest that small family firms co-managed by non-family and family directors are no different from non-family owned firms, in terms of reporting past actual growth in employment size and turnover as well as expecting growth in workforce size and turnover. We also observe a significant difference in anticipating sales growth between family-controlled and non-family-controlled firms. However, this difference is not explained by the heterogeneity of a top management team.

Practical implications
The study has important implications for managerial practice to family firms and on policies that improve the growth of SMEs. Specifically, the competence of managers and decision-makers matters considerably in evaluating the efficient operation of the business and maximising economic growth in SMEs.

Originality/value
The study makes two important theoretical contributions to small business growth literature. Firstly, our findings underline a negative family effect in the actual and expected growth behaviour of SMEs. Secondly, the mode of family ownership alone may not sufficiently capture family effect and offer a thorough understanding of growth behaviour in SMEs.

KeywordsSMEs, Family ownership, Family firms, Firm growth, Owner-management structure
Article number602747
JournalJournal of Organizational Effectiveness: People and Performance
Journal citation5 (1), pp. 2-21
ISSN2051-6614
Year2018
PublisherEmerald
Accepted author manuscript
Digital Object Identifier (DOI)doi:10.1108/JOEPP-04-2017-0033
Publication dates
Published in print2018
Published online05 Dec 2017
Published05 Dec 2017

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