This study examines factors that influence satisfaction with the succession process in family firms. The authors test a model proposed by Sharma et al. (2001) regarding five key factors: (1) the incumbent's propensity to step aside, (2) the successor's willingness to take over, (3) agreement among family members to maintain family involvement, (4) acceptance of individual roles, and (5) succession planning.
Data was collected from incumbent presidents and successors in family firms. Results show the two groups disagreed on aspects of the succession process and family firm attributes. Incumbents were more satisfied and believed they were ready to step aside, while successors disagreed. Regression results found agreement on the importance of succession planning
This document summarizes a research paper that explored factors influencing perceptions of work-life balance among owners of copreneurial firms, or couples who jointly own and manage a business. The researchers surveyed 210 copreneurial couples about their perceptions of work-life balance, work-life conflict, job characteristics, communication practices, and spousal support. They found that work-life conflict was negatively related to perceptions of work-life balance, while job involvement, flexibility at work, and open communication positively influenced perceptions of work-life balance. Interestingly, spousal support directly influenced perceptions of work-life balance but not perceptions of life-work balance.
Relationship between performance appraisal politics, organizational commitmen...Alexander Decker
This document summarizes a study examining the relationship between performance appraisal politics, organizational commitment, and turnover intention. The study was conducted in the pharmaceutical industry in Pakistan. Data was collected through questionnaires from 10 companies, with a 90% response rate. The study found that perceptions of political motives in performance appraisals were negatively related to organizational commitment and positively related to turnover intention. Organizational commitment was also found to be negatively related to turnover intention.
This document summarizes a research study that analyzed the impact of organizational justice on employee turnover at TOTAL E&P Yemen (TEPY), the largest oil and gas company in Yemen. The study examined how employees' perceptions of distributive justice, procedural justice, and interactional justice affected their job satisfaction, organizational commitment, and turnover intentions. A questionnaire was distributed to 183 TEPY employees in Yemen. The findings indicated that higher perceptions of organizational justice led to increased employee satisfaction and commitment, and reduced turnover intentions. Specifically, procedural justice had the strongest influence on commitment and turnover intentions, while distributive justice most influenced job satisfaction. The conclusions recommend that TEPY managers promote fairness to benefit both employees and the organization.
Corporate social-and-financial-performance-an-extended-stakeholder-theory-and...Jan Ahmed
This document summarizes a research article that empirically analyzes the relationship between corporate social performance (CSP) and corporate financial performance (CFP). The study extends stakeholder theory by considering stakeholder heterogeneity and incorporating insights from prospect theory. It analyzes a panel dataset of S&P 500 companies from 1997-2002 that includes disaggregated measures of CSP. The study finds that a reputation for CSP is more strongly related to CFP for secondary stakeholders than primary stakeholders. It also finds that the negative impact of bad CSP on CFP is larger than the positive impact of good CSP, due to prospect theory's concept of losses looming larger than gains. The study contributes to research by taking a more nuanced view of how different
This study examined the relationship between employee commitment and organizational citizenship behavior in Nepalese companies. A survey was administered to 340 employees across five companies. The results showed that affective commitment and normative commitment were positively related to both factors of organizational citizenship behavior - altruism and compliance. Continuance commitment was not significantly related to altruism or compliance. The findings imply that affectively and normatively committed employees are more likely to exhibit organizational citizenship behaviors that benefit coworkers and the organization, while continuance commitment does not influence such extra-role behaviors. Overall, the study found employee commitment, especially affective and normative commitment, can promote organizational citizenship behavior in Nepalese workplaces.
Workforce engagement: What it is, what drives it, and why it matters for orga...Andrea Kropp
This research article examines workforce engagement at the organizational level across 102 publicly traded companies. The researchers define workforce engagement as the aggregate work engagement experiences of individual employees in an organization. They hypothesize and find that workforce engagement significantly predicts organizational financial and customer metrics 1-2 years later, after controlling for industry. Additionally, they find that organizational practices, supervisory support, and work attributes are significant drivers of workforce engagement, and that workforce engagement mediates the relationship between these drivers and organizational performance. The study contributes to research on employee engagement by examining outcomes at the organizational level across diverse industries, using a predictive design, and investigating antecedents of and mediators in the workforce engagement-performance relationship.
11.isea vol 0004www.iiste.org call for paper no 1 pp. 40-64Alexander Decker
This study aims to investigate whether contextual variables moderate the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP) under slack resource theory and good management theory. The study examines 220 manufacturing companies in Indonesia. Two regression models were developed to analyze how business environment, business strategy, organizational structure, and control systems impact the CSR-CFP relationship. The findings show that business environment moderates the CSR-CFP link under good management theory. Decentralization moderates the CSR-CFP link under slack resource theory. Reliance on a combination of diagnostic and interactive control systems also moderates the CSR-CFP link based on slack resource theory.
This document describes a study that examines how different "regulatory focus characters" moderate the relationship between job satisfaction and organizational commitment. The study develops a conceptual framework based on regulatory focus theory that proposes four regulatory focus characters: Achiever, Conservative, Rationalist, and Indifferent. The study hypothesizes that these characters will differentially moderate the relationship between extrinsic job satisfaction and two types of organizational commitment (continuance commitment and normative commitment), and that this moderation will differ between the private and public sectors. Regression analyses will test whether the relationships between extrinsic satisfaction and commitment are stronger for Conservatives and Rationalists compared to the other characters. The findings could help organizations understand how personality impacts attitudes to better manage employee commitment
This document summarizes a research paper that explored factors influencing perceptions of work-life balance among owners of copreneurial firms, or couples who jointly own and manage a business. The researchers surveyed 210 copreneurial couples about their perceptions of work-life balance, work-life conflict, job characteristics, communication practices, and spousal support. They found that work-life conflict was negatively related to perceptions of work-life balance, while job involvement, flexibility at work, and open communication positively influenced perceptions of work-life balance. Interestingly, spousal support directly influenced perceptions of work-life balance but not perceptions of life-work balance.
Relationship between performance appraisal politics, organizational commitmen...Alexander Decker
This document summarizes a study examining the relationship between performance appraisal politics, organizational commitment, and turnover intention. The study was conducted in the pharmaceutical industry in Pakistan. Data was collected through questionnaires from 10 companies, with a 90% response rate. The study found that perceptions of political motives in performance appraisals were negatively related to organizational commitment and positively related to turnover intention. Organizational commitment was also found to be negatively related to turnover intention.
This document summarizes a research study that analyzed the impact of organizational justice on employee turnover at TOTAL E&P Yemen (TEPY), the largest oil and gas company in Yemen. The study examined how employees' perceptions of distributive justice, procedural justice, and interactional justice affected their job satisfaction, organizational commitment, and turnover intentions. A questionnaire was distributed to 183 TEPY employees in Yemen. The findings indicated that higher perceptions of organizational justice led to increased employee satisfaction and commitment, and reduced turnover intentions. Specifically, procedural justice had the strongest influence on commitment and turnover intentions, while distributive justice most influenced job satisfaction. The conclusions recommend that TEPY managers promote fairness to benefit both employees and the organization.
Corporate social-and-financial-performance-an-extended-stakeholder-theory-and...Jan Ahmed
This document summarizes a research article that empirically analyzes the relationship between corporate social performance (CSP) and corporate financial performance (CFP). The study extends stakeholder theory by considering stakeholder heterogeneity and incorporating insights from prospect theory. It analyzes a panel dataset of S&P 500 companies from 1997-2002 that includes disaggregated measures of CSP. The study finds that a reputation for CSP is more strongly related to CFP for secondary stakeholders than primary stakeholders. It also finds that the negative impact of bad CSP on CFP is larger than the positive impact of good CSP, due to prospect theory's concept of losses looming larger than gains. The study contributes to research by taking a more nuanced view of how different
This study examined the relationship between employee commitment and organizational citizenship behavior in Nepalese companies. A survey was administered to 340 employees across five companies. The results showed that affective commitment and normative commitment were positively related to both factors of organizational citizenship behavior - altruism and compliance. Continuance commitment was not significantly related to altruism or compliance. The findings imply that affectively and normatively committed employees are more likely to exhibit organizational citizenship behaviors that benefit coworkers and the organization, while continuance commitment does not influence such extra-role behaviors. Overall, the study found employee commitment, especially affective and normative commitment, can promote organizational citizenship behavior in Nepalese workplaces.
Workforce engagement: What it is, what drives it, and why it matters for orga...Andrea Kropp
This research article examines workforce engagement at the organizational level across 102 publicly traded companies. The researchers define workforce engagement as the aggregate work engagement experiences of individual employees in an organization. They hypothesize and find that workforce engagement significantly predicts organizational financial and customer metrics 1-2 years later, after controlling for industry. Additionally, they find that organizational practices, supervisory support, and work attributes are significant drivers of workforce engagement, and that workforce engagement mediates the relationship between these drivers and organizational performance. The study contributes to research on employee engagement by examining outcomes at the organizational level across diverse industries, using a predictive design, and investigating antecedents of and mediators in the workforce engagement-performance relationship.
11.isea vol 0004www.iiste.org call for paper no 1 pp. 40-64Alexander Decker
This study aims to investigate whether contextual variables moderate the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP) under slack resource theory and good management theory. The study examines 220 manufacturing companies in Indonesia. Two regression models were developed to analyze how business environment, business strategy, organizational structure, and control systems impact the CSR-CFP relationship. The findings show that business environment moderates the CSR-CFP link under good management theory. Decentralization moderates the CSR-CFP link under slack resource theory. Reliance on a combination of diagnostic and interactive control systems also moderates the CSR-CFP link based on slack resource theory.
This document describes a study that examines how different "regulatory focus characters" moderate the relationship between job satisfaction and organizational commitment. The study develops a conceptual framework based on regulatory focus theory that proposes four regulatory focus characters: Achiever, Conservative, Rationalist, and Indifferent. The study hypothesizes that these characters will differentially moderate the relationship between extrinsic job satisfaction and two types of organizational commitment (continuance commitment and normative commitment), and that this moderation will differ between the private and public sectors. Regression analyses will test whether the relationships between extrinsic satisfaction and commitment are stronger for Conservatives and Rationalists compared to the other characters. The findings could help organizations understand how personality impacts attitudes to better manage employee commitment
the relationship between normative commitment (one form of organizational commitment) and loyal boosterism (one construct of organizational citizenship behaviours)
This study aims to examine the relationship between an organization's ethical climate and job satisfaction, organizational commitment, and turnover intention among salespeople. The researcher plans to survey salespeople from 20 sales and marketing companies in Islamabad and Rawalpindi. Correlation and regression analysis will be used to analyze the relationships between ethical climate, job satisfaction, organizational commitment, and turnover intention. The researcher hypothesizes that ethical climate will positively relate to job satisfaction and organizational commitment, and negatively relate to turnover intention. Additionally, job satisfaction will positively relate to organizational commitment, and organizational commitment will negatively relate to turnover intention.
Craig, Russell J. and Brennan, Niamh M. [2012] An Exploration of the Relation...Prof Niamh M. Brennan
This paper proposes a taxonomy to assist in more clearly locating research on aspects of the association between corporate reputation and corporate accountability reporting. We illustrate how our proposed taxonomy can be applied by using it to frame our exploration of the relationship between measures of reputation and characteristics of the language choices made in CEO letters to shareholders. Using DICTION 5.0 software we analyse the content of the CEO letters of 23 high reputation US firms and 23 low reputation US firms. Our results suggest that company size and visibility each have a positive influence on the extent to which corporate reputation is associated with the language choices made in CEO letters. These results, which are anomalous when compared with those of Geppert and Lawrence (2008), highlight the need for caution when assessing claims about the effects on corporate reputation arising from the language choice in narratives in corporate annual reports.
This document provides an overview of key concepts in perceived organizational support (POS) literature. It discusses POS as employees' perceptions that their organization values their contributions and cares about their well-being. High POS is associated with beneficial outcomes like improved performance, commitment, and reduced withdrawal behaviors. The document reviews literature on antecedents and consequences of POS. It also discusses how POS relates to constructs like supervisor support, organizational justice, and reciprocity norms. Counterproductive work behaviors and their costs are also briefly introduced.
Perceived organizational justice and employees’ organizational citizenship be...Alexander Decker
This document reports on a study that investigated the relationship between employees' perceptions of organizational justice (including distributive, procedural, and interactional justice) and organizational citizenship behavior (OCB) in Ghana. The study surveyed 147 employees across 13 insurance companies in Ghana. Results found a significant positive relationship between overall organizational justice perceptions and OCB. Additionally, interactional justice, which involves respectful treatment of employees, was found to account for more variance in OCB and have a stronger relationship than distributive and procedural justice dimensions in the Ghanaian context. This provides insights for human resources professionals in Ghana that promoting interactional justice may better encourage employees to engage in extra-role citizenship behaviors.
This study examines the relationship between perceptions of organizational politics and employee attitudes, strain, and behavior through a meta-analysis. The meta-analysis found that perceptions of organizational politics were significantly related to increased strain, turnover intentions, job satisfaction, affective commitment, task performance, and organizational citizenship behaviors. Additionally, work attitudes were found to mediate the effects of perceived politics on turnover intentions, and attitudes and strain mediated the effects on performance. Perceptions of organizational politics appear to represent a unique stressor for employees.
This document summarizes a research paper that studied the relationship between employees' perceptions of organizational politics and their performance, with the mediating role of social exchange perceptions. The study collected survey responses from over 1,000 employees across organizations in Pakistan. Structural equation modeling was used to analyze the data. The results showed that perceptions of social exchange fully mediate the relationship between perceptions of organizational politics and employees' performance. Perceptions of unfair politics can harm the social exchange relationship between employees and their organization and negatively impact performance.
The link between job satisfaction and organizational commitmentYannis Markovits
This article examines the relationship between job satisfaction and organizational commitment for public and private sector employees. It reviews literature showing private sector employees generally report higher extrinsic job satisfaction than public sector employees due to differences in rewards. However, intrinsic satisfaction can be high for both. Studies also show mixed results for differences in organizational commitment between sectors. The article hypothesizes that job satisfaction will be more strongly related to organizational commitment for public sector versus private sector employees, especially for affective and normative commitment. It analyzes survey data from 617 Greek employees to test this.
This document summarizes a research paper that investigates the relationship between human resource management (HRM) practices and the performance of 101 foreign-owned subsidiaries in Russia. The study finds support for the idea that investments in HRM practices can help firms perform better. It also finds that different HRM practices for managers versus non-managers are related to firm performance. However, the study finds only limited support for the idea that aligning HRM practices with firm strategy improves performance. The study aims to contribute to understanding how HRM impacts subsidiary performance in transition economies like Russia.
This study investigated the relationship between macroeconomic uncertainty, corporate governance, and changes in firms' financial leverage. The researchers hypothesized that both macroeconomic uncertainty and corporate governance would significantly impact firms' financing decisions. Using data on over 1,000 US manufacturing firms from 1990-2006, the study found that both macroeconomic uncertainty and measures of corporate governance, such as governance indexes, influenced how firms adjusted their leverage over time. In particular, there were interaction effects between uncertainty and governance, such that the impact of one factor depended on the level of the other. The findings supported the conclusion that considering both macroeconomic conditions and corporate governance is important for understanding determinants of corporate capital structure decisions.
Concentrated share ownership and financial performance of listed companies in...Alexander Decker
This document summarizes a research study that examined the effect of share ownership concentration on the financial performance of listed companies in Ghana. The study used panel data regression analysis to measure performance using Tobin's Q and return on assets, and analyzed the relationship between these performance metrics and ownership concentration, institutional ownership, and insider ownership. The results found statistically significant relationships, suggesting that concentrated ownership, institutional ownership, and insider ownership are positively associated with higher financial performance of companies on the Ghana Stock Exchange. The study concludes that Ghanaian ownership is heavily concentrated and that concentrated structures should be encouraged to improve monitoring and performance.
11.concentrated share ownership and financial performance of listed companies...Alexander Decker
This document summarizes previous research on the relationship between concentrated share ownership and financial performance of listed companies. It discusses how agency theory suggests that concentrated ownership can improve performance by reducing agency costs through increased monitoring of managers. However, other research has found potential negative effects of concentrated ownership through manager entrenchment. The document reviews mixed findings in previous empirical studies conducted primarily in developed countries. It argues there is a need for more research in emerging markets like Ghana due to differences in business contexts. The main objective of the study described is to analyze the relationship between share concentration and performance of listed firms on the Ghana Stock Exchange.
Organizational Commitment: A Comparative Study of Public and Private Sector B...inventionjournals
In spite of an increasing number of studies on organizational commitment, no unifying work focused on the measurement of organizational commitment of managers of banking sector. Organizational commitment is a feeling of one's dedication towards the employing organization, his/her willingness to work hard for that organization, and the intention to remain with that organization. There are various factors that affect the employees' commitment towards the organization. This study was carried out to establish the association of banking sector (public/private) and managerial levels with the organizational commitment among bank employees. Data was collected from 633 managers of banking sector using questionnaire method. Organizational commitment scale developed by Allen and Mayer (1990), was used as a tool for data collection. Regression analysis, t-test and one way ANOVA were used as statistical tools for data analysis. The results from the t-test of the study revealed that the public sector bank managers were more committed towards the organization than the private sector bank managers. The affective, continuance and normative commitment are high in public sector bank managers than private sector bank managers. Also, the ANOVA-test revealed that the top levels managers had the highest organizational commitment than the middle and the lower level managers. The affective, continuance and normative commitment of top level bank managers are higher than the middle and lower level managers. The t-test analysis results also, revealed that organizational commitment, affective commitment, continuance commitment of middle level bank managers is higher and significant than that of lower level bank managers. The difference of normative commitment between middle level and lower level managers is not statistically significant.
This document presents a theoretical framework that integrates insights from agency theory and social psychology to develop a more comprehensive understanding of strategic compensation for nonexecutive employees. The framework argues that while agency theory provides a useful lens, it fails to consider important psychological factors like social comparison and overconfidence that increase costs associated with individual performance-based pay. The framework predicts that firms will rely more on team-based, seniority-based, and flatter compensation strategies to address these higher costs. The paper discusses implications for empirical research and extensions of the integrated theory.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Esssay. Relational vs Transactional psychological contractsDimitrios Kordas
This is an essay, written for the LSE Summer School 2013, focused on the comparison and analysis of transactional and relational, Psychological Contracts (PC) and their intreconnection with different working environments. The author tries to keep a deeper eye on the emerging trend of hiring initially on a transactional contractual basis and later on a relational one. The limited scope and academic requirements constrained a more elaborated view on the causes of psychological contract breach and a wider approach on the several PC models have already been developed. The Harvard model is used as a "map of the HRM territory" (Beer et al., 1984) to depict how the HR-policies can empower the two, examined, psychological contract types.
This study examines the relationship between perceived organizational justice and organizational silence among staff at Khorshid Hospital in Isfahan, Iran. A questionnaire was administered to 236 randomly selected hospital employees. Results of the Pearson correlation showed a positive relationship between perceptions of organizational justice and organizational non-silence, with a correlation of 77%. Additionally, organizational non-silence was found to have a negative correlation with education level but positive correlations with age and job tenure. Perceptions of organizational justice and its dimensions also had negative correlations with education level. The study aims to help hospital managers understand how to improve staff motivation and performance by increasing perceptions of fairness and reducing silence.
The moderating role of organizational tenure on the relationship between orga...Alexander Decker
This document discusses a study that examined the relationship between organizational culture and organizational citizenship behavior (OCB) in Ghana's banking industry, and whether that relationship is moderated by employee organizational tenure. The study found that organizational culture positively predicts OCB. Additionally, organizational tenure moderates the relationship such that employees with longer tenure are more likely to engage in OCB than those with shorter tenure. The findings are consistent with attraction-selection-attrition and human capital theories. The implications for practice and research are discussed.
Empirical stands of business succesion among african owned business asiaJohn Johari
This study examined factors contributing to the longevity of small family firms through generations. 42 CEOs and presidents of multi-generational small family firms responded to a questionnaire. Results identified three key factors: 1) family involvement and commitment, 2) effective succession planning, and 3) maintaining a competitive advantage. A conceptual model was developed based on these findings and previous research to provide insights into reducing the high mortality rate of family firms. Understanding factors contributing to longevity can help develop programs to help more family firms survive across generations.
This document summarizes a study on the perspectives of first-generation educated individuals towards financing their family businesses in Thiruvallur district, Tamil Nadu, India. The study collected primary data through questionnaires from 621 first-generation respondents. The data was analyzed using SPSS software. The results showed that perceptions of globalization and competitive business environment, along with higher education, have reduced interest in taking the risks involved in financing family businesses. Educational attainment provided confidence in alternative career options rather than continuing the family business.
the relationship between normative commitment (one form of organizational commitment) and loyal boosterism (one construct of organizational citizenship behaviours)
This study aims to examine the relationship between an organization's ethical climate and job satisfaction, organizational commitment, and turnover intention among salespeople. The researcher plans to survey salespeople from 20 sales and marketing companies in Islamabad and Rawalpindi. Correlation and regression analysis will be used to analyze the relationships between ethical climate, job satisfaction, organizational commitment, and turnover intention. The researcher hypothesizes that ethical climate will positively relate to job satisfaction and organizational commitment, and negatively relate to turnover intention. Additionally, job satisfaction will positively relate to organizational commitment, and organizational commitment will negatively relate to turnover intention.
Craig, Russell J. and Brennan, Niamh M. [2012] An Exploration of the Relation...Prof Niamh M. Brennan
This paper proposes a taxonomy to assist in more clearly locating research on aspects of the association between corporate reputation and corporate accountability reporting. We illustrate how our proposed taxonomy can be applied by using it to frame our exploration of the relationship between measures of reputation and characteristics of the language choices made in CEO letters to shareholders. Using DICTION 5.0 software we analyse the content of the CEO letters of 23 high reputation US firms and 23 low reputation US firms. Our results suggest that company size and visibility each have a positive influence on the extent to which corporate reputation is associated with the language choices made in CEO letters. These results, which are anomalous when compared with those of Geppert and Lawrence (2008), highlight the need for caution when assessing claims about the effects on corporate reputation arising from the language choice in narratives in corporate annual reports.
This document provides an overview of key concepts in perceived organizational support (POS) literature. It discusses POS as employees' perceptions that their organization values their contributions and cares about their well-being. High POS is associated with beneficial outcomes like improved performance, commitment, and reduced withdrawal behaviors. The document reviews literature on antecedents and consequences of POS. It also discusses how POS relates to constructs like supervisor support, organizational justice, and reciprocity norms. Counterproductive work behaviors and their costs are also briefly introduced.
Perceived organizational justice and employees’ organizational citizenship be...Alexander Decker
This document reports on a study that investigated the relationship between employees' perceptions of organizational justice (including distributive, procedural, and interactional justice) and organizational citizenship behavior (OCB) in Ghana. The study surveyed 147 employees across 13 insurance companies in Ghana. Results found a significant positive relationship between overall organizational justice perceptions and OCB. Additionally, interactional justice, which involves respectful treatment of employees, was found to account for more variance in OCB and have a stronger relationship than distributive and procedural justice dimensions in the Ghanaian context. This provides insights for human resources professionals in Ghana that promoting interactional justice may better encourage employees to engage in extra-role citizenship behaviors.
This study examines the relationship between perceptions of organizational politics and employee attitudes, strain, and behavior through a meta-analysis. The meta-analysis found that perceptions of organizational politics were significantly related to increased strain, turnover intentions, job satisfaction, affective commitment, task performance, and organizational citizenship behaviors. Additionally, work attitudes were found to mediate the effects of perceived politics on turnover intentions, and attitudes and strain mediated the effects on performance. Perceptions of organizational politics appear to represent a unique stressor for employees.
This document summarizes a research paper that studied the relationship between employees' perceptions of organizational politics and their performance, with the mediating role of social exchange perceptions. The study collected survey responses from over 1,000 employees across organizations in Pakistan. Structural equation modeling was used to analyze the data. The results showed that perceptions of social exchange fully mediate the relationship between perceptions of organizational politics and employees' performance. Perceptions of unfair politics can harm the social exchange relationship between employees and their organization and negatively impact performance.
The link between job satisfaction and organizational commitmentYannis Markovits
This article examines the relationship between job satisfaction and organizational commitment for public and private sector employees. It reviews literature showing private sector employees generally report higher extrinsic job satisfaction than public sector employees due to differences in rewards. However, intrinsic satisfaction can be high for both. Studies also show mixed results for differences in organizational commitment between sectors. The article hypothesizes that job satisfaction will be more strongly related to organizational commitment for public sector versus private sector employees, especially for affective and normative commitment. It analyzes survey data from 617 Greek employees to test this.
This document summarizes a research paper that investigates the relationship between human resource management (HRM) practices and the performance of 101 foreign-owned subsidiaries in Russia. The study finds support for the idea that investments in HRM practices can help firms perform better. It also finds that different HRM practices for managers versus non-managers are related to firm performance. However, the study finds only limited support for the idea that aligning HRM practices with firm strategy improves performance. The study aims to contribute to understanding how HRM impacts subsidiary performance in transition economies like Russia.
This study investigated the relationship between macroeconomic uncertainty, corporate governance, and changes in firms' financial leverage. The researchers hypothesized that both macroeconomic uncertainty and corporate governance would significantly impact firms' financing decisions. Using data on over 1,000 US manufacturing firms from 1990-2006, the study found that both macroeconomic uncertainty and measures of corporate governance, such as governance indexes, influenced how firms adjusted their leverage over time. In particular, there were interaction effects between uncertainty and governance, such that the impact of one factor depended on the level of the other. The findings supported the conclusion that considering both macroeconomic conditions and corporate governance is important for understanding determinants of corporate capital structure decisions.
Concentrated share ownership and financial performance of listed companies in...Alexander Decker
This document summarizes a research study that examined the effect of share ownership concentration on the financial performance of listed companies in Ghana. The study used panel data regression analysis to measure performance using Tobin's Q and return on assets, and analyzed the relationship between these performance metrics and ownership concentration, institutional ownership, and insider ownership. The results found statistically significant relationships, suggesting that concentrated ownership, institutional ownership, and insider ownership are positively associated with higher financial performance of companies on the Ghana Stock Exchange. The study concludes that Ghanaian ownership is heavily concentrated and that concentrated structures should be encouraged to improve monitoring and performance.
11.concentrated share ownership and financial performance of listed companies...Alexander Decker
This document summarizes previous research on the relationship between concentrated share ownership and financial performance of listed companies. It discusses how agency theory suggests that concentrated ownership can improve performance by reducing agency costs through increased monitoring of managers. However, other research has found potential negative effects of concentrated ownership through manager entrenchment. The document reviews mixed findings in previous empirical studies conducted primarily in developed countries. It argues there is a need for more research in emerging markets like Ghana due to differences in business contexts. The main objective of the study described is to analyze the relationship between share concentration and performance of listed firms on the Ghana Stock Exchange.
Organizational Commitment: A Comparative Study of Public and Private Sector B...inventionjournals
In spite of an increasing number of studies on organizational commitment, no unifying work focused on the measurement of organizational commitment of managers of banking sector. Organizational commitment is a feeling of one's dedication towards the employing organization, his/her willingness to work hard for that organization, and the intention to remain with that organization. There are various factors that affect the employees' commitment towards the organization. This study was carried out to establish the association of banking sector (public/private) and managerial levels with the organizational commitment among bank employees. Data was collected from 633 managers of banking sector using questionnaire method. Organizational commitment scale developed by Allen and Mayer (1990), was used as a tool for data collection. Regression analysis, t-test and one way ANOVA were used as statistical tools for data analysis. The results from the t-test of the study revealed that the public sector bank managers were more committed towards the organization than the private sector bank managers. The affective, continuance and normative commitment are high in public sector bank managers than private sector bank managers. Also, the ANOVA-test revealed that the top levels managers had the highest organizational commitment than the middle and the lower level managers. The affective, continuance and normative commitment of top level bank managers are higher than the middle and lower level managers. The t-test analysis results also, revealed that organizational commitment, affective commitment, continuance commitment of middle level bank managers is higher and significant than that of lower level bank managers. The difference of normative commitment between middle level and lower level managers is not statistically significant.
This document presents a theoretical framework that integrates insights from agency theory and social psychology to develop a more comprehensive understanding of strategic compensation for nonexecutive employees. The framework argues that while agency theory provides a useful lens, it fails to consider important psychological factors like social comparison and overconfidence that increase costs associated with individual performance-based pay. The framework predicts that firms will rely more on team-based, seniority-based, and flatter compensation strategies to address these higher costs. The paper discusses implications for empirical research and extensions of the integrated theory.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Esssay. Relational vs Transactional psychological contractsDimitrios Kordas
This is an essay, written for the LSE Summer School 2013, focused on the comparison and analysis of transactional and relational, Psychological Contracts (PC) and their intreconnection with different working environments. The author tries to keep a deeper eye on the emerging trend of hiring initially on a transactional contractual basis and later on a relational one. The limited scope and academic requirements constrained a more elaborated view on the causes of psychological contract breach and a wider approach on the several PC models have already been developed. The Harvard model is used as a "map of the HRM territory" (Beer et al., 1984) to depict how the HR-policies can empower the two, examined, psychological contract types.
This study examines the relationship between perceived organizational justice and organizational silence among staff at Khorshid Hospital in Isfahan, Iran. A questionnaire was administered to 236 randomly selected hospital employees. Results of the Pearson correlation showed a positive relationship between perceptions of organizational justice and organizational non-silence, with a correlation of 77%. Additionally, organizational non-silence was found to have a negative correlation with education level but positive correlations with age and job tenure. Perceptions of organizational justice and its dimensions also had negative correlations with education level. The study aims to help hospital managers understand how to improve staff motivation and performance by increasing perceptions of fairness and reducing silence.
The moderating role of organizational tenure on the relationship between orga...Alexander Decker
This document discusses a study that examined the relationship between organizational culture and organizational citizenship behavior (OCB) in Ghana's banking industry, and whether that relationship is moderated by employee organizational tenure. The study found that organizational culture positively predicts OCB. Additionally, organizational tenure moderates the relationship such that employees with longer tenure are more likely to engage in OCB than those with shorter tenure. The findings are consistent with attraction-selection-attrition and human capital theories. The implications for practice and research are discussed.
Empirical stands of business succesion among african owned business asiaJohn Johari
This study examined factors contributing to the longevity of small family firms through generations. 42 CEOs and presidents of multi-generational small family firms responded to a questionnaire. Results identified three key factors: 1) family involvement and commitment, 2) effective succession planning, and 3) maintaining a competitive advantage. A conceptual model was developed based on these findings and previous research to provide insights into reducing the high mortality rate of family firms. Understanding factors contributing to longevity can help develop programs to help more family firms survive across generations.
This document summarizes a study on the perspectives of first-generation educated individuals towards financing their family businesses in Thiruvallur district, Tamil Nadu, India. The study collected primary data through questionnaires from 621 first-generation respondents. The data was analyzed using SPSS software. The results showed that perceptions of globalization and competitive business environment, along with higher education, have reduced interest in taking the risks involved in financing family businesses. Educational attainment provided confidence in alternative career options rather than continuing the family business.
ANALYSIS OF THE PERCEPTION OF BELONGING AND THE COMMITMENT TO THE GENERATIONA...Jennifer Daniel
This document analyzes the perception of belonging and commitment during a generational transition of leadership in a Mexican consortium of companies dedicated to foreign trade. The consortium has over 30 years of experience and 600 employees. It is currently transitioning the presidency from the father to his son. The study aims to identify if there are factors that can ensure the success of the generational succession process. It will analyze the perceptions of employees and executives regarding changes to productivity and safety during the transition. The theoretical background discusses concepts like generational succession, commitment, and Kurt Lewin's model of change.
Activities involved in succession process 6John Johari
This document summarizes a research article that examined how the gender of the owner impacts succession planning in family businesses. The researchers explored how factors like age, education, and financial stake predicted the comprehensiveness of succession planning differently for male-owned and female-owned businesses. The study found both similarities and differences between males and females in the determinants of effective succession planning processes.
Work-Family Factors and its Relationships Between Dispositional, Occupational...Waqas Tariq
This study was conducted to test the mediating effects of work-family factors on the relationships between dispositional and occupational characteristics as the independent variables and intention to stay as the dependent variable. By using self-administered research questionnaire, data was collected from 240 middle age single mother employees in Klang Valley, Malaysia. Samples were determined through simple random sampling method whereby six out of 24 single mother associations were selected to obtain research samples. Descriptive statistical analysis was conducted to describe the respondents. Pearson Product Moment Correlation was used to determine the relationships among variables and Structural Equation Modeling using AMOS version 16.0 was utilized for model testing and to verify the presence of mediation effects. Further, the Soble’s z-test was used to test whether the mediators carry the effect of the independent variables on the dependent variable. The findings indicated that there were positive relationships among variables. The results also established the presence of mediation effects between the independent and dependent variables. Organizations may utilize work-family factors as mechanism to promote longer retention among employees. Keywords: Intention to stay, work-family facilitation, family satisfaction, dispositional characteristics, occupational characteristics.
This document summarizes research on the relationship between employee satisfaction and organizational performance. Several studies have found positive correlations between aggregated measures of employee job satisfaction and organizational outcomes like productivity, profitability, and customer satisfaction. However, the causal nature of this relationship is unclear - employee satisfaction may improve performance, but high performance may also increase satisfaction. More longitudinal research is needed to better understand the directionality and potential reciprocal nature of the relationship between employee attitudes and business outcomes. Overall, initial evidence suggests that how employees experience their work can influence organizational performance.
TheIncubatorAttribution theory in the organizational.docxssusera34210
The
Incubator
Attribution theory in the organizational
sciences: A case of unrealized potential
MARK J. MARTINKO
1*, PAUL HARVEY
2* AND
MARIE T. DASBOROUGH
3*
1
College of Business, Florida State University, Tallahassee, Florida, U.S.A.
2
Whittemore School of Business and Economics, University of New Hampshire, Durham, New
Hampshire, U.S.A.
3
School of Business, University of Miami, Coral Gables, Florida, U.S.A.
Summary We argue that although attributional processes appear to affect virtually all goal and reward
oriented behavior in organizations, they have not received adequate attention in the organ-
izational sciences. In this Incubator, we encourage scholars to unlock the potential
of attribution theory to develop more complete explanations of organizational behavior.
Copyright # 2010 John Wiley & Sons, Ltd.
Introduction
Attribution processes have been underutilized in the organizational sciences, yet have tremendous
potential to explain a wide range of workplace behaviors. The validity of attribution theory and the
tools to measure attributional processes are well-documented and frequently used by social
psychologists (Martinko, Douglas, & Harvey, 2006). We suspect that the underutilization of attribution
theory in the organizational sciences may have originated from concerns raised in the early-1980s that
cast attribution theory in an overly negative light. In this Incubator, we address those concerns and
demonstrate that attributions are relevant to many organizational phenomena, with a particular
emphasis on attribution styles, which are stable and reliable predictors of human behavior (e.g.,
Martinko, Harvey, & Douglas, 2007).
Definition, Role, and Function of Attributions
When we refer to attribution theory we are referring to the work of Heider (1958), Kelley (1973), and
Weiner (1986), which defines attributions as individuals’ explanations for the causes of their successes
Journal of Organizational Behavior
J. Organiz. Behav. 32, 144–149 (2011)
Published online 25 August 2010 in Wiley Online Library
(wileyonlinelibrary.com) DOI: 10.1002/job.690
*Please address correspondence via email to any or all of the above authors at [email protected]; [email protected];
and [email protected]
Copyright # 2010 John Wiley & Sons, Ltd.
Received 22 January 2010
Accepted 25 January 2010
and failures. The basic premise is that people have an innate desire to understand the causes of
important outcomes in their lives and that their attributions influence their responses to these outcomes
(Heider, 1958). Typical attributional explanations for outcomes are ability, effort, the nature of the task,
and luck.
Attributions are individuals’ beliefs about the causes of their successes and failures (i.e., rewards
and punishments) and influence expectancies, emotions, and behaviors (Martinko et al., 2007).
Recognizing that behavior is influenced by rewards and punishments, as almost all organizational
scholars would agree, ...
TheIncubatorAttribution theory in the organizational.docxchristalgrieg
The
Incubator
Attribution theory in the organizational
sciences: A case of unrealized potential
MARK J. MARTINKO
1*, PAUL HARVEY
2* AND
MARIE T. DASBOROUGH
3*
1
College of Business, Florida State University, Tallahassee, Florida, U.S.A.
2
Whittemore School of Business and Economics, University of New Hampshire, Durham, New
Hampshire, U.S.A.
3
School of Business, University of Miami, Coral Gables, Florida, U.S.A.
Summary We argue that although attributional processes appear to affect virtually all goal and reward
oriented behavior in organizations, they have not received adequate attention in the organ-
izational sciences. In this Incubator, we encourage scholars to unlock the potential
of attribution theory to develop more complete explanations of organizational behavior.
Copyright # 2010 John Wiley & Sons, Ltd.
Introduction
Attribution processes have been underutilized in the organizational sciences, yet have tremendous
potential to explain a wide range of workplace behaviors. The validity of attribution theory and the
tools to measure attributional processes are well-documented and frequently used by social
psychologists (Martinko, Douglas, & Harvey, 2006). We suspect that the underutilization of attribution
theory in the organizational sciences may have originated from concerns raised in the early-1980s that
cast attribution theory in an overly negative light. In this Incubator, we address those concerns and
demonstrate that attributions are relevant to many organizational phenomena, with a particular
emphasis on attribution styles, which are stable and reliable predictors of human behavior (e.g.,
Martinko, Harvey, & Douglas, 2007).
Definition, Role, and Function of Attributions
When we refer to attribution theory we are referring to the work of Heider (1958), Kelley (1973), and
Weiner (1986), which defines attributions as individuals’ explanations for the causes of their successes
Journal of Organizational Behavior
J. Organiz. Behav. 32, 144–149 (2011)
Published online 25 August 2010 in Wiley Online Library
(wileyonlinelibrary.com) DOI: 10.1002/job.690
*Please address correspondence via email to any or all of the above authors at [email protected]; [email protected];
and [email protected]
Copyright # 2010 John Wiley & Sons, Ltd.
Received 22 January 2010
Accepted 25 January 2010
and failures. The basic premise is that people have an innate desire to understand the causes of
important outcomes in their lives and that their attributions influence their responses to these outcomes
(Heider, 1958). Typical attributional explanations for outcomes are ability, effort, the nature of the task,
and luck.
Attributions are individuals’ beliefs about the causes of their successes and failures (i.e., rewards
and punishments) and influence expectancies, emotions, and behaviors (Martinko et al., 2007).
Recognizing that behavior is influenced by rewards and punishments, as almost all organizational
scholars would agree, ...
Perception of job performance appraisals toward turnover intention and job sa...Alexander Decker
This document summarizes a research journal article that examines the relationship between perceptions of job performance appraisals, turnover intentions, and job satisfaction. The study was conducted among marketing employees in pharmaceutical companies in Pakistan. The researchers hypothesized that perceived politics in performance appraisals would be negatively related to job satisfaction and positively related to turnover intentions. Data was collected through questionnaires measuring perceptions of performance appraisal politics, organizational commitment, job satisfaction, and turnover intentions. The results supported the hypotheses, finding that perceived politics in performance appraisals predicted lower job satisfaction and higher turnover intentions among employees.
Corporate Social and FinancialPerformance An Extended.docxrichardnorman90310
Corporate Social and Financial
Performance: An Extended
Stakeholder Theory, and Empirical
Test with Accounting Measures
Gerwin Van der Laan
Hans Van Ees
Arjen Van Witteloostuijn
ABSTRACT. Although agreement on the positive sign
of the relationship between corporate social and financial
performance is observed in the literature, the mechanisms
that constitute this relationship are not yet well-known.
We address this issue by extending management�s stake-
holder theory by adding insights from psychology�s
prospect decision theory and sociology�s resource
dependence theory. Empirically, we analyze an extensive
panel dataset, including information on disaggregated
measures of social performance for the S&P 500 in the
1997–2002 period. In so doing, we enrich the extant
literature by focusing on stakeholder heterogeneity, per-
ceptional framing, and disaggregated measures of corpo-
rate social performance.
KEY WORDS: panel data analysis, prospect decision
theory, resource dependence theory, social responsibility,
stakeholder theory
Introduction
Three decades of research into the relationship
between corporate social performance (CSP) and
corporate financial performance (CFP) suggest, by
and large, that corporate well-doing enhances firm
profitability (Orlitzky et al., 2003). The analyses
have remained at a fairly high level of aggregation,
giving rise to the criticism that overall measures of
CSP and CFP do not take the rich variety of
underlying determinants into account (Wood and
Jones, 1995). The current study aims to enhance the
understanding of the drivers of the relationship
between corporate social and financial performance.
For one, theoretically, we will develop hypotheses as
to the impact on the CSP–CFP relationship of
stakeholder heterogeneity and perception biases.
Additionally, empirically, we will explore an
extensive panel dataset that covers the corporations
in the S&P 500 over the 1997–2002 period,
including decomposed information about underly-
ing dimensions of corporate social performance.
More specifically, our key contribution is two-fold.
First, we analyze the effect of heterogeneity
among corporate stakeholder groups on the CSP–
CFP nexus, following Clarkson�s (1995) distinction
between primary or �private� stakeholders, and
secondary or �public� stakeholders. Wood and
Jones (1995) argued that there is a mismatch
between the variables in previous research. For
instance, employees and Greenpeace put different
emphasis on issues of labor conditions and envi-
ronmental pollution. With this critique in mind,
we explicitly incorporate more fine-grained mea-
sures of corporate social performance into our
analysis. After all, the question as to the relation-
ship between corporate social and financial per-
formance cannot be considered separate from the
analysis of how corporations interact with different
stakeholder groups that weigh the underlying CSP
dimensions differe.
This document summarizes research on the relationship between employee satisfaction and organizational performance. It discusses that while most research has focused on individual employee satisfaction and performance, theorists have suggested employee satisfaction should relate to organizational performance levels. The document reviews two studies that found positive relationships between aggregated employee satisfaction at the business unit or organizational level and various performance outcomes such as productivity, profitability, and customer satisfaction. However, both studies had limitations in generalizability across industries. Overall, the research suggests higher aggregated employee satisfaction within an organization or business unit may positively relate to organizational performance.
r Academy of Management Journal2019, Vol. 62, No. 5, 1609–16.docxaudeleypearl
r Academy of Management Journal
2019, Vol. 62, No. 5, 1609–1642.
https://doi.org/10.5465/amj.2014.0795
MICROFOUNDATIONS OF CORPORATE SOCIAL
RESPONSIBILITY AND IRRESPONSIBILITY
CATHERINE T. SHEA
Carnegie Mellon University
OLGA V. HAWN
University of North Carolina, Chapel Hill
This study examines the importance of social perception of corporate social responsibility
(CSR) and irresponsibility (CSI). Drawing from social psychology literature on stereotypes,
we argue that two fundamental dimensions of social perception—warmth and
competence—help explain the underlying processes and conditions under which CSR
leads to specific outcomes. We propose that firms engaging in CSR are perceived as higher
in warmth and, by default, competence; moreover, different perceptions of the organiza-
tion’s warmth and competence can moderate CSR rewards and CSI penalties. To dem-
onstrate this, we conduct three experiments. Experiment 1 links CSR with perceptions of
warmth and competence, showing that warmth perceptions mediate the relationship be-
tween CSR and important outcomes, such as purchase intentions and reputation. Exper-
iment 2 adds information on firms’ countries of origin, revealing that CSR rewards and CSI
penalties differ depending on the (mis)alignment of CSR strategy with country stereotypes.
Experiment 3 replicates these findings using behavioral paradigms. We find that firms
from high-warmth countries (the United States, Sweden, Portugal) receive lower CSR
rewards and pay higher CSI penalties than firms from low-warmth countries (Germany,
Pakistan) but this effect is moderated by competence. Our micro–macro study advances
social evaluation, strategic CSR, and international management literatures.
Corporate social responsibility (CSR) has grown
markedly in the past decade both as an important
phenomenon in practice and as a critical field in
academia (Wang, Tong, Takeuchi, & George, 2016).
We have theorized about its institutional (Campbell,
2007; Ioannou & Serafeim, 2012) and organizational
drivers (Aguilera, Rupp, Williams, & Ganapathi,
2007; McWilliams & Siegel, 2001) as well as exam-
ined its effect on firm performance (Berman, Wicks,
Kotha, & Jones, 1999; Cochran & Wood, 1984;
McGuire, Sundgren, & Schneeweis, 1988; Orlitzky,
Schmidt, & Rynes, 2003; Russo & Fouts, 1997)
and other outcomes (Berrone & Gomez-Mejia, 2009;
Flammer, 2013; Turban & Greening, 1997; Yoon,
Gürhan-Canli, & Schwarz, 2006). Yet CSR is primarily
studied at the macro level (i.e., institutional or orga-
nizational level) compared to the micro level (i.e.,
individual level) of analysis: a recent review of the
CSR literature shows that only 4% of all studies ex-
amine the individual level, while only 5% address
CSR at two or more levels of analysis (Aguinis &
Glavas, 2012). Therefore, what is lacking in CSR re-
search is deeper appreciation, at the individual level,
of how CSR makes an impact (Wang et al., 2016).
Accordingly, this paper addresses the need for micro
stu ...
This study examines the relationship between attitudinal factors, structural barriers, and entrepreneurial intentions among women. The study surveyed 1,200 women in the southeastern United States intending to start businesses. Regression analyses found that both perceived structural barriers and self-confidence in abilities had significant effects on commitment to starting a business. However, the interaction between barriers and self-confidence was not significant. The results support the idea that both attitudinal and structural factors influence entrepreneurial intentions among women.
Managerial perceptions on corporate social responsibility in select companies...inventy
Research Inventy : International Journal of Engineering and Science is published by the group of young academic and industrial researchers with 12 Issues per year. It is an online as well as print version open access journal that provides rapid publication (monthly) of articles in all areas of the subject such as: civil, mechanical, chemical, electronic and computer engineering as well as production and information technology. The Journal welcomes the submission of manuscripts that meet the general criteria of significance and scientific excellence. Papers will be published by rapid process within 20 days after acceptance and peer review process takes only 7 days. All articles published in Research Inventy will be peer-reviewed.
Organizational Commitment in relation to Organizational Politics: A study on ...inventionjournals
The root objective behind this study is to explore the relation between organizational commitment
and organizational politics, of the government employees. This study also focuses on the gender difference
taking these factors under consideration. This study is conducted on 200 male and female employees in total, of
middle level belonging to urban domicile. A survey of government employees (aged 40-55) reveals that
organizational commitment has no significant positive correlation with organizational politics in total.
Additionally, this relation does not found to be correlated in case of both female and their male counterparts.
Leadership & Organization Development JournalEmployee justic.docxsmile790243
This study examines the relationship between perceptions of organizational justice (distributive, procedural, and interactional justice) and coworker relationships, specifically coworker trust and morale. The researchers hypothesized that all three types of justice perceptions would be positively related to coworker trust and morale. Surveys were distributed to 364 employees across six small companies, with 264 responses collected. The results showed that perceptions of distributive, procedural, and interactional justice were indeed positively related to coworker trust and morale. Fairness in rewards, policies/procedures, and treatment were thus linked to better coworker relationships. The implications are that organizations should focus on enhancing justice to facilitate improved coworker trust and morale.
Corporate social responsibility institutional drivers a comparative study fro...Adam Shafi Shaik PhD.
ABSTRACT
This study develops an internal–external institutional framework that explains why firms act in socially responsible ways in the emerging country context of India and Saudi Arabia. Utilizing a mixed method of in-depth study selected companies & individuals, the author found that internal institutional factors, including ethical corporate culture and top management commitment, and external institutional factors, including globalization pressure, Government embeddedness, and normative social pressure, will affect the likelihood of firms to act in socially responsible ways. In particular, implicit ethical corporate culture plays a key role in predicting different aspects of corporate social responsibility (CSR), while external institutional mechanisms mainly predict market-oriented CSR initiatives. This study contributes to the research on CSR antecedents by showing that in the emerging economy of India and Saudi Arabia, CSR toward non market stakeholders is more close
Sungjoo Choi Kennesaw State University Hal G. Rainey Univers.docxmattinsonjanel
Sungjoo Choi
Kennesaw State University
Hal G. Rainey
University of Georgia
Managing Diversity in U.S. Federal Agencies: Effects of Diversity and Diversity Management on Employee Perceptions of Organizational Performance
Current Trends in Public Personnel Administration
Sungjoo Choi is an assistant professor in the Department of Political Science at Kennesaw State University. She received her doctorate from the University of Georgia. Her research interests include diversity management, organizational justice, perfor- mance management in public organizations, and comparative public administration. E-mail: [email protected]
Hal G. Rainey is Alumni Foundation Distinguished Professor in the School of Public and International Affairs at the University of Georgia. His book Understand- ing and Managing Public Organizations was published in 2009. This year, he received the Dwight Waldo Award from the American Society for Public Administration.
E-mail: [email protected]
Diversity in the workplace is a central issue for contemporary organizational management. Concomitantly, managing increased diversity deserves greater concern in public, private, and nonprofit organizations. The authors address the effects of diversity and diversity management on employee perceptions of organizational performance in U.S. federal agencies
by developing measures of three variables: diversity, diversity management, and perceived organizational performance. Drawing from the Central Personnel Data File and the 2004 Federal Human Capital Survey, their findings suggest that racial diversity relates negatively
to organizational performance. When moderated by diversity management policies and practices and team processes, however, racial diversity correlates positively with organizational performance. Gender and age diversity and their interactions with contextual variables produce mixed results, suggesting that gender and age diversity reflect more complicated relationships. This article provides evidence for several benefits derived from effectively managing diversity.
The American workforce has been increasingly diversified by greater access to jobs for women and minorities. Diversity and representation “politically integrate a diverse nation with a measure of legitimacy” (Brewer 2002, 1), but also enhance social justice (Kellough 1990; Krislov and Rosen- bloom 1981). Understanding the impacts of diversity on organizational outcomes, such as organizational performance, employee satisfaction, and turnover,
has become essential (Milliken
pursuing affirmative action programs to taking advan- tage of differences to improve organizational effective- ness (Wise and Tschirhart 2000). Recent research has investigated diversity in relation to organizational effectiveness.
Public organizations, through equal employment opportunity (EEO) and affirmative action programs, have been more committed to workforce diversity than have private organizations, resulting in a higher lev ...
The document summarizes a research study exploring factors that lead family firms to intend to change their governance structures. 18 family firms in the Netherlands participating in the study all expressed an intention to adjust their governance. Through interviews, the researchers aimed to understand why these firms want to change their structures and their expectations of new structures. The study applies a behavioral theory perspective to governance mechanisms as strategic tools in family firm decision-making. It contributes to research on change processes in strategizing while considering the family firm context.
Managerial communications and trust buildingMiia Kosonen
The document discusses managerial communication practices that build intra-organizational trust. It analyzes empirical data from focus group interviews within large Finnish organizations.
The results suggest that the three dimensions of managerial communication from the motivating language theory (direction-giving, empathetic, and meaning-making language) are important for building trust. Direction-giving language builds trust through two-way communication, guidance, informing about the future, and communicating truthful and accurate information in a timely manner. Empathetic language builds trust by showing care, listening, and being closer to employees. Meaning-making language builds trust by communicating an open discussion culture, training managers, and communicating procedures and routines. However, some practices do not transfer
1. Journal of Business Venturing 18 (2003) 667 – 687
Predictors of satisfaction with the succession process in
family firms
Pramodita Sharmaa,*, James J. Chrismanb,c, Jess H. Chuac, 1
a
School of Business and Economics, Wilfrid Laurier University, Waterloo, Ontario, Canada N2L 3C5
b
Department of Management and Information Systems, College of Business and Industry,
Mississippi State University, Mississippi, MS, USA
c
Haskayne School of Business, University of Calgary, 2500 University Drive, NW,
Calgary, Alberta, Canada T2N 1N4
Abstract
Recent theoretical developments suggest that satisfaction with the succession process in family
firms is enhanced by the incumbent’s propensity to step aside, the successor’s willingness to take over,
agreement among family members to maintain family involvement in the business, acceptance of
individual roles, and succession planning. Data from incumbent leaders and successors provide strong
support for these relationships. Incumbents and successors disagree, however, about the importance of
each other’s role. This implies a need to align these strategic stakeholders’ perceptions in the family
firm. Our research methodology also highlights the importance of considering multiple stakeholder
groups in conducting family firm research.
D 2003 Elsevier Science Inc. All rights reserved.
Keywords: Family business; Succession; Stakeholders
1. Executive summary
In a recent study, Sharma et al. (2001) developed a model on satisfaction with the
succession process in family firms by drawing on the premises of stakeholder theory as well
as various aspects of organizational, behavioural, and economic theories. Their model
* Corresponding author. Tel.: +1-519-884-0710; fax: +1-519-884-0201.
E-mail addresses: psharma@wlu.ca (P. Sharma), jess.chua@haskayne.ucalgary.ca (J.H. Chua).
1
Tel.: +1-403-220-6331; fax: +1-403-282-0095.
0883-9026/03/$ – see front matter D 2003 Elsevier Science Inc. All rights reserved.
doi:10.1016/S0883-9026(03)00015-6
2. 668 P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687
proposes that satisfaction with the succession process is directly affected by (1) propensity of
the incumbent to step aside, (2) the successor’s willingness to take over, (3) agreement among
family members to maintain family involvement in the business, (4) acceptance of individual
roles, and (5) succession planning. We test these relationships using data collected from
incumbent presidents and successors of a sample of family firms.
Univariate results show that incumbents and successors disagreed on important aspects of
the succession process and family firm attributes. The incumbents were more satisfied with
the process and believed more strongly that they were ready to step aside and succession was
planned. This suggests a misalignment of perception. The incumbents may not have
communicated their propensity to step aside and may have been planning the succession
without consulting or communicating with the successors.
Regression results show that the two respondent groups agree on the importance of
succession planning and acceptance of individual roles in the business in determining
their satisfaction with the process. They also indicate that agreement among family
members to maintain family involvement in the business was not important in determining
satisfaction.
They differ, however, in terms of whose attitude is important in determining their
satisfaction. Incumbents indicate that their satisfaction is influenced by the successors’
willingness to take over but not by their own propensity to step aside. Successors, on the
other hand, indicate the reverse—their satisfaction is influenced by the incumbent’s
propensity to step aside but not their own willingness to take over. This is unique evidence
about the importance of the relationship between the perceptions of incumbent and
successor.
This article makes several contributions to the study of family business management.
First, it confirms hypotheses from the literature that were integrated in Sharma et al. (2001).
These hypotheses have not been tested together before. Second, the results suggest an urgent
need to align the perceptions of incumbents and successors in order to increase the
probability of a satisfactory succession process. Third, it highlights the interactive roles
played by incumbents and successors. Fourth, in terms of methodology, the results indicate
that empirical research on family business must take into account the possibility that
different stakeholders in the family business may have very different perceptions about the
issues or topics under investigation. This is one of the first empirical studies of family
business of which we are aware that analysed an issue from more than one stakeholder
group’s point of view.
2. Introduction
Demographic trends suggest that a large majority of family business leaders will retire in
the next decade (US Census Bureau, 2000). Therefore, family business researchers’
preoccupation with leadership succession should not be a surprise (Sharma et al., 1996).
Scholars have been concerned with finding ways to preserve successful ventures, many of
which are or become family firms, beyond the tenure of their founders. To contribute to this
3. P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687 669
aim, this article describes a study that investigates factors influencing satisfaction with the
succession process in family firms.
In the family business literature, succession means the transfer of leadership from one
family member to another—a goal shared by a majority of family firms (American Family
Business Survey, 1997).2 A successful succession can help a family firm achieve or sustain its
´
competitive advantage over non-family firms (Cabrera-Suarez et al., 2001) by preserving the
‘‘idiosyncratic knowledge of family character’’ (Bjuggren and Sund, 2001, p. 11) or
‘‘familiness’’ (Habbershon and Williams, 1999, p. 1).
Family firms have subjective and objective performance goals (e.g., Lee and Rogoff, 1996;
Stafford et al., 1999; Tagiuri and Davis, 1992). Thus, family firms cannot be thoroughly
understood unless researchers investigate the factors that influence performance in terms of
both types of goals. Succession is no exception, and its success has two interactive
dimensions—satisfaction with the process and effectiveness of succession (Handler, 1989;
Morris et al., 1997). The former is a subjective assessment of the process and decision and the
latter an objective determination of the impact of the decision on firm performance.
Recently, Sharma et al. (2001) presented a model on satisfaction with the succession
process that draws on the premises of stakeholder theory as well as various aspects of
organizational, behavioural, and economic theories. Aside from helping to distinguish
between the two interactive dimensions of success in succession, it proposes a compre-
hensive model of the factors and interactions that influence initial satisfaction with the
succession process in family firms. The model indicates that the complex interactions of five
factors and their antecedents affect satisfaction with the succession process. This study tests
the direct influences of the five factors: (1) propensity of the incumbent to step aside, (2) the
successor’s willingness to take over, (3) agreement among family members to maintain
family involvement in the business, (4) acceptance of individual roles, and (5) succession
planning.
The study makes several contributions to research on family business management. First, it
confirms hypotheses that arise from the literature and were integrated in Sharma et al. (2001).
These hypotheses have not been tested together before. Second, the results show an urgent
need to align the perceptions of incumbents and successors in order to increase the probability
of a satisfactory succession process. Third, the study highlights the interactive roles played by
the incumbent and the successor. Fourth, the results indicate that empirical research on family
business must take into account the possibility that different stakeholders in the family
business may have very different perceptions about the issues or topics under investigation.
This is one of the first empirical studies of family business of which we are aware that
analysed an issue from more than one stakeholder group’s point of view.
2
Consistent with previous discussions in the literature (e.g., Fredrickson et al., 1988; Pitcher et al., 2000;
Sharma et al., 2001), we focus on voluntary successions where the incumbent has control over the succession
process, as opposed to successions due to death or illness or dismissals by boards or other stockholders with
sufficient ownership rights. Succession due to death or illness is out of the firm’s control, while dismissals are rare
because the incumbent tends to have ownership control. Brown (1993) discusses how to deal with the issues
arising from death or illness in the family firm.
4. 670 P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687
In the next section, we briefly state our hypotheses. Following that, we describe the data
and analyses. Then, we present and discuss the empirical results. We make our conclusions in
the last section.
3. The conceptual model
Stakeholders are those ‘‘who can affect or be affected by’’ the achievement and nature of
organizational decisions (Freeman, 1984, p. vi). In family firms, all family members are
stakeholders in the succession process as they can, to varying extents, affect or be affected by
leadership transitions (Sharma, 2001).3 Consistent with the underpinnings of systems theory,
this view necessitates developing an understanding of the succession process from the
perspective of all stakeholder groups (Heck and Trent, 1999; Stafford et al., 1999). The extent
to which each stakeholder group can influence the succession process and succession decision
is clearly a function of the stakeholder group’s salience in terms of power, legitimacy, and
urgency (Mitchell et al., 1997).
Based on the premises of stakeholder theory as well as various aspects of organizational,
behavioral, and economic theories, Sharma et al. (2001) presented a model describing how
satisfaction with the succession process is affected by interactions among all of the stake-
holders of the family firm. In the model, satisfaction is influenced positively by the
interactions among five factors and their antecedents. The five factors are (1) the incumbent’s
propensity to step aside, (2) the successor’s willingness to take over the business, (3) extent of
succession planning, (4) family members’ agreement to maintain family involvement in the
business, and (5) acceptance of individual roles.4
Our test of the model is limited to the direct influences of the five factors and focuses on the
incumbent and the successor—the two key stakeholders without whose cooperation the transfer
of leadership cannot be effected (Handler, 1989). Thus, we modify the model and hypotheses
proposed by Sharma et al. (2001) to focus on the perspectives of these two groups of
stakeholders. Fig. 1 shows our simplified model. Our hypotheses are briefly discussed below.
The incumbent leaders of family firms often have significant financial and emotional
investment in the firm, providing them with legitimacy and power (Bjuggren and Sund, 2001;
Cannella and Shen, 2001) to control the succession decision and process (e.g., Lansberg,
3
It is the nature of family firms that family and business interests and issues are often confounded. Therefore,
even family members who are neither owners nor employees may affect or be affected by the succession process.
For example, their influence on the family can affect family dynamics and issues that, in turn, can affect the
succession process. For another example, family members also have the tendency to share resources. Therefore,
family members who are neither owners nor employees may, nevertheless, be affected by the succession decision
in terms of the resources available to be shared with them. If they can affect or be affected by succession in the
family firm, then they are stakeholders per Freeman’s (1984) definition of the term. For a thorough discussion
about why all family members must be considered stakeholders, see Heck and Trent (1999).
4
The antecedents are (1) perceived family harmony, (2) fit between successor’s career interests and the
business, (3) trust in the successor’s abilities and intentions, (4) incumbent’s interests outside the business, (5)
expected payoffs from the business, and (6) presence of an active board. For detailed development of the full
model and hypotheses regarding succession satisfaction, please refer to Sharma et al. (2001).
5. P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687 671
Fig. 1. Determinants of satisfaction with the succession process in the family firm. (I) indicates that the hypothesis
is supported by incumbents and (S) indicates support by successors. *P<.05, **P<.01, ***P<.001.
1999; Schulze et al., 2001). Many of these incumbents have devoted a large portion of their
lives and careers to building up their firms and some of them may find stepping aside
challenging or even frightening because they fear the loss of power, status, or personal
identity.5 Consequently, the incumbent’s propensity to step aside should directly influence the
incumbent’s satisfaction with the succession process. Since a dissatisfied incumbent could
potentially cause the process to falter or create discord within the family, the incumbent’s
propensity to step aside should also affect the successor’s satisfaction level.
Perception will be individualistic; the incumbent and the successor may have different
perceptions about the incumbent’s propensity to step aside. As a direct effect, each stake-
holder’s perception will affect that particular stakeholder’s satisfaction.6
Hypothesis 1a: There is a positive relationship between the incumbent’s perception about the
incumbent’s propensity to step aside and the incumbent’s satisfaction with the succession
process.
Hypothesis 1b: There is a positive relationship between the successor’s perception about the
incumbent’s propensity to step aside and the successor’s satisfaction with the succession
process.
5
Of course, others may view retirement as a new beginning and desirable outcome (Kets de Vries, 1985;
Lansberg, 1988).
6
Through interactions, as discussed in Sharma et al. (2001), each party’s perception has the potential to affect
the other party’s satisfaction. As discussed before, this study is limited to testing the direct effects.
6. 672 P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687
Without a successor willing to take over the family business, the family may have to sell
the business. At best, succession will have to proceed with the reluctant acquiescence of or
resistance by the successor. Therefore, the process will not proceed smoothly, and
satisfaction with the process will be negatively affected (Handler, 1992; Shepherd and
Zacharakis, 2000). On the other hand, once families or incumbents decide to retain
leadership of the firm within the family, the willing successor acquires legitimacy and
power to influence the succession process. Thus, the successor’s willingness to take over
(H2a and H2b) must also influence satisfaction with the succession process for both
incumbents and successors.7
Hypothesis 2a: There is a positive relationship between the incumbent’s perception about the
successor’s willingness to take over the leadership of the family business and the incumbent’s
satisfaction with the succession process.
Hypothesis 2b: There is a positive relationship between the successor’s perception about the
successor’s willingness to take over the leadership of the family business and the successor’s
satisfaction with the succession process.
When financial and emotional assets of other family members are closely tied to the firm,
the succession decision will have a significant impact on these assets. Although the incumbent
and the successor are the key stakeholders in the succession process, these other family
members may influence the process through their combined power, legitimacy, and urgency.
Two primary ways by which these family members may influence the succession process
are through their agreement to maintain family involvement in the business (H3a and H3b)
and their acceptance of mutual roles related to the business (H4a and H4b). The first variable
indicates how these salient stakeholders view the attractiveness of their future stakes in the
family business, while the second indicates whether their roles in the business will enable
them to achieve their goals within the firm. Thus, these variables help determine whether
family members will use their positions in the family and/or firm to hinder or help the
succession process. Put differently, if there is no commitment by other family members to the
goal of succession and no agreement with respect to their future relationships with the
successor, other family members are more likely to attempt to undermine the process of
redistributing company shares, assets, and/or power (cf. Stevenson et al., 1985). This
discordance might delay or stop the succession process (Dyer, 1986; Poza and Messer,
2001). Such disruption is likely to diminish the satisfaction experienced by the incumbent and
successor with respect to the succession process.
Hypothesis 3a: There is a positive relationship between the degree to which family members
agree to maintain family involvement in the business and the satisfaction experienced by the
incumbent of the family firm with respect to the succession process.
7
Similar to the discussion in footnote 5, through interactions, one party’s perception may affect another party’s
satisfaction. This study does not test interactive effects.
7. P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687 673
Hypothesis 3b: There is a positive relationship between the degree to which family members
agree to maintain family involvement in the business and the satisfaction experienced by the
successor of the family firm with respect to the succession process.
Hypothesis 4a: There is a positive relationship between the degree to which family members
accept each other’s role in the business and the satisfaction experienced by the incumbent of
the family firm with respect to the succession process.
Hypothesis 4b: There is a positive relationship between the degree to which family members
accept each other’s role in the business and the satisfaction experienced by the successor of
the family firm with respect to the succession process.
Succession does not happen spontaneously; a process, not necessarily formal, must be put
in place to transfer leadership from one individual to another. Since leadership succession in
family firms is an emotion-bound issue, it can sometimes raise unpleasant issues for family
members. However, thoughtfully developed succession plans can increase the likelihood of
cooperation among stakeholders in the business and enhance satisfaction with the succession
process (e.g., Dyck et al., 2002). Thus, we contend that, in general, a formal process in the
form of succession planning is preferable to no succession planning because it allows for the
views of the salient stakeholders to be considered and, in varying degrees, to be incorporated
into the process itself. This contention is consistent with the importance accorded to
succession planning in the literature (e.g., Lansberg and Astrachan, 1994; Ward, 1987).
Consequently, we hypothesize that
Hypothesis 5a: There is a positive relationship between the extent to which a firm engages in
succession planning and the satisfaction experienced by the incumbent of the family firm with
respect to the succession process.
Hypothesis 5b: There is a positive relationship between the extent to which a firm engages in
succession planning and the satisfaction experienced by the successor of the family firm with
respect to the succession process.
4. Data and analysis
There is no national list of family firms in Canada. Thus, following other empirical studies
in family business research, we chose a convenience sample. The study used the 604 member
firms of the Canadian Association of Family Enterprise (CAFE), which is the only nation-
wide nonprofit association of family firms in Canada. A previous study (Chua et al., 1999)
found CAFE members to be older and larger than non-CAFE firms.8 It is difficult to imagine
that family firms within a nation would face different succession issues simply because of
8
In the previous study, the list of nonmembers was obtained from a consulting firm. This study did not have
the cooperation of the consulting firm. We did, however, control for size and generation/age in our regression
analysis.
8. 674 P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687
membership in an association. After all, nonmembers can easily become members by simply
paying the membership dues. Nevertheless, self-selection bias cannot be completely ruled
out. For example, even if the succession issues are similar, members may be more willing to
seek help. As a result of effective outside assistance, they may have higher levels of
satisfaction with their succession processes.9
Rich qualitative studies conducted on succession have all observed that the process is
lengthy (Dyck et al., 2002; Handler, 1989; Vancil, 1987) and may take 15–20 years (Ward,
1990). Therefore, it is not possible to pinpoint the exact time at which a family firm begins or
ends the succession process. To make allowance for this ambiguity, we screened the sample
for firms that expected the succession event within the ensuing 5 years and those for which
the event has occurred within the preceding 5 years. The first screening criterion assumes that
if succession is expected to occur within the subsequent 5 years, the process should have
started. The second assumes that the process may still be continuing or, at least, given the
importance of succession, memories will be relatively fresh in the minds of key stakeholders
and their responses will be accurate. Based on these criteria, 509 firms were selected.10
Researchers suggest that the perceptions of incumbents and successors may differ
significantly (Poza et al., 1997). Therefore, we collected data from both incumbents and
successors, using two color-coded, pretested questionnaires. The basic questions asked were
the same, but each version of the questionnaire addressed the individual in more personal
terms. Each respondent was provided stamped self-addressed return envelopes. Usable
responses were received from 177 firms yielding an overall response rate of 34.8%. A total
of 142 responses were received from successors (27.9%) and 118 from presidents (23.2%),
but for only 76 firms (14.9%) did both the incumbent and successor respond. Among these
firms, some incumbents or successors did not respond to all of the questions, reducing the sets
of complete data available to test the hypotheses.11
Tests of nonresponse were conducted using Armstrong and Overton’s (1977) contention
that late respondents are more likely than early respondents to be similar to nonrespondents.
Data received were categorized into three batches based on the timing when they were
received. MANOVA tests were conducted to examine differences in responses among
questionnaires received at different times. No significant differences were found between
early and late respondents, suggesting that sample selection bias was not an issue in this study
(Kanuk and Berenson, 1975; Oppenheim, 1966). Furthermore, t tests on the means for the
dependent, independent, and control variables showed no statistically significant differences
between the matched and full samples for either incumbents or successors.
9
For a discussion about selection bias and its implications, see Heckman (1979).
10
The choice of 5 years before and 5 years after was arbitrary. More years would have given us a larger
sample at the expense of accuracy in memory recall in the case of those firms for which the event had taken place
and at the expense of information sufficiency in the case of those for which the event had not. Fewer years may
have yielded too few observations to perform the analysis planned.
11
Analysis using the full data sets for incumbents and successors show similar results and are available from
the authors. The results from the matched sample may have the advantage of controlling for variables that were not
explicitly included in our regression model with respect to conclusions drawn about differences in the responses of
incumbents and successors.
9. P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687 675
4.1. Operationalizing the variables
The dependent variable—satisfaction with the succession process—and the five independ-
ent variables were measured with multiple indicators using a 5-point Likert-type rating scale.
In the questionnaire used to collect data on these indicators, each anchor on the scale was
named in order to help the respondents make their choices and, hopefully, to enhance
consistency in interpretation. Although an attempt was made to use established scales where
possible, given the early developmental stage of empirical research on family firms, many of
the scales used were either modified from those used in previous studies (e.g., Handler, 1989;
Malone, 1989; Lansberg and Astrachan, 1994) or developed specifically for this study. The
definition for each variable and the indicators used are presented in the Appendix A.12
The dependent variable was a construct calculated as an equally weighted average of 12
relevant indicators. Each independent variable was also a construct calculated as an equally
weighted average of the relevant indicators. The alpha values for these constructs ranged from
.68 to .93. All constructs except that for incumbent’s propensity to step aside had reliability
coefficients greater than the conventionally accepted guideline of .70. This suggests that
results related to this variable need to be interpreted with caution and attempts should be
made in future research to improve upon this scale.
In addition to the variables related to the hypotheses, we included four control variables
that researchers believe affect the succession process. Christensen (1953) suggests that
succession from founder to the next generation is very different from that occurring in later
generations as the process becomes institutionalised. Therefore, we created a dummy variable
for the generation of the incumbent, starting with zero for the founder.13
Research (e.g., Dumas, 1989; Harveston et al., 1997) suggests that successions involving
an incumbent–successor pair of the same gender are different from those where the two are of
different genders. To take this into account, we created a dummy variable for gender mix,
with a value of zero indicating a same gender succession and a value of one indicating a
cross-gender succession.
Wong et al. (1992) and the American Family Business Survey (1997) suggest that there is a
positive relationship between firm size and successful transfers to the next generation. Thus,
we included firm revenue as the third control variable.
Finally, there could be systematic differences in the responses of the two groups of family
firms in terms of their succession timing status. Therefore, we included a dummy variable to
indicate whether succession had taken place or was still anticipated. Inclusion of this variable
also serves as a test for timing bias. In summary, the four control variables used in this study
12
An anonymous reviewer pointed out that the named anchors on the questionnaire aggregate those who were
barely or just somewhat dissatisfied in the same (not at all satisfied) category. For those questions relating to
satisfaction with the succession process, anything less than some level of positive satisfaction (somewhat,
moderately, fairly, completely) was relegated to 1 (not at all satisfied). This skews the scale. In addition, there is no
neutral point on the scale. With the limited scale and reduced range of responses, our findings with respect to the
mean satisfaction level may be biased upward, the variances on the low side understated, and the coefficients
downward biased.
13
Generation is also a surrogate measure of the age of the firm.
10. 676 P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687
are generation of incumbent, gender mix, firm size, and whether succession had taken place or
was still anticipated.
4.2. Data analysis
Descriptive statistics for the sample firms and the dependent and independent variables
were obtained. A univariate comparison of the responses was conducted to test for differences
in the responses from the two groups of stakeholders.
The hypotheses were tested by estimating separate ordinary least-squares regression
models for the two groups of stakeholders. Chow test was performed to ascertain significance
in the overall differences of the two models. We used t tests to compare the coefficients of the
two regression models to identify the independent variables causing the overall differences
between incumbents and successors.
5. Results
The median revenue for the firms in our sample was between $5 million and $10 million.
Out of 76 firms, 7 (9%) had less than $1 million, 22 (29%) between $1 and $5 million, 13
(17%) between $5 and $10 million, 26 (34%) between $10 and $50 million, and 8 (11%) over
$50 million. Thirty-six firms (47%) had undergone succession in the preceding 5 years. Sixty-
five (85%) involved same gender successions (62 male pairs). Forty-nine involved a founder
transferring leadership to the next generation.
5.1. Descriptive statistics and univariate results
Table 1 shows the means, standard deviations, correlations, and alphas for the variables in
the model. The independent variable ‘‘successor’s willingness to take over’’ has the highest
mean value for both incumbents and successors. This suggests a shared perception that the
next generation was willing to take over the leadership role for our sample of family firms.
Incumbents and successors differed significantly in their satisfaction with their families’
succession processes. The mean for the former was 4.22 while that for the latter was 3.74. Both
means are significantly above 3.0, the midpoint of the scale.14 They also differed significantly
in their perceptions about four of the five independent variables, the exception being
perceptions on the extent to which their families agreed to maintain family involvement in
the business. The incumbents’ evaluations of their propensity to step aside, family members’
acceptance of individual roles, and the extent of succession planning undertaken were all
higher than the successors’ evaluations. What is most interesting is that the incumbents’
evaluation of the successors’ willingness to take over was also higher than the successors’ own
evaluation. It is impossible to tell whether this difference is a function of miscommunication
(the successor communicated what he/she thought the incumbent wanted to hear) or
14
Please see footnote 11 for limitations in interpreting these results.
11. Table 1
Descriptive statistics and correlations
Variables Mean Standard Deviation Cronbach’s 1 2 3 4 5 6 7 8 9 10
Incumbents Successors Incumbents Successors alpha
Satisfaction with 4.22*** 3.74 0.58 0.89 .93 À .01 À .03 .15 À .10 .36 .18 .07 .64 .71
succession
P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687
process (1)
Firm size (2) 3.03 3.12 1.15 1.20 .33 À .12 .19 .12 .34** À .06 .04 .03 .00
Gender mix (3) 0.16 0.17 0.36 0.37 .09 À .08 .02 .03 À .11 À .22* À .12 .04 À .10
Generation (4) 0.35 0.32 0.48 0.47 .22 .33** À .14 À .19 .12 À .13 .01 .12 .19
Succession 0.54 0.54 0.50 0.50 À .22 À .07 À .13 À .07 À .14 À .04 À .14 .05 À .13
timing (5)
Propensity 3.70** 3.17 0.97 1.18 .68 .21 .10 À .17 .04 À .23 .06 À .02 .19 .27*
of the
incumbent
to step
aside (6)
Willingness 4.38* 4.10 0.70 0.78 .70 .55** À .14 .10 .04 À .12 À .07 .18 .48** .24*
of the
successor
to take
over (7)
Agreement to 3.89 3.92 0.89 0.85 .73 .24 .09 À .13 .15 À .24* .10 .09 .17 .14
maintain
family
involvement
(8)
Acceptance of 3.99* 3.70 0.80 0.90 .88 .66** .07 .10 .19 À .04 .12 .16 À .02 .46**
individual
roles (9)
Extent of 3.30 ** 2.85 0.75 0.74 .85 .60** .24 À .04 À .03 .24 .27* .24* .19 .36**
succession
planning (10)
Correlations below the diagonal are for incumbents. Those above the diagonal are for successors.
Asterisks beside the means for incumbents indicate significant differences from those for successors.
* P < .05.
** P < .01.
677
*** P < .001.
12. 678 P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687
misinterpretation (the incumbent interpreted the communication in the way he or she wanted to
hear it). Nevertheless, this result is consistent with the recurring pattern of differences in the
perceptions of incumbents and successors regarding the succession process found in this study.
5.2. Regression results
The regression results are presented in Table 2 below. They indicate a highly significant fit;
adjusted R2 are .55 for incumbents and .60 for successors. Tests of conformity with the
assumptions of multiple regression using guidelines suggested by Fox (1991) indicated that
all regression assumptions were satisfied.
Incumbents’ satisfaction with the succession process is significantly and positively related
to the successor’s willingness to take over (confirming H2a), family members’ acceptance of
their individual roles in the business (confirming H4a), and the extent of succession planning
(confirming H5a). However, incumbents do not believe that their own propensity to step aside
is a significant determinant of their satisfaction (rejecting H1a), nor that family agreement to
maintain family involvement is a factor (rejecting H3a).
Successors are more satisfied if family members accept their individual roles (confirming
H4b) and if there is more succession planning (confirming H5b). They differ from the
incumbents, however, in terms of whose attitude is more important to their satisfaction. They
Table 2
Results of regression analysis
Variables Incumbents Successors
Standardized t values Standardized t values
betas betas
Propensity of the 0.01 0.055 0.26 2.676*
incumbent to step aside
Willingness of the 0.39 3.046** 0.14 1.315
successor to take over
Agreement to maintain 0.12 0.955 À 0.09 À 0.948
family involvement
Acceptance of 0.28 1.942* 0.37 3.365***
individual roles
Extent of succession 0.31 2.599* 0.47 4.025***
planning
Firm size À 0.10 À 0.865 À 0.07 À 0.789
Gender dummy 0.06 0.482 À 0.03 À 0.010
Generation dummy 0.16 1.312 0.18 0.006
Succession timing dummy À 0.06 À 0.516 À 0.15 À 1.456
Adjusted R2 .55 .64
F 6.53*** 9.88***
N 47 47
* P < .05.
** P < .01.
*** P < .001.
13. P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687 679
believe that the incumbent’s propensity to step aside is essential (confirming H1b), but their
own willingness to take over is not (rejecting H2b). Consistent with the perceptions of
incumbents, they do not believe that family agreement to maintain involvement is a factor
(rejecting H3b). Finally, none of the control variables proved to have any significant influence
on the satisfaction levels of either incumbents or successors.
Chow test shows that the two regression models are significantly different ( F = 1.80,
P < .10). Tests for differences in the individual coefficients suggest that the two regression
models are different mainly due to the stakeholders’ varying responses to the incumbent’s
propensity to step aside (H1a and H1b: t = 2.85, P < .01) and the extent to which succession
had been planned (H5a and H5b: t = 2.64, P < .02).
6. Discussion
6.1. Univariate results
There are many possible conjectures to explain the differences in perceptions between
incumbents and successors. For example, incumbents could have been more satisfied with the
succession process because they were in control, and the process, as a result, was more consistent
with their views of how it should have been conducted than with the views of successors.
Incumbents may have believed more strongly than successors about their own propensity to
step aside because they did not communicate those propensities to successors effectively.
Similarly, incumbents may have believed that succession was planned to a greater extent
because they had been doing it informally for a long time. Conversely, failure of family
members to communicate their dissatisfaction with the succession process may explain why
incumbents were more sanguine about family member’ acceptance of their roles in the business.
Furthermore, incumbents may have compared their own hesitation at the time they took
over with the behaviour of the successors and concluded that the successors were more
willing than the successors actually were. Finally, incumbents’ perspectives of their
businesses may simply have been quite different from those of successors who did not have
as long or as close an association with the firm (Lansberg, 1988). All of these conjectures are
interesting topics for future research.
Whatever the reasons for the differences in perceptions, the most important conclusion to
be drawn from these results is that incumbents’ views of the business and relationships
among family members differs significantly from those of successors (Handler, 1989; Poza et
al., 1997). For researchers, this means that empirical studies will have to be qualified if the
data are collected from only one group of family firm stakeholders. For empirical results to be
interpreted as representing family firms, some consensus among the dominant coalition of
family firm stakeholders (cf. Chua et al., 1999) with respect to the issue studied must be
demonstrated. For members of family firms, this could mean that there is an urgent need for
communication and alignment of perceptions without which satisfaction with the succession
process will likely be lower. This difference reinforces our previous observation that research
about family business should reflect the views of more than one group of stakeholders.
14. 680 P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687
6.2. Regression results
Results indicate that family members’ agreement to maintain family involvement did not
affect either incumbents’ or successors’ satisfaction with the succession process despite
theoretical reasons and previous research (e.g., Babicky, 1987) suggesting that this relation-
ship should hold. A closer examination of the indicators used yields some conjectures for this
finding. The use of the word ‘‘all’’ in the first indicator may have led the respondents to
interpret ‘‘agreement’’ as ‘‘unanimity.’’ If the succession had proceeded or was proceeding
without unanimity, their responses would then show no relationship between this factor and
satisfaction. Future attempts to measure agreement to maintain family involvement should
clarify this. Another conjecture arises from the central role of the incumbent president in two
of the indicators. If the impetus for succession came from the ensuing generation(s), despite
the incumbent’s control over the process, then this might have also introduced noise into the
relationship. Thus, we believe that this relationship should be subjected to further testing
before eliminating it from the theoretical model.
The results show that succession planning improved the satisfaction with the succession
process of both incumbents and successors. This justifies the preoccupation of family
business researchers with succession planning. Further research should try to establish
whether the various dimensions of succession planning—selecting the successor, training
the successor, communicating the succession decision, developing a strategy for the firm after
succession, and defining the post-succession role of the incumbent (Sharma et al., 2000)—
have different impacts on satisfaction and, if so, the reasons behind the differences. Aside
from satisfaction, future research should also investigate whether succession planning
contributes to success with respect to family firm performance after succession.
The perceptions of both incumbents and successors with respect to family members’
acceptance of each other’s roles significantly increased their satisfaction levels. This construct
mainly measures the relative absence of conflicts and the family’s ability to deal with conflicts.
Schulze et al. (2001) suggest that conflicts in family firms may be mitigated by altruism. This
is an interesting direction for future research to pursue. They also suggest that altruism may
cause actions that are unjustifiable on purely economic grounds. Research on the causes and
consequences of altruism in family firms is needed to better understand the trade-offs involved
in decisions, such as succession, when economic and noneconomic considerations may come
into conflict.
The most interesting findings from the regression analysis are with respect to H1a, H1b,
H2a, and H2b. Both incumbents and successors believe that their satisfaction levels are more
strongly influenced by the other party’s attitude than by their own.15 This also means that they
15
The evidence related to the successors’ satisfaction level is stronger than that for the incumbents. Not only
was the regression coefficient for the successors with respect to the incumbent’s propensity to step aside
significantly different from zero, but the coefficients for the incumbents and the successors were significantly
different. While the coefficient for the incumbents with respect to the willingness of the successor to take over was
significantly different from zero and that for the successors was not, the two coefficients were not significantly
different from each other.
15. P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687 681
both assign heavier responsibility for their own dissatisfaction to the other. This could be a
result of the ‘‘fundamental attribution error’’—suggested by social psychologist Fritz Heider
(1958). Heider argues that human beings have a tendency to excuse their own behavior by
explaining it in terms of circumstances, but hold others responsible for their behavior by
attributing it to their inner dispositions. Further research is needed to determine the
motivations and perceptions that underlie this difference.
From a practical point of view, this difference highlights an important relationship
between the perceptions of incumbent and successor. The attitude of one affects the other’s
satisfaction with the succession process. If we add this insight to the observation that the
successors did not believe as strongly that the incumbents were ready to step aside, we have
an explanation for why the successors were less satisfied with the succession processes their
family firms had undergone. The incumbents in our sample had a higher propensity to step
aside than what was believed by the successors. Unless the incumbents were not truthful in
their responses, there appears to be a communication problem between the two key
stakeholder groups. This failure to communicate could by itself cause the failure of a
succession process.
For example, if an incumbent does not convey that he or she is ready to step aside and
to formulate a succession plan, or does not convey the plan effectively to other members of
the family, then a potential successor could lose interest in the family firm. This, in turn,
may reinforce the incumbent’s perception that the successor is not willing to take over the
business, causing the incumbent to delay the succession planning process and further
strengthen the successor’s perception that the incumbent is not ready to step aside.
Furthermore, a successor who believes that the incumbent is less than eager to transfer
leadership may become resentful or lose confidence. A recent study has shown how such
attitudes may manifest themselves in certain post-succession strategies with particularly dire
performance consequences (Miller et al., in press). Thus, research on how the commun-
ication gap may affect the succession process and succession decision and how that gap
might be closed would be particularly valuable.
7. Conclusions
Successful succession has two dimensions in family firms. One is satisfaction with the
process and the other is performance of the firm after succession. In this article, we presented
the results of a partial test of a comprehensive model on satisfaction with the succession
process developed by Sharma et al. (2001). The data show that incumbents and successors
differ significantly in their perceptions about each other and about relationships among family
members. Researchers (e.g., Handler, 1989) have suggested that family members’ perceptions
may be different, and this study confirms the existence of statistically significant differences
in the context of the succession process. This is an important contribution of the study
because the results imply that empirical research on family business must prepare for different
perceptions and views. At the minimum, this requires empirical results to be qualified
according to which particular family stakeholder group is studied.
16. 682 P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687
Four out of the five hypotheses were supported or partially supported by the regression
results. Incumbents and successors agree that succession planning and family members’
acceptance of individual roles in the business contribute to their satisfaction with the
succession process. They also agree that the decision by family members to continue the
business is not an important determinant of their satisfaction.
They differ in terms of whose attitude is more important in determining their own
satisfaction with the process. Incumbents believe that the willingness of successors to
take over is a significant contributor to their satisfaction, but their own propensity to step
aside is not. Conversely, successors believe that the incumbent’s propensity to step aside
strongly affects their satisfaction and that their own willingness to take over has no
effect.
The results empirically confirm some widely held beliefs, but they also point out a
serious misalignment of perception among family members. Finally, they consistently point
out the importance of investigating more than one stakeholder group when studying family
business.
This study assumes that the incumbent has control over the succession process. In all
cases, the families did have majority ownership of the firms, but we did not verify whether
the incumbent had ownership control or, at least, controlled the dominant familial coalition.
We do not know how this may limit the generalizability of the conclusions. Thus, our study
should be seen as a first step toward understanding satisfaction with the success process
within family firms. Only additional studies on other samples will prove the extent to which
the evidence gathered here can be generalized.
Acknowledgements
We thank Michael Hitt, William Schulze, the guest editors, and three anonymous reviewers
for their helpful comments on earlier versions of this article. We also thank the Centre for
Family Business Management and Entrepreneurship at the University of Calgary for funding
the study. This paper is based substantially on the dissertation of P. Sharma.
Appendix A. Indicators
A.1. Satisfaction with the succession process [Alpha=.93]
Respondents were asked to indicate the extent of their satisfaction with the following on a
5-point scale where 1 = not at all satisfied, 2 = satisfied to some extent, 3 = moderately
satisfied, 4 = fairly satisfied, and 5 = completely satisfied
1. The manner in which the succession process was managed.
2. The manner in which the choice of successor was communicated to family members
actively involved in the business.
17. P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687 683
3. The manner in which the choice of successor was communicated to family members not
actively involved in the business.
4. The manner in which the choice of successor was communicated to key non-family
managers.
5. The process used to determine the potential candidates for succession.
6. The criteria used to select the successor.
7. The process used to train the successor.
8. The process used to familiarize the successor with the business.
9. The process used to familiarize the successor with the employees of the business.
10. The financial arrangements for the outgoing president of your firm upon him/her retirement.
11. The criteria used for determining the distribution of ownership after the transfer of
leadership to the successor.
12. The suitability of the chosen successor.
A.2. Propensity of the incumbent to step aside [Alpha=.68]
Respondents were asked to indicate the extent of accuracy of the following statements on a
5-point scale with 1 = not at all accurate, 2 = somewhat accurate, 3 = moderately accurate,
4 = fairly accurate, and 5 = completely accurate
1. * The outgoing president of our business did not want to let go of the leadership of the
business.
2. * The outgoing president of our business felt that his or her presence in the business was
necessary to keep it running.
A.3. Willingness of successor to take over [Alpha=.70]
Respondents were asked to indicate the extent of accuracy of the following statements on a
5-point scale with 1 = not at all accurate, 2 = somewhat accurate, 3 = moderately accurate,
4 = fairly accurate, and 5 = completely accurate
1. The successor had a great deal of confidence in his/her ability to run the business.
2. The successor had a strong desire to take over the business.
A.4. Agreement to maintain family involvement [Alpha=.73]
Respondents were asked to indicate the extent of accuracy of the following statements on a
5-point scale with 1 = not at all accurate, 2 = somewhat accurate, 3 = moderately accurate,
4 = fairly accurate, and 5 = completely accurate
1. All family members actively involved in our business were deeply committed to the
company continuing as a family business.
18. 684 P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687
2. Members of our family who were not actively involved in our business were deeply
committed to the company continuing as a family business.
3. If none of the younger family members had joined our family firm, family members of the
preceding generation would have been very disappointed.
4. The outgoing president of our business was deeply committed to continuing the business
as a family business.
5. The outgoing president of our business wanted his/her children to enter the business.
A.5. Acceptance of individual roles [Alpha=.88]
Respondents were asked to indicate the extent of accuracy of the following statements on a
5-point scale with 1 = not at all accurate, 2 = somewhat accurate, 3 = moderately accurate,
4 = fairly accurate, and 5 = completely accurate
1. Our family members accepted their roles and positions in the business.
2. Our family members accepted their relative ownership stakes.
3. Our family members understood their specific roles and responsibilities.
4. Our family members acknowledged each other’s achievements in the context of the
business.
5. Our family members encouraged each other to give his/her best efforts.
6. Members of our family actively involved in the business cooperated and worked as a
team.
7. Our family members freely expressed their opinion about day-to-day decisions in the
business.
8. * Our family members found it easier to discuss problems related to the business with
people outside the family than with each other.
A.6. Extent of succession planning [Alpha=.85]
Respondents were asked to indicate the extent of accuracy of the following statements on a
5-point scale with 1 = not at all accurate, 2 = somewhat accurate, 3 = moderately accurate,
4 = fairly accurate, and 5 = completely accurate
1. We had an unwritten succession plan for transferring the management control of our
business to the successor.
2. A list of potential successors was developed.
3. Explicit succession criteria were developed for identifying the best successor.
4. Explicit efforts were made to train potential successors for their future role in the
business.
5. Explicit attention was given to familiarize the potential successors with business prior to
the succession.
6. Explicit attention was given to familiarize the potential successors with the employees of
the business prior to the succession.
19. P. Sharma et al. / Journal of Business Venturing 18 (2003) 667–687 685
7. The decision of who the successor would be was clearly communicated to family
members active in the business.
8. The decision of who the successor would be was clearly communicated to key non-
family managers.
9. We had a formal plan regarding the roles and responsibilities of the outgoing president in
the business once leadership was transferred to the successor.
10. We had an unwritten understanding of the roles and responsibilities of the outgoing
president in the business once leadership was transferred to the successor.
11. A financial package was developed for the outgoing president’s retirement.
12. Explicit decisions were made about how ownership of our business would be distributed
after the successor takes over.
13. We had an understanding of what the business strategy would be after leadership was
transferred to the successor.
14. We had an explicit plan for the business after the transfer of leadership to the successor.
15. * We did not have any written succession plan for transferring the management control of
our business to the successor.
* Negatively coded items.
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