Governance mechanisms, family dynamics, and sustained performance: Insights from family firms

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Abstract

This study investigates governance dynamics in family firms, examining the relationship between governance mechanisms, family dynamics, and sustained performance. Combining qualitative interviews and a survey of 242 family firms, we tested hypotheses involving effective governance mechanisms, well-managed family dynamics, adoption of best practices, and successful challenge navigation. Findings supported these hypotheses. Family firms with effective governance showed better-sustained performance. Managed family dynamics correlated with improved governance outcomes. Adoption of best practices aligned with enhanced financial performance, reduced agency conflicts, and improved access to resources. Successful challenge navigation was associated with greater long-term sustainability and success. The results provide actionable insights for family firms, highlighting the importance of governance strategies. Future research could explore specific governance mechanisms’ impacts and the role of family culture. This study contributes to understanding governance dynamics’ influence on family firm performance, offering guidance for effective governance in family-owned businesses. Beyond practical insights, this study holds theoretical implications, advancing our comprehension of the intricate interplay between governance, family dynamics, and performance in family firms (Camisón-Zornoza et al., 2020; Gómez-Mejia et al., 2011).

Keywords: Corporate Governance, Family Firms, Governance Dynamics, Governance Mechanisms, Success Factors

Authors’ individual contribution: Conceptualization — B.T.; Methodology — B.T.; Validation — A.T.; Formal Analysis — B.T. and A.T.; Investigation — A.T.; Resources — A.T.; Writing — Original Draft — B.T. and A.T.; Writing — Review & Editing — B.T.; Visualization — B.T. and A.T.; Supervision — B.T.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G32, G34, L26, M13

Received: 25.05.2023
Accepted: 07.12.2023
Published online: 11.12.2023

How to cite this paper: Trebicka, B., & Tartaraj, A. (2023). Governance mechanisms, family dynamics, and sustained performance: Insights from family firms [Special issue]. Corporate Governance and Organizational Behavior Review, 7(4), 334–341. https://doi.org/10.22495/cgobrv7i4sip11