Promoting Nonfamily Managers’ Felt Inclusion in Family Business: Role of Owner Paternalism

Abstract

Nonfamily managers play a vital role in family businesses. However, they often feel like “second-class citizens” within the firm, which harms their work achievements. Therefore, it is important to explore ways to reduce the sense of marginalization of nonfamily managers. In the study, we propose that owner paternalism can enhance nonfamily managers’ perceived inclusion. Further, with a higher level of felt inclusion, nonfamily managers become more engaged in their work and create more value for the family business. Survey data were collected from 183 matching data of owners and nonfamily managers in China. The hypotheses were largely supported: (1) owner paternalism was positively related to nonfamily managers’ work engagement and job performance through felt inclusion; (2) Nonfamily managers’ power distance orientation positively moderated the relationship between owner paternalism and the non-family manager’s felt inclusion, as well as the serial indirect relationship between owner paternalism and nonfamily managers’ job outcomes through felt inclusion and job engagement. Both theoretical and practical implications were discussed.