Tension, Adjustment Strategies, and Family Business Success for Single and Dual Role Managers

Abstract

The purpose of this research was to understand if the family or business tension of Dual Role Managers (DRM) is different than that of Single Role Managers (SRM) of family business, and the influence of various adjustment strategies that could affect family and business success. A related goal was to understand the impact of gender on family business managers’ success. The study relied on data collected from 294 households collected at two time points--the 1997 Wave 1 and 2000 Wave 2 survey panels from the National Family Business Study (NFBS). In the NFBS, the household manager was identified as the person who takes care of most meal preparation, laundry, cleaning, scheduling and family activities, and oversees child care. Therefore DRM were both household manager and business manager for the family business. Prior research has not analyzed the potential influence of family business adjustment strategies for influencing conflict and tension that may vary between DRM and SRM and also predict family or business success. The causal model developed for the study posited that adjustment strategies established in Wave 1 influence tensions in Wave 2 that affect both family and business goal attainment. The main interest concerned whether DRM versus SRM status moderates the causal process, which was tested by comparing multiple regression coefficients for DRM/SRM subgroups. Multiple regression analysis procedures involved estimating the effects of adjustments on tensions, and also the effects of tensions and adjustments directly for family business success. Other predictors of family business success included family system and business system contextual variables such as managers’ characteristics and business size. Family success measures included family income, a scale for family functionality, and another scale for family goal achievement. Business success measures were business profit, perceptions of business success reported by the business manager, and another subjective measure concerning business goal achievement. By selecting those regression models that were statistically significant, six causal models for family business success were developed with path analysis. For DRM there was support for the hypothesis that tensions decrease family business success (family functionality, family goal achievement, and business goal achievement). However tension decreased SRM success only for family functionality, which suggested that DRM seemed to be more easily influenced by tension level for family business success than SRM. The effects of DRM adjustment strategies were more positive for family functionality than for SRM: for SRM the adjustment strategy of reallocating family resources to business increases unfairness tension and thus indirectly reduces family