The why and how of managerialization of family businesses: evidences from Italy

Abstract

This paper concerns how management processes adopted by family firms are influenced by family’s and organizational characteristics; more specifically we would like to contribute to the debate on the managerialization of family firms, by studying the determinants of the adoption of managerial systems. We consider managerialization of family business related to the diffusion of formal managerial mechanisms, both strategic planning and managerial control systems, and human resource management systems. We distinguish between determinants of managerialization related the family’s characteristics, such as involvement of family/non family managers, and organizational drivers. Differently from previous studies, we articulated family involvement in management, considering separately the involvement of family members in the top management team, in the techno-structure, and in the middle management. The research hypotheses have been tested on a sample of 99 family firms from the Novara province, in Italy. Findings highlight that more organizational and strategic complexity, than family involvement in management explain the diffusion of managerial systems. They also show that the presence of a family CFO and a family HR manager (techno-structure) is positively associated with the adoption of formal managerial mechanisms. Our results suggest that in any firm (both family and not family one, of any size, operating both in manufacturing and not manufacturing industries) when firm’s complexity increases both managerial roles, especially in terms of techno-structure, and managerial mechanisms have to be introduced.