Moving forward together? The relational dynamics of family-owners and non-family CEOs in private family firms

Abstract

When an owner hires a nonfamily CEO, family firm performance is largely dependent on the ability of both actors to form an effective team. This paper aims to examine how the owner and nonfamily CEO come to form an effective team, and the relational dynamics that come in to play in doing so. Using Schein’s helping as a theoretical frame of reference, we view team formation as a relational process between the owner and the nonfamily CEO. Adopting a grounded theory approach, we identify several relational mechanisms than can be used in order to shape roles, and form an effective team. Our study fills an important gap in the literature, as, to the best of our knowledge, we are the first to empirically examine how the owner and nonfamily CEO shape their roles and relationship over time, and what mechanisms are used to do so. Several implications and directions for future research are indicated.