The effect of ownership disparity on decision-making quality in family firm tmts: the moderating role of knowledge variety

Abstract

We use the presence of family and nonfamily managers in family firm TMTs as a driver of diversity as disparity. We argue that ownership disparity is detrimental for TMT decision-making quality. Furthermore, we state that diversity as separation and diversity as variety affect the disparity effect. Based on a unique multiple respondent sample of 284 managers from 52 Belgian private family firms, we find that the nonfamily manager ratio has a negative effect on TMT decision-making quality through ownership disparity. In addition, we find that value separation stimulates, while knowledge variety mitigates the negative effect of ownership disparity.