The effect of nonfamily managers on decision-making quality in family firm TMTs: The role of intra-TMT power asymmetries

Abstract

In this paper, we examine the impact of the presence of both family and nonfamily managers on TMT decision-making quality. Based on a unique multiple respondent sample of 284 managers from 52 Belgian private family firms, we find that a higher proportion of nonfamily managers reduces TMT decision-making quality through intra-TMT ownership power asymmetries. In addition, we find that variety in knowledge and expertise in the TMT mitigates the negative effect of intra-TMT ownership power differences on decision-making quality. As such, we argue that expertise power can be a good counterbalance for the negative impact of a higher proportion of nonfamily managers on TMT outcomes in family firms.