Unraveling the impact of bifurcation bias on family firm performance: the mediating roles of status conflict and organizational citizenship behavior

Abstract

This study investigates how bifurcation bias—the asymmetric treatment of family and non-family managers in family firms—affects firm performance. While prior research has theorized that bifurcation bias undermines organizational effectiveness, empirical evidence remains scarce. Drawing on social exchange theory and equity theory, we propose and test a serial multiple-mediation model in which bifurcation bias reduces family firm performance through its impact on status conflict and organizational citizenship behavior (OCB). We develop a novel continuous measure of bifurcation bias across key HR practices, capturing favoritism toward either family or non-family managers. Using survey data from Belgian private family firms combined with financial performance data from the BEL-FIRST database, our findings are expected to provide the first empirical evidence of a direct negative relationship between bifurcation bias and firm performance, while uncovering the mediating roles of status conflict and OCB. This work contributes to family business research by opening the “black box” of how biased HR practices translate into dysfunctional outcomes, advancing conflict and pro-organizational behavior literature, and offering implications for the professionalization of family firms.