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Shared vision promotes family firm performance.

¹Weatherhead School of Management, Case Western Reserve University Cleveland, OH, USA.

Frontiers in Psychology

|June 5, 2015

Summary

Successful private family firms thrive on more than just finances. Key drivers include Shared Vision, Role Clarity, Confidence in Management, and Professional Networking, supported by strong Family Functionality.

Keywords:

effective culture family business family functionality firm performance predictive model role clarity shared vision

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Area of Science:

Business Administration
Organizational Behavior
Family Business Studies

Background:

Identifying drivers of private family firm performance is challenging.
Unique characteristics necessitate non-financial performance metrics.
Distinguishing successful from less successful family firms requires specific evaluation.

Purpose of the Study:

To identify and evaluate themes distinguishing successful family firms.
To explore if these themes form an effective organizational culture.
To assess the impact of culture on long-term firm performance.

Main Methods:

Organizational-level analysis.
Evaluation of four key variables: Shared Vision (PNS), Role Clarity (RCL), Confidence in Management (CON), and Professional Networking (OLN).
Assessment of Family Functionality (APGAR) as a supporting factor.

Main Results:

Shared Vision, Role Clarity, Confidence in Management, and Professional Networking positively impacted financial performance.
Shared Vision demonstrated the strongest positive influence.
Family Functionality played a significant supporting role.

Conclusions:

An effective family business culture (EFBC), comprising the identified variables, positively impacts long-term financial sustainability.
EFBC shows potential as a predictive non-financial model for family firm performance.