The Effects of Family Versus Career Role Salience on the Performance of Family and Nonfamily Firms

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Family Business Review

DOI: 10.1177/0894486508328814 2009; 22; 39 Family Business Review

Tim Barnett, Kimberly Eddleston and Franz Willi Kellermanns Firms

The Effects of Family Versus Career Role Salience on the Performance of Family and Nonfamily

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39

Family Business ReviewVolume 22 Number 1

March 2009 39-52© 2009 Family Firm Institute, Inc.

10.1177/0894486508328814http://fbr.sagepub.com

Authors’ Note: All author contributed equally to this article. Address cor-respondence to Franz Willi Kellermanns, PO Box 9581, Department of Management, Mississippi State University, Mississippi State, MS 39759; e-mail: [email protected].

The Effects of Family Versus Career Role Salience on the Performance of Family and Nonfamily Firms

Tim BarnettMississippi State University

Kimberly EddlestonNortheastern University

Franz Willi KellermannsMississippi State University and WHU

This study investigated how the relative salience of business owners’ family and career roles might influence performance out-comes in family versus nonfamily firms. Using data from 156 family and nonfamily firms, the data show that family firm status moderates the relationships such that the career role salience of a business owner is positively and more strongly associated with performance outcomes in family firms than in nonfamily firms. Conversely, the data show that family firm status negatively mod-erates the relationship between the business owner’s family role salience and expansion activities. Implications for theory and practice, as well as future research directions, are discussed.

Keywords: family role salience; career role salience; work–family relationship; social identity theory

R ecently, there have been increasing calls to incorpo-rate perspectives on work–family interaction into

research on entrepreneurship, business ownership, and the relationship between business owners and firm perfor-mance (Jennings & McDougald, 2007). Although a central theme of family business research has been the question of whether the family is a resource or a constraint to the firm (i.e., Chrisman, Chua, & Zahra, 2003; Eddleston & Kellermanns, 2007; Eddleston, Kellermanns, & Sarathy, 2008; Pearson, Carr, & Shaw, 2008; Sirmon & Hitt, 2003), relatively little research has considered the family role on nonfamily business owners—that is, owners of those firms where no other family members work in the business and where there are no intentions for transgenerational family member succession (Beehr, Drexler, & Faulkner, 1997; Lee & Rogoff, 1996). Accordingly, we know little about how the relative salience of a business owner’s family and career roles affect his or her firm’s performance or how a

business owner’s psychological attachment to his or her career and family influences the firm’s growth intentions, in either family or nonfamily firms. Thus, researchers have argued that studies of entrepreneurial business success are incomplete without attention to both family and work con-siderations (Astrachan & Jaskiewicz, 2008; Jennings & McDougald, 2007; Sundaramurthy & Kreiner, 2008).

Recent theorizing has emphasized the inherent tensions that family businesses encounter owing to the integration of family and career roles (Sundaramurthy & Kreiner, 2008). There are two basic views of family and career in the work–family literature. The conflict, or depletion, perspective views an individual’s family and career roles as being mutu-ally incompatible because of resource scarcity and drain (Greenhaus & Beutell, 1985; Powell & Graves, 2003). This view suggests that family spillover has a negative effect on an individual’s business. The second perspective—the enrich-ment, or enhancement, argument—views dual participation in career and family roles as being beneficial because of the positive spillover of attitudes, emotions, and behaviors (Rothbard, 2001). This view suggests that family spillover has a positive effect on a business. Both views of work and family highlight the importance of an individual’s roles in relation to his or her family and career.



40 Family Business Review

We draw from identity theory and social identity theory to explore how the importance that business owners place on family and career roles affects firm performance-related outcomes. To date, no known studies have compared the influence of business owners’ family and career roles on the performance of family versus nonfamily firms. Although all business owners face work–family issues, a business owner in a family firm faces a particularly strong overlap between the family and the business system (Beehr et al., 1997; Litz, 2008; Tagiuri & Davis, 1992) and is thus likely to have dual identities related to his or her membership and associated roles in both the family and the business (Stets & Burke, 2000; Sundaramurthy & Kreiner, 2008). Thus, how family firm owners deal with the inherent tension between the con-trolling family and their careers (Beehr et al., 1997; Foley & Powell, 1997; Moshavi & Koch, 2005; Sundaramurthy & Kreiner, 2008) and the emphasis that they place on family and business roles could be a particularly critical factor affecting the success or failure of family firms. For the pur-pose of this study, we consider two performance-related outcomes—business performance and expansion activi-ties—because we want to explore how the family and career role salience of family and nonfamily business owners affects their firms’ current performance and their investment in the firms’ future, through expansion activities.

Thus, our article contributes to the literature by (a) applying the conceptual lens of identity and social identity theories to an examination of the family and career roles of business owners, (b) developing differential hypotheses concerning the effects of business owners’ role saliencies on performance-related out-comes in family versus nonfamily firms, and (c) providing an exploratory empirical examination of the hypotheses. Our work is consistent with the work–family interface literature and the family embeddedness perspective in that we acknowledge the importance of work–family issues in both family and non-family firms.

Conceptual Background

Identity Theory and Social Identity Theory

Identity and social identity theorists suggest that answers to such questions as “Who am I?” “How is my identity related to other entities?” and “What is my role?” (or “What are my roles?”) provide individuals with a sense of self and a sense of one’s self in relation to other individuals or col-lectives (Ashforth, Harrison, & Corley, 2008; Stets & Burke, 2000). Identity theory defines one’s identity as the “parts of a self composed of the meanings that persons attach to the multiple roles they typically play in highly differentiated contemporary societies” (Stryker & Burke,

2000, p. 284). Identity theory is built around the concept of roles and the process of identification with multiple roles, and it suggests that when a particular role is activated, indi-viduals act to fulfill the expectations associated with the role (Stets & Burke, 2000; Straub, Keil, & Brenner, 1997; Stryker, 1968, 1980). According to the theory, the salience, or importance, of a particular role depends on (a) the extent to which one is embedded in the identity (i.e., the more persons in a social structure to whom the identity ties an individual) and (b) the relative strength of one’s ties to oth-ers who share the identity (Stets & Burke, 2000; Stryker & Serpe, 1994). Identity theory suggests that individuals will strive to enact salient identities by acting in ways that emphasize their role within the relevant social structure and by displaying behaviors that are consistent with the expec-tations that others have of someone who is occupying a particular role (Stryker & Serpe, 1994).

Social identity theory defines one’s social identity as “that part of an individual’s self-concept which derives from his knowledge of his membership of a social group (or groups) together with the value and emotional significance attached to that membership” (Tajfel, 1978, p. 63). Social identity theory also acknowledges the importance of role salience but views it somewhat differently. This theory suggests that indi-viduals self-categorize into group-based identities, which leads them to emphasize the similarities between themselves and other group members (the in-group) and the differences between themselves and nongroup members (the out-group; Ashforth & Mael, 1989). In this conception, role salience is greatly affected by the situational context (tasks, goals, and events) and the fit between one’s group categorization and aspects of the situational context (Hogg & Terry, 2000). Both theories of identity concur that individuals possess multiple identities and that these may exist, at any given time, in a salience hierarchy, which is the relative importance of identi-ties to an individual.

Individuals’ sense of identification with roles (identity theory) and groups (social identity theory) have subse-quently been shown to affect a variety of cognitive, affec-tive, and behavioral outcomes (Ashforth et al., 2008). In organizational studies, identification with the organization has been shown to positively influence job involvement, job performance, and organizational citizenship behaviors (Ashforth et al., 2008). However, because identification processes have an inherent reference to the collective (e.g., the family, the workgroup, the organization, the career), an individual’s sense of identity with one or more of these external entities can potentially affect collective-level out-comes as well as individual-level outcomes (Albert, Ashforth, & Dutton, 2000; Hogg & Terry, 2000; Riketta, 2005). Given business owners’ intense effect on the cultures



Barnett et al. / Family Versus Career Role Salience 41

of their firms (Schein, 1983), their sense of identity may have a profound impact on their firms’ functioning and per-formance. Two identities that are central in most people’s lives are those of their family and career (Honeycutt & Rosen, 1997; T. M. Lobel & St. Clair, 1992). Although non-family firm owners appear better apt at segmenting their family and career roles, for family firm owners the overlap-ping nature of these roles may complicate firm management (Sundaramurthy & Kreiner, 2008).

Our discussion so far indicates that whether a business is a family or nonfamily firm is an important element in understanding the impact of business owners’ family and career role salience on performance outcomes. Indeed, the situational context is stressed as a key element in social identity theory (Hogg & Terry, 2000), which should be considered when evaluating the aforementioned relation-ships. Accordingly, we have developed context-specific hypotheses, which are portrayed in Figure 1 and detailed in the subsequent paragraphs. As the figure shows, we argue that the relationship between the two types of salience and business outcomes are contingent on the type of firm (i.e., family or nonfamily).

Family and Career Roles of Business Owners in Family and Nonfamily Firms

The literature on work–family interaction suggests that the family life and work life of individuals cannot always be separated and that individuals must find balance in the importance with which they regard family and work/career (Day & Chamberlain, 2006; Konrad & Mangel, 2000). Empirical studies, although showing some inconsistency, have predominately shown that relative family and career role salience affects work–family conflict and a variety of other organizational and career outcomes (Day & Chamberlain, 2006; Frone & Rice, 1987; Rothbard, 2001; Ruderman, Ohlott, Panzer, & King, 2002). For example, individuals who strongly identify with their family roles have been found to highly value balance between their work and family lives (Honeycutt & Rosen, 1997). In com-parison, individuals who strongly identify with their career roles are more willing to expend extra effort at work and to achieve career success (T. M. Lobel & St. Clair, 1992).

The above-mentioned research, however, has not con-sidered the family and career role salience of business own-ers, nor has it compared the effects of business owners’ family and career role salience in family versus nonfamily firms. Business owners generally have a strong impact on their organization (Schein, 1983), and the top management team literature suggests that the perceptions and attitudes of

top managers affect firm-level performance outcomes (e.g., Hambrick, 2005; Hambrick & Mason, 1984; Kellermanns, Walter, Lechner, & Floyd, 2005). Thus, we expect that the identification of business owners with their family and career roles is likely to influence not only their cognitions, affect, and behavioral outcomes at the individual level but also the performance-related outcomes of their firms.

Business owners, like employees of organizations and individuals in general, are likely to define their identities in terms of social categories or groups, as well as in terms of the roles that they occupy within these groups (Stets & Burke, 2000). Two roles occupied by essentially every business owner, in either family or nonfamily firms, pertain to the owner’s family and the owner’s career. The salience of these two roles to the business owner could have impor-tant implications for organizational performance in both family and nonfamily firms, and the general organizational literature has considered the impact of identification and role salience on a variety of attitudinal and behavioral vari-ables in organizational settings (Ashforth et al., 2008). However, there has been little (if any) family firm research that has explicitly considered the importance of family business owners’ sense of their career and family roles.

A business owner of a family firm faces a strong overlap between the family and the business system (e.g., Beehr et al., 1997; Litz, 2008; Sundaramurthy & Kreiner, 2008; Tagiuri & Davis, 1992) and is likely to form dual identities related to his or her membership and associated roles in both the family and the business (Stets & Burke, 2000). Thus, how family firm owners deal with the inherent tension between the controlling family and their careers (Beehr et al., 1997; Foley & Powell, 1997; Moshavi & Koch, 2005) and the emphasis that they place on family and business

Businessperformance /

expansion activities

H1

Family firm status(family versus

nonfamily)

Family rolesalience

Career rolesalience

H2

Figure 1 Theoretical Model




issues could be a critical factor affecting the success or fail-ure of family firms. The salience of family firm owners’ family and career roles may have key performance implica-tions for themselves and their businesses (Day & Chamberlain, 2006; Greenhaus & Powell, 2003; S. A. Lobel, 1991), par-ticularly because they are not able to segment and separate their career and family roles as easily as nonfamily firm leaders (Beehr et al., 1997).

Within the context of family firms, the literature is replete with arguments that family firms face work–family issues not faced by nonfamily firms (e.g., Schulze, Lubatkin, Dino, & Buchholtz, 2001). These issues generally center on an overemphasis on relationships inherent within the fam-ily at the expense of the business (e.g., Barnett & Kellermanns, 2006; Schulze, Lubatkin, & Dino, 2002, 2003b). Family firm owners must grapple with the dilemma regarding “whether the family exists for the businesses or the business exists for the family” (Sundaramurthy & Kreiner, 2008, p. 427). Therefore, we suggest here that because of the unique nature of family firms, the salience of business owners’ family and career identities will be dif-ferently associated with performance-related outcomes in family firms than in nonfamily firms.

The confluence of the family and the business creates unique opportunities for family firms, but it can also lead to difficult problems. Because of the pervasive influence of family members and family dynamics, control and coor-dination among family employees are needed (Davis & Harveston, 2001). Based on theories of identity and social identity, it is possible that a family firm owner could regard the family as being more salient than the business and could thus overemphasize relationship concerns at the expense of business concerns. Family firms face poten-tially harmful effects not confronted by nonfamily firms, such as parental altruism, nepotism, and adverse selection (e.g., Schulze et al., 2001, 2002, 2003a, 2003b). Although these problems each have a complex set of causes and effects, they all share the underlying problem of a relative overemphasis on the family and family system at the expense of the business. Therefore, the primary issue in family firms might well be ensuring that relationship-based concerns related to the family do not become so important to family firm owners that they prevent the effective functioning of the business. That is, in family firms, performance problems may occur if managers—particularly, top managers who are family members—have difficulty placing emphasis on career-based concerns rela-tive to family-based concerns (Kets de Vries, 1996; Moshavi & Koch, 2005).

Family firms that place too much emphasis on the family domain and on protecting family harmony may compromise firm performance because resource accumulation, develop-ment, and deployment are not effectively pursued (Chrisman et al., 2003). Furthermore, a heavy emphasis on relation-ships may cause owners of family firms to make resource allocation decisions guided by the family principle of need, as opposed to the business principle of merit (Lansberg, 1983). For example, parental altruism may cause family firm owners to have blind faith in their employed children, thereby leading to agency problems (Lubatkin, Schulze, Ling, & Dino, 2005) and the continued provision of wealth to the children regardless of their contribution to the firm (Van den Berghe & Carchon, 2003).

However, for nonfamily business owners, studies often suggest that organizations should implement family-friendly policies and procedures to facilitate a greater emphasis on family and on “balanced” career and family concerns (Kopelman, Prottas, Thompson, & Jahn, 2006). The organi-zational behavior literature has long espoused the impor-tance of positive employee relationships and building a “family-like” atmosphere in nonfamily firms (Grover & Crooker, 1995; Meyer, Stanley, Herscovitch, & Topolnytsky, 2002; Thompson, Beauvais, & Lyness, 1999). In nonfamily firms, where employees are much less likely to be family members, an emphasis on relationships and family-friendly practices can be expected to increase organizational com-mitment and employee retention (Honeycutt & Rosen, 1997), thereby enhancing performance outcomes. Furthermore, whereas nonfamily firm owners with high family role salience may relish the family-like atmosphere created, the risks associated with parental altruism and nepotism are absent. Therefore, strong family role salience should be particularly beneficial to nonfamily firms. Accordingly, we hypothesize the following:

Hypothesis 1: Family firm status will moderate the rela-tionship between business owners’ family role salience and performance-related outcomes such that the relationship will be negative and of greater mag-nitude in the family firm than in the nonfamily firm.

By stressing the business system, family firm own-ers can foster an objective and disciplined environment (Sundaramurthy & Kreiner, 2008). Family firm owners with strong career role salience may be more apt to create proce-dures regarding the hiring, compensation, and promotion of family members. High career role salience may also indi-cate a family firm owner’s dedication to the business and




insistence that the family accommodates the needs of the business, instead of the other way around. Because family firms must focus on the business by supporting growth and entrepreneurial behavior to remain profitable and survive (Salvato, 2004), a strong career role salience may be espe-cially critical for family firms. Indeed, high-performance family firms are more likely to engage in strategic planning (Barringer, Jones, & Lewis, 1998) and more likely to place the highest importance on business success, as opposed to family aspects of the firm (McCann, Leon-Guerrero, & Haley, 2001). Therefore, strong career role salience should be particularly beneficial to family firms.

In contrast, career role salience may be less critical to the success of nonfamily firms, given that nonfamily firm owners do not feel the same pressure for long-term survival as do family firm owners, who strive to provide jobs and wealth for future generations (Kellermanns & Eddleston, 2006; Salvato, 2004). Rather, issues of work–family con-flict and the relative salience of managers’ family and career roles in the general management literature are often couched in terms of finding ways for managers to increase the salience of their family role relative to their career role (Day & Chamberlain, 2006; Frone & Rice, 1987).

Accordingly, we hypothesize that family firm owners with higher levels of career salience will benefit more strongly than nonfamily members. Therefore, we expect family firm status to moderate the relationships between career role salience and performance-related outcomes as follows:

Hypothesis 2: Family firm status will moderate the rela-tionship between business owners’ career role salience and performance-related outcomes such that the rela-tionship will be positive and of greater magnitude in the family firm than in the nonfamily firm.

Method

Sample

We gained permission from the alumni association of a major U.S. private university to survey alumni business owners. As such, we initially identified a group of approxi-mately 7,200 alumni who were CEOs or in other top man-agement positions. Within this group, about 1,900 alumni provided a job title that included the term owner or founder. Some of these alumni made reference to the nature of the firm in their job titles (e.g., accountant/owner, attorney/owner, pharmacist/owner, bar and restaurant owner,

bookshop owner); others focused solely on their relation-ship to the firm (e.g., founder/CEO, co-founder/president, franchise owner, president/CFO). Alumni who provided such job titles were considered to be business owners and thus represented the population of the study. In an effort to obtain a similar number of male and female responses, we mailed surveys to all the female business owners in the population (n = 594; i.e., the entirety of female owners) and a similar number of randomly selected male business own-ers (n = 614).

Of the 1,208 surveys distributed, 156 (12%) were returned. However, because some surveys had missing data or were not from business owners, only 121 were included in the final data analysis. Forty-six respondents (38%) self-identified their businesses as family firms, whereas 75 respondents (62%) said that their companies were not family firms. Furthermore, 59% of respondents were male, 33% had a graduate degree, 81% were mar-ried, and 48% had children living with them. The average age of respondents was 51 years, and 90% both owned and managed their firms (10% only owned their firms). On average, respondents’ businesses had been in opera-tion for 23 years, had 22 employees, and had generated approximately $1.6 million in sales the previous year. The businesses were from a variety of industries, with the more commonly represented industries including service and hospitality (20%), retail and wholesale (19%), biotech and health care (17%), business services (9%), real estate (7%), and architecture (7%).

Measures

All multi-item constructs and their associated alphas are listed in the appendix.

Independent variables and moderator. Family role salience and career role salience were assessed with four items, primarily adapted from Lodahl and Kejner’s three-item Job Involvement Scale (1965). For family role salience, the word family was substituted for job. The three items were as follows: “A major source of satisfaction in my life is my family,” “Most of the important things that happen to me involve my family,” and “I am very much involved personally in my family.” A fourth item, based on T. M. Lobel and St. Clair’s work (1992), was also used: “Most of my interests are centered around my family.” Respondents were asked to indicate the extent to which they agreed with each statement (1 = strongly disagree, 7 = strongly agree). These items were averaged to yield a fam-ily role salience score (α = .89). Career role salience was




assessed with the same four items, with the word career substituted for family. These four items were averaged to yield a career role salience score (α = .71).

Family firm status, the moderator variable in our study, was assessed by self-reports, which were utilized to classify the firms as family or nonfamily firms. For the purpose of the study, family firms were coded as 1; nonfamily firms were coded as 0.

Dependent variables. Performance outcomes were assessed with two perceptual measures. The subjective mea-surement of performance was necessary because the firms in our sample were all closely held and because the willing-ness to report objective data could not be expected (Love, Priem, & Lumpkin, 2002). The first of the performance outcome measures, termed business performance, utilized six performance-related questions regarding growth in sales, growth in market share, growth in number of employ-ees, growth in profitability, profit margin on sales, and the ability to fund growth from profit (α = .87; e.g., Eddleston & Kellermanns, 2007). Respondents were asked to indicate if their past performance was much worse, about the same, or higher than their competitors in terms of each indicator. The individual scores were then averaged to form an overall performance score (Dess & Robinson, 1984), where higher values connote better performance. This comparison to similar firms controls for industry effects and has been shown to correlate with objective performance data (Dess & Robinson, 1984; Love et al., 2002).

The second performance outcome measure, termed busi-ness expansion, is based on a measure of business expan-sion developed by Zahra (1996) to measure venturing activities. Four items were created to assess the degree to which respondents had expanded and built their businesses. Respondents rated the extent to which they agreed with the following items (1 = strongly disagree, 7 = strongly agree): “In the last three years, my business has significantly expanded its current facilities,” “In the last three years, my business has spent heavily on advertisement and promo-tion,” “In the last three years, my business has invested heavily in employee training and development,” and “In the last three years, my business has steadily expanded distri-bution channels.” The four items were averaged to create a final score (α = .77).

Controls. We utilized five control variables in our analyses. For business age and weekly hours worked, respondents were asked how many years their firms had been in operation and how many hours per week they had

typically devoted to their businesses. These controls ensured that we would not get effects from “lifestyle busi-nesses” in our sample. We controlled for age of the orga-nization to address the potentially negative effects of liability of newness (Stichcombe, 1965) and the rigidities that may cause experimentation to decline over time (i.e., expansion activities) and thereby negatively affect perfor-mance (e.g., Durand & Coeurderoy, 2001; Hannan & Freeman, 1984). As is customary in the career-related research, we further controlled for the potential impact of the number of children living at home (i.e., Judge, Cable, Boudreau, & Bretz, 1995).

We further controlled for satisfaction with employees and satisfaction with business success because the underly-ing level of satisfaction may affect an individual’s percep-tion of his or her business. Satisfaction with employees was measured with three items that gauged respondents’ percep-tions of the quality of the socioemotional aspects of their career as it pertained to the relationships that they had with their employees.

Specifically, respondents were asked to indicate how satisfied they were with the following items: having sup-portive employees, working as part of a team, and devel-oping mutually beneficial relationships with employees (1 = not at all satisfied, 5 = very satisfied). The three items were averaged to create the final scale (α = .83). Satisfaction with business success was measured with four items designed to assess respondents’ perceptions of the status-based aspects of their career as they pertained to their business. Respondents were asked to indicate how satisfied they were with the following items: growing a world-class business, leading a large rapidly growing enterprise, building a company with a strong reputation, and earning a lot of money (1 = not at all satisfied, 5 = very satisfied). The four items were averaged to create the final scale (α = .79).

Results

Table 1 shows the means, standard deviations, and zero-order correlations. We standardized the variables (Cronbach, 1987) and calculated the variance inflation factors (all < 1.77) and the condition indices (all < 10.66) to check for multicollinearity. All indices were below the suggested warning levels (Hair, Anderson, Tatham, & Black, 1998); thus, multicollinearity did not appear to be a major concern. We further checked for common method bias, as suggested by Podsakoff and Organ (1986), given that all our items




were collected with the same survey. We entered the items of the control, independent, moderator, and dependent vari-ables into one factor analysis. No common method factor emerged, and when business performance was utilized as the dependent variable, the first factor accounted for only 20.78% whereas the remaining factors accounted for 48.22%. Similarly, when the dependent variable was expansion activities, the first factor in the analysis accounted for 20.57% of the variance, whereas the remaining factors accounted for 52.18%. Accordingly, we concluded that common method bias was not a significant concern in the current study.

The hypotheses were tested via regression analyses, presented in Table 2 (dependent variable = business perfor-mance) and Table 3 (dependent variable = expansion activities). In the first models, the control variables and main effects were entered. In the second models, the moderator variable (family firm status) was entered. In the third models, the interaction effects were entered to test for moderation.

Main effects. Family role salience was not significant for either dependent variable. The relationship between our outcome variables and career role salience was not consis-tent. When business performance was the dependent vari-able (Table 3), career role salience was found to be significant (β = .36, p < .001); however, the relationship was not significant with business performance as the dependent variable.

With business performance as the dependent variable (Table 2), family firm status was associated with business performance (β = .23, p < .05) such that family firms had a stronger performance than that of nonfamily firms.

Furthermore, satisfaction business success, one of our con-trol variables, was significantly related to both dependent variables.

Table 1 Means, Standard Deviations, and Correlations

Variable M SD 1 2 3 4 5 6 7 8 9

1. Business age 22.67 18.77 2. Weekly hours worked 48.65 14.56 .14 3. No. of children in living in household 0.83 1.01 –.13 –.14 4. Satisfaction with employees 3.84 0.76 –.13 .01 .10 5. Satisfaction with business success 3.62 0.74 .20* .10 .09 .55*** 6. Family firm status 0.38 0.49 .05 –.09 –.06 .05 –.07 7. Career salience 4.98 0.99 –.01 .19* –.03 .04 .21 .07 8. Family salience 5.85 1.21 .06 .02 .33*** .04 .18† .17† –.12 9. Business performance 2.16 0.50 –.05 .16† .12 .18* .31*** .17† .05 .13 10. Expansion activities 3.64 1.52 .07 .11 .02 .35*** .41*** .07 .37*** .04 .35***

Note: N = 121.†p < .10. *p < .05. ***p < .001.

Table 2 Results of Regression Analysis: Dependent

Variable—Business Performance

Variable Model 1 Model 2 Model 3

Control variables Business age –.13 –.15 –.18Weekly hours worked .15 .18* .16†

Satisfaction with employees –.02 –.06 –.10Satisfaction with business .31** .36** .39***

success No. of children in living .08 –.12 .10

in household Independent variables

Career role salience .03 –.00 –.07Family role salience .06 .00 –.03

Moderator Family firm status .23* .24*

Interaction terms Family Salience × Family –.04

Firm Career Salience × Family .22*

Firm ∆R2 .046* .045*

R2 .145 .191 .235Adjusted R2 .092 .134 .167F 2.756** 3.332** 3.419***

Note: Standardized regression weights.†p < .10. *p < .05. **p < .01. ***p < .001.




Moderation tests with business performance as depen-dent variable. In Model 3, when the interaction terms were entered into the regression analysis, a significant change in R2 was observed (∆R2 = .045, p < .05). With business performance as the dependent variable, family firm status did not moderate the relationship between family role salience and business performance (Hypothesis 1). Hypothesis 2 was supported; that is, the relationship between career role salience (β = .22, p < .05) and business performance was moderated by family firm status.

To facilitate interpretation, the significant interaction was plotted (Figure 2). It shows that although career role salience has a positive effect on the performance of family firms (as predicted), it has a negative effect on the perfor-mance of nonfamily firms.

Moderation tests with business expansion as dependent variable. In Model 3, when the interaction terms were entered into the regression analysis, a significant change in R2 was observed (∆R2 = .036, p < .05). In contrast to the

results for Hypothesis 1 with business performance as the dependent variable, family firm status moderated the rela-tionship between family role salience and business expan-sion, which supports Hypothesis 1. Hypothesis 2 was not supported by this set of regression analyses; that is, family firm status did not moderate the relationship between career role salience and business expansion.

To facilitate interpretation, the significant interaction was plotted in Figure 3. The figure shows that whereas family role salience has a negative effect on the business expansion activities of family firms (as predicted), it has a positive effect on the business expansion activities of non-family firms.

Discussion

First, we would briefly like to review some of the main effects before we discuss our hypotheses in greater detail.

Table 3 Results of Regression Analysis: Dependent

Variable—Expansion Activities

Variable Model 1 Model 2 Model 3

Control variables Business age –.01 –.02 –.01Weekly hours worked .03 .03 .03Satisfaction with employees .12 .12 –.13Satisfaction with business .32** .33*** .35***

success No. of children in living in –.04 –.03 –.06

household Independent variables

Career role salience .37*** .36*** .38***

Family role salience .02 .01 .05Moderator

Family firm status .06 .13Interaction terms

Family Salience × Family –.19*

Firm Career Salience × Family –.11

Firm ∆R2 .003 .036*

R2 .303 .306 .342Adjusted R2 .262 .259 .285F 7.393*** 6.513** 6.030***

Note: Standardized regression weights.*p < .05. **p < .01. ***p < .001.

Figure 2 Career Role Salience and Family Firm Status




Neither family role salience nor career role salience exhib-ited a significant main effect on business performance. However, career role salience was found to have a signifi-cant positive impact on expansion activities. This finding supports the emphasis in the entrepreneurship and small business literature that the motivation and focus of the busi-ness owner is essential to entrepreneurial behavior (e.g., Wiklund, Davidsson, & Delmar, 2003). Indeed, people that exhibit high career role salience are likely to put in extra effort at work (Lobel & St. Clair, 1992).

For Hypotheses 1 and 2, we tested the moderating effects of family firm status using two performance- related measures: perceived business performance and business expansion. In terms of family role salience and family firm status, Hypothesis 1 was supported when our measure of business expansion was utilized, but it was not supported in the case of our business performance measure.

Specifically, higher levels of family role salience had a relatively strong and negative association with business expansion in family firms, but it had the opposite effect in nonfamily firms (Figure 3).

Conversely, Hypothesis 2, which concerned the moder-ating effect of family firm status on the career role salience–performance outcome relationship, was sup-ported when our measure of business performance was utilized, but it was not supported when our measure of business expansion was utilized. In this case, family firm owners with high career role salience experienced higher levels of business performance than nonfamily firm own-ers with high career role salience. (Figure 2).

These findings are in line with earlier research that sug-gests that both the family and the business are necessary for the family firm to perform well (Aldrich & Cliff, 2003; Bird, Welsch, Atrachan, & Pistrui, 2002; Stafford, Duncan, Danes, & Winter, 1999). Our results are consistent with the view that higher levels of career role salience, potentially reflecting higher levels of professionalism, is beneficial in family enterprises. Professionalizing the family firm has often been suggested as a solution to family firm problems (e.g., Levinson, 1971). Furthermore, internal family dynam-ics should not dominate the business, because negative consequences may surface (Schulze et al., 2001); that is, as the family focus of family firm owners becomes stronger, expansion activities become restricted.

The interpretation of our interaction effects for nonfamily firms may point to potential benefits of work–family enrich-ment (Day & Chamberlain, 2006; Frone & Rice, 1987; Ruderman et al., 2002). In nonfamily firms, where the owner often has a more segmented work and family life, stronger family role salience may be associated with emotional sup-port that motivates the owner to invest in expansion activi-ties. In other words, in nonfamily firms expansion activities may occur unconstrained by negative family influences.

Our findings for business performance are complex as well. According to the employed identity-based perspec-tives, family firm owners need to emphasize their career role to avoid the potentially negative and immanent family-based problems associated with family businesses, such as nepotism (e.g., Schulze et al., 2001, 2002, 2003a, 2003b). By way of contrast, the work–family interface literature suggests that the opposite problem exists in non-family firms (i.e., an overemphasis on career roles to the detriment of family roles). Indeed, the interaction shows higher levels of career role salience in nonfamily firms to be negatively related to business performance.

Figure 3 Family Role Salience and Family Firm Status




Implications, Limitations, and Future Research

Before discussing the implications of our findings, a few limitations of our study should be noted. Our study is cross-sectional; thus, we cannot infer causal relationships (Tabachnick & Fidell, 1996). We further need to acknowl-edge that our performance-related variables are self- reported. Self-reported performance measures are common in family firm research because public performance data are not available for privately held family firms. Our per-formance measures have been widely utilized in family research (e.g., Kellermanns & Eddleston, 2006) and non-family research (e.g., Dess & Robinson, 1984; Love et al., 2002; Zahra, 1996). Our approach to capture performance as multifaceted constructs is also in line with a recent call in the literature by Boyd, Gove, and Hitt (2004), who encourage the use of multiple indicators to ensure the high reliability of performance measures.

The reliance on the alumni of an institution in the Northeastern United States to collect data potentially placed constraints on the representativeness of our data. Indeed, our sample included a higher percentage of non-family firms than what one would normally expect (e.g., Chrisman, Chua, & Litz, 2004; Chua, Chrisman, & Chang, 2004). However, we have no reason to believe that the find-ings of our study cannot be generalized to family and non-family firms in general, despite the specific distribution of firm type in our sample.

Furthermore, our study distinguished between only fam-ily and nonfamily firms. However, prior research has iden-tified a multitude of family structures and characteristics that influence a firm (e.g., Gersick, Davis, Hampton, & Lansberg, 1997; Kellermanns, 2005; Klein, Astrachan, & Smyrnios, 2005; Sharma, 2003; Sharma & Manikutty, 2005; Westhead & Cowling, 1998). Although our approach is characteristic of much of the empirical research (e.g., Chrisman et al., 2004; Chua et al., 2004; Schulze et al., 2003a), future research may want to investigate if the find-ings vary by different family firm structures (Kellermanns, 2005; Sharma & Manikutty, 2005).

Our findings have implications for identity research and research on the work–family interface. Research has recently identified the interpersonal level as an underresearched area of identification in the workplace (Sluss & Ashforth, 2007), and the entrepreneurship literature has been criticized for neglecting business leaders’ personal lives (Jennings & McDougald, 2007) and personal definitions of career

success (Eddleston & Powell, 2008). Our study shows that family role salience and career role salience differentially affect the performance of family and nonfamily firms. As such, we not only provide empirical support for the impor-tance of an interpersonal focus in identity research but expand the dependent variable beyond the commonly stud-ied individual-level outcomes, by focusing on organiza-tional performance.

We would also like to point to life cycle research as an important avenue for future research (e.g., Hambrick & Fukutomi, 1991; Hoy, 2006; Miller & Shamsie, 2001; Peiser & Wooten, 1983). The relationship between the investigated independent variables and performance may be moderated by the life cycle that the organization is in, as well as the life cycle of the business owner. Different levels of family and career role salience may be more appropriate in certain stages of the firm. For example, a stronger career focus may be more appropriate in the founding phase than in later stages. Similarly, the owner probably needs to be more career oriented in earlier stages of his or her tenure than in later stages, to achieve superior performance.

Last, we briefly need to mention that in our sample, family firms performed at higher levels than those of non-family firms. Indeed, there has been a continued debate in the family firm literature concerning if and when family firms versus nonfamily firms exhibit superior perfor-mance (e.g., Anderson & Reeb, 2003; Bennedsen, Nielsen, Perez-Gonzalez, & Wofenzon, 2007; Villalonga & Amit, 2006). Although our study cannot resolve this discussion, we nevertheless suggest that caution be exercised when applying evidence gathered from large companies to small privately held family firms. Indeed, the benefits of stewardship behavior and lower agency cost owing to family ownership may be easier realized in smaller family firms (e.g., Chrisman et al., 2004; Eddleston & Kellermanns, 2007) than in larger family firms. Accordingly, future research is necessary to further clar-ify performance differences observed in smaller family and nonfamily firms.

In sum, our study demonstrates that the relationship between role salience and performance in family and non-family firms is complex. Consistent with prior research, our findings suggest that in family firms, the business system must be considered to achieve superior performance. We hope that this study inspires future research investigating the interrelationships between the family and the business system.




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Appendix Scale Items and Reliabilities

Construct Items

Controls Satisfaction with employees (α = .83) How satisfied are you with each of the following sources of career satisfaction? Having supportive employees Working as part of a team Developing mutually beneficial relationships with employeesSatisfaction with business success (α = .79) How satisfied are you with each of the following sources of career satisfaction?

Growing a world-class business Leading a large, rapidly growing enterprise Building a company with a strong reputation Earning a lot of moneyIndependent variables

Family role salience (α = .89) A major source of satisfaction in my life is my family. Most of the important things that happen to me involve my family. I am very much involved personally in my family. Most of my interests are centered around my family.Career role salience (α = .71) A major source of satisfaction in my life is my career.

Most of the important things that happen to me involve my career. I am very much involved personally in my career. Most of my interests are centered around my career.Dependent variables

Business performance (α = .87) Over the past three years, how would you rate your business’s performance compared to your competitors in regards to . . .

Growth in sales Growth in market share Growth in number of employees Growth in profitability Profit margin on sales Ability to fund growth from profitsExpansion activities (α = .77) In the last three years, my business has significantly expanded its current facilities In the last three years, my business has spent heavily on advertisement and promotion.

In the last three years, my business has invested heavily in employee training and development.

In the last three years, my business has steadily expanded distribution channels.




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Tim Barnett is a professor of management at Mississippi State University, where he is a founding fellow of the Center for Family Enterprise Research. He has published more than 50 articles in such journals as the Academy of Management Journal, Personnel Psychology, Entrepreneurship Theory and Practice, and Human Relations, among many others.

Kimberly Eddleston is an associate professor of entrepreneurship and innovation in the College of Business Administration at Northeastern University, where she holds the Tarica-Edwards Research Fellowship.

Franz Willi Kellermanns is the Henry Family Notable Scholar and asso-ciate professor of management in the College of Business at Mississippi State University. He holds a joint appointment with the INTES Center for Family Enterprises at the WHU-Otto Beisheim School of Management (Germany).



The Effects of Family Versus Career Role Salience on the Performance of Family and Nonfamily Firms

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