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Nonfamily Managers, Family Firms, and the Winner's Curse: The Influence of Noneconomic Goals and Bounded Rationality
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In this article, the authors explain why family-centered noneconomic goals and bounded rationality decrease the willingness and ability of small and medium-sized family firms to hire and provide competitive compensation to nonfamily managers.Abstract:
We explain why family‐centered noneconomic goals and bounded rationality decrease the willingness and ability of small‐ and medium‐sized family firms to hire and provide competitive compensation to nonfamily managers even in a labor market composed of stewards rather than agents. Family‐centered noneconomic goals attenuate the ability to attract high‐quality, nonfamily managers by promoting inferior total compensation packages, fewer opportunities for advancement, idiosyncratic strategies, and higher performance expectations. Furthermore, bounded rationality limits nonfamily managers' ability to meet performance expectations when hired. The result is the “winner's curse,” where neither the economic nor noneconomic goals of family owners are fully achieved.read more
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The Economic Institutions of Capitalism
TL;DR: The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray as discussed by the authors, and a good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan's economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker's Rule.
Journal ArticleDOI
Viewing Family Firm Behavior and Governance Through the Lens of Agency and Stewardship Theories
TL;DR: Agency and stewardship theories are prominent perspectives to examine myriad issues within family firms as discussed by the authors. Although considered opposing theories, both address the same phenomena: the individual-level phenomenon.
Journal ArticleDOI
Nonfamily Members in Family Firms: A Review and Future Research Agenda:
TL;DR: The authors synthesize the literature according to three broad, yet overlapping themes: pre-employment considerations, employment considerations, and outcomes of nonfamily employment, and then offer a future research agenda that integrates these themes to guide the advancement of knowledge on nonfamily members in family firms.
Journal ArticleDOI
Are Family Firms Good Employers
TL;DR: In this paper, the authors extend stewardship and agency theories to test competing propositions about the impact of family on employment practices using data from 14,961 private Belgian firms over a 19-year period.
Journal ArticleDOI
Conflict management in family businesses: A bibliometric analysis and systematic literature review
TL;DR: In this article, the authors map the intellectual structure of conflict management and family business to the investigation of conflicts in family firms, with the aim of contributing to the further integration of knowledge between the two fields.
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Journal ArticleDOI
The Economic Institutions of Capitalism
TL;DR: The Economic Institutions of Capitalism as mentioned in this paper is a seminal work in the field of economic institutions of capitalism. Journal of Economic Issues: Vol. 21, No. 1, pp. 528-530.
Journal ArticleDOI
Job Market Signaling
TL;DR: In this paper, the authors present a model in which signaling is implicitly defined and explains its usefulness, in which the employer is not sure of the productive capabilities of an individual at the time he/she hires him.
Book
Principles of Economics
TL;DR: In this article, the authors present a survey of the general relations of demand, supply, and value in terms of land, labour, capital, and industrial organization, with an emphasis on the fertility of land.
Journal ArticleDOI
Agency Theory: An Assessment and Review
TL;DR: In this article, the authors review agency theory, its contributions to organization theory, and the extant empirical work and develop testable propositions and conclude that agency theory offers unique insight into information systems, outcome uncertainty, incentives, and risk.
Journal ArticleDOI
Maps of Bounded Rationality: Psychology for Behavioral Economics
TL;DR: Kahneman as mentioned in this paper made a statement based on worked out together with Shane Federik the quirkiness of human judgment, which was later used in his speech at the Nobel Prize in economics.
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