Effects Of Non-Family Workers On Family Business

Effects Of Non Family Workers On Family Business1effect

Several factors affect family business which include the need to maintain family relation, social factors, management of family and business. This research therefore seeks to distinguish the difference brought about when the non-family member is introduced in the executive position of a family business. The study seeks to test the hypothesis that when a non-family member is included in a family owned and managed business at the executive level the business performance is improved. The study will attract several dependent and independent variables. The independent variable will include attitude, level of social interaction, personal interests, and family conflicts.

The dependent variable on the other hand includes the business profitability level. There are intervening variables which include the impact of non-family member, the business interest and legal requirements. Literature review According to Hisrich, Peters, & Shepherd (2017) Family members are closely related to each other, and this makes management of the business mostly personal. When the members of the family tend to argue the work done, they take things to a personal and family level that could result in severe conflict and poor management of the firm (Wolff & Resnick, 2012). Organizations run by the family members strive to create a distinction between the family and business issues making it difficult for them to operate (Searing, 2016). Other members also embezzle funds for the business with the idea that it’s a family issue and rarely will legal action be taken against them (Ritonija, et al., 2015). According to the principles of economics the business and the owner should be treated as two different entities, however creating the distinction becomes difficult in the family business (Johnson, 2015). The inclusion of purely family members in the business could, therefore, be fatal at some point. According to Lussier & Hendon (2016) introduction of non-family members in family business creates a sense of increased respect for the organization. The non-family member takes the job with more seriousness than the family people which can be translated in their performance (Parkin, 2018). In most cases failure to deliver on the desired services could lead to adverse action than in the case of a family member (McLean & Yang, 2014). The decisions made by the non-family member will also be sound in fear of being victimized for poor performance. People who are related tend to have similarity in their strengths and weaknesses. Therefore, the inclusion of new member creates a diversity of knowledge in the organization (Martin, Heron, Moreno-Walton, & Jones, 2016). The diversity of knowledge in an organization helps in maintaining high-performance standards since the employees complement each other (Kushell, Spinelli, Nadaff, DeLuca, & Bolt, 2011). Most successful family-owned businesses have the family members mixed with the other members in different positions in the organization to maintain the diversity and cover the weaknesses portrayed in the family (Karlan, Morduch, & Startz, 2017). Determination of the best strategy to use therefore becomes a challenge for many people. Method The study will take the form of a survey intended to collect quantitative data. The variables to be included in the study include the number of family members employed in the family business relative to the number of non-family members. The performance of the organization will be measured through the amount of profit generated. The survey will be conducted in different organizations and results subjected to analysis and test of the hypothesis. References Aguinis, H. (2014). Test-score banding in human resource selection: technical, legal, and societal issues. Westport, Conn: Praeger. Glas, M., MirticÌŒ, D., & PsÌŒenicÌŒny, V. (2016). Family business. Transitional impacts and the EU enlargement complexity, str , . Grzywacz, J., & Handlowa, S. G. (2016). Sources of financing: the development activities of enterprises in Poland. Warsaw: SGH Publishing House. SGH Warsaw School of Economics. Hisrich, R. D., Peters, M. P., & Shepherd, D. A. (2017). Entrepreneurship. New York, NY: McGraw-Hill Education. Johnson, J. (2015). Diversity policy. Kingfisher garden centre , 1-16. Karlan, D. S., Morduch, J., & Startz, M. L. (2017). Economics. Dubuque: McGraw-Hill Education. Kushell, J., Spinelli, S., Nadaff, G., DeLuca, F., & Bolt, D. D. (2011). Introduction to the franchising case study: Subway Restaurants. Marina Del Rey, CA: Young Entrepreneurs Network. Lussier, R. N., & Hendon, J. R. (2016). Human resource management: Functions, applications, & skill development. Thousand Oaks: SAGE Publications, Inc. Martin, M. L., Heron, S. L., Moreno-Walton, L., & Jones, A. W. (2016). Diversity and Inclusion in Quality Patient Care. Cham: Springer International Publishing. McLean, G. N., & Yang, B. (2014). Creativity and Human Resource Development: An Integrative Literature Review and a Conceptual Framework for Future Research. Human Resource development review , 1-32. Parkin, M. (2018). Microeconomics. New York, NY: Pearson. Reed, S. M. (2017). A guide to the human resource body of knowledge. Hoboken, New Jersey: John Wiley & Sons, Inc. Ritonija, N., Lazar, N., Gole, P. A., MacÌŒek, A., VukasovicÌŒ, T., & al, e. (2015). Professional skills in management and leadership, entrepreneurship and communication - The e-PROFMAN project. Re-imagining learning scenarios, 2 (12), 97. Searing, E. (2016). Practising Professional Ethics in Economics and Public Policy. Netherlands: Springer. Wolff, R. D., & Resnick, S. A. (2012). Contending economic theories: neoclassical, Keynesian, and Marxian. Law and economics , 55-78.

Paper For Above instruction

The influence of non-family workers in family-owned businesses has garnered significant attention within management research. Specifically, examining how the integration of non-family members into executive roles impacts business performance reveals both potential benefits and challenges. This paper explores the relationship between non-family employment and family business success through a detailed literature review, hypotheses formulation, and methodological outline.

Introduction

Family businesses constitute a vital segment of global economies, characterized by ownership and management comprising family members. Such businesses often prioritize maintaining family harmony, social cohesion, and management control (Hisrich, Peters, & Shepherd, 2017). However, challenges such as nepotism, familial conflicts, and ethical issues occasionally necessitate appointing non-family members to executive positions (Wolff & Resnick, 2012). The primary focus of this research is to determine whether the inclusion of non-family workers enhances overall business performance, particularly under specific conditions and degrees of involvement.

Theoretical Framework and Literature Review

Introducing non-family members into family businesses can influence organizational dynamics significantly. Lussier & Hendon (2016) argue that non-family employees often bring professionalism, fresh perspectives, and diversify the knowledge base, which can enhance decision-making and operational efficiency. Moreover, non-family managers tend to take their roles more seriously due to the absence of familial loyalties, potentially increasing accountability and performance (Parkin, 2018).

Conversely, family businesses face unique challenges related to emotional conflicts, nepotism, and blurred boundaries between family and business interests (Searing, 2016). These issues can hinder objective decision-making and create organizational inefficiencies. Ritonija et al. (2015) highlight that legal and ethical ambiguities may also arise, particularly when family members embezzling funds or engaging in favoritism go unpunished, negatively impacting performance.

The inclusion of non-family workers may serve to mitigate these issues by introducing professionalism and objective judgment, which could lead to increased profitability (Kushell et al., 2011). However, the degree of non-family involvement—such as the proportion of non-family managers or the level of authority they hold—may moderate this effect. For example, higher degrees of non-family involvement could foster innovation and strategic growth, whereas superficial or limited involvement might not produce significant benefits (Karlan, Morduch, & Startz, 2017).

Thus, the hypothesized relationship presumes that increased engagement of non-family workers at the executive level positively correlates with business profitability, mediated by factors like organizational respect, conflict reduction, and diversification of skills (McLean & Yang, 2014). Understanding the strength and nature of these relationships requires empirical investigation, considering mediating and moderating variables such as family conflicts, social interaction levels, and organizational culture.

Research Hypotheses and Variables

The primary hypothesis (H1) posits that "the inclusion of non-family members at the executive level in family-owned businesses improves business performance." This hypothesis involves various independent variables—attitude towards non-family involvement, level of social interaction, personal interests of non-family managers, and family conflicts—and the dependent variable, which is the business profitability level.

The intervening variables include the degree of non-family employment (extent of non-family managerial roles), the influence of legal and ethical considerations, and business interests. The relationship between independent variables and the dependent variable is mediated by organizational respect, conflict levels, and knowledge diversity, which collectively impact profitability (Martin et al., 2016).

Methodology

This research adopts a quantitative survey design to assess the impact of non-family workforce involvement at the executive level. Data will be collected from a sample of family businesses with varying degrees of non-family employment—ranging from minimal involvement to complete managerial integration. The survey will measure variables such as the proportion of non-family managers, family conflicts, social interaction levels, and business profitability, operationalized through profit metrics.

Participants will include managers and owners from diverse industries. The data collection process will involve structured questionnaires distributed electronically, ensuring anonymity and accuracy. Data analysis will utilize statistical techniques, including regression analysis and structural equation modeling (SEM), to explore relationships between variables and test the primary hypothesis. The analysis aims to determine whether higher degrees of non-family employment at the executive level significantly associate with increased profitability, considering intervening variables like family conflicts and organizational culture.

Conclusion

This study aims to contribute to the understanding of human resource dynamics within family businesses, emphasizing the pragmatic implications of integrating non-family managers. Identifying the optimal degree of non-family involvement can help family businesses enhance their performance while maintaining harmony and strategic focus. Future research could explore longitudinal effects, varying industry contexts, and qualitative insights into the decision-making processes behind non-family employment.

References

• Aguinis, H. (2014). Test-score banding in human resource selection: technical, legal, and societal issues. Praeger.
• Glas, M., MirticÌŒ, D., & PsÌŒenicÌŒny, V. (2016). Family business. Transitional impacts and the EU enlargement complexity.
• Grzywacz, J., & Handlowa, S. G. (2016). Sources of financing: the development activities of enterprises in Poland. SGH Publishing House.
• Hisrich, R. D., Peters, M. P., & Shepherd, D. A. (2017). Entrepreneurship. McGraw-Hill Education.
• Karlan, D. S., Morduch, J., & Startz, M. L. (2017). Economics. McGraw-Hill Education.
• Kushell, J., Spinelli, S., Nadaff, G., DeLuca, F., & Bolt, D. D. (2011). Introduction to the franchising case study: Subway Restaurants. Young Entrepreneurs Network.
• Lussier, R. N., & Hendon, J. R. (2016). Human resource management: Functions, applications, & skill development. SAGE Publications.
• Martin, M. L., Heron, S. L., Moreno-Walton, L., & Jones, A. W. (2016). Diversity and Inclusion in Quality Patient Care. Springer International Publishing.
• McLean, G. N., & Yang, B. (2014). Creativity and Human Resource Development: An Integrative Literature Review. Human Resource Development Review, 1-32.
• Parkin, M. (2018). Microeconomics. Pearson.