In order to distinguish family-controlled and non-family-controlled firms, I apply the

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In order to distinguish family-controlled and non-family-controlled firms, I apply the family-controlled business criteria proposed by The Family Business Magazine: a single family controls the company’s ownership, the controlling family members are active in the top management, and the family has been involved in the company for at least two generations. Family businesses constitute a highly important component of the US business community. An estimated 80 percent of the total 15 million businesses within the American economy are family businesses. In the US, 50 percent to 60 percent of the total Gross National Product are provided by family-controlled firms. The other 40 percent to 50 percent is supplied by non-family-controlled firms.…show more content…
For instance, by Robert N Lussier’s study “Family business management activities, styles and characteristics: a correlational study”, in family-controlled firms, non-family members within top management is negatively correlated with women family members working in the firm and positively correlated with sophisticated financial management and management style. Decision-making authority is positively correlated with conflict and disagreement about management decisions, succession planning, use of outside consultants, and strategic planning. Succession planning is positively correlated with going public, use of outside consultants, strategic planning, and sophisticated financial management; and it is negatively correlated with capital structure. Going public is positively correlated with strategic planning, use of outside consultants, and professional services are positively correlated with strategic planning.

The Robert’s study also indicated that hiring experienced non-family managers can enhance the management team’s activities and styles. However, since those non-family managers often do not make greater use of outside help, do not spend more time in strategic planning, and are less likely to develop in comparison to family-member managers, they will not lead to greater use of professional management practices, more professional management styles, activities and characteristics. Therefore, on the

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