Family managers' propensity towards mergers and acquisitions : the role of performance feedback
Purpose: Drawing on upper echelons theory (UET) and arguments from behavioral theory of the firm, this paper aims to contribute to the debate on family involvement-performance relationship, by considering the mediating role of the propensity towards merger and acquisition (M&A) and the moderating role of performance feedback. Design/methodology/approach: The hypotheses are tested by applying a moderated mediation analysis on a sample of 111 German family firms. First, a mediation model is run to verify the mediation role of the propensity towards M&A; then, to evaluate the magnitude of the mediation at different values of the moderator (performance feedback), conditional indirect effects are tested using normal-theory standard errors and bootstrapping procedure. Findings: The main findings suggest that a higher percentage of family members sitting in TMT is related to better performance and that this effect is mediated by the propensity towards M&A. Furthermore, findings also show that a higher percentage of family managers is positively related to the propensity towards M&A and, in turn, exerts a positive effect of firm performance, especially when performance feedback is negative. Practical implications: The paper suggests to family firms' managers that when performance feedback is negative, a riskier behavior, such as M&A, could represent a way to improve firm performance. Originality/value: The paper provides a full application of UET to the context of family firms, offers the point of view of TMT, instead of that of ownership, to study the propensity towards M&A in family firms and goes beyond the rational view to explain family managers' risk-taking behaviors.
Year of publication: |
2021
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Authors: | Santulli, Rosalia ; Gallucci, Carmen ; Torchia, Mariateresa ; Calabrò, Andrea |
Published in: |
Journal of Small Business and Enterprise Development. - Emerald, ISSN 1462-6004, ZDB-ID 2031784-0. - Vol. 29.2021, 2 (07.10.), p. 293-310
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Publisher: |
Emerald |
Saved in:
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