The impact of family business professionalization on financial performance: a multidimensional approach
Journal of Small Business and Enterprise Development
ISSN: 1462-6004
Article publication date: 8 February 2022
Issue publication date: 18 October 2022
Abstract
Purpose
This study aims to broaden the multidimensional conceptualization of family business professionalization, and to investigate how professionalization influences the financial performance of family firms, in the context of private family firms.
Design/methodology/approach
Taking a quantitative research approach, the study empirically examines the effect of professionalization on family firm performance, using a sample of 111 privately held Turkish family firms. The hypotheses were tested using regression analysis and the independent samples t-test.
Findings
The results indicate that the professionalization of family businesses has a positive effect on their financial performance, and the professionalization of employees is the prominent dimension of professionalization in this effect.
Research limitations/implications
This study advances the understanding of how professionalization influences family firm performance by providing additional empirical evidence regarding the positive influence of multifaceted family business professionalization on financial performance.
Practical implications
The professionalization framework depicted in this study helps owners, managers, or consultants of family businesses assess the professionalization level of their firm and understand the performance effects of each of the family business professionalization dimensions on financial performance. It can also serve as a roadmap for family firms to professionalize and achieve better performance.
Originality/value
Unlike previous studies, this study incorporates employees, organizational culture and work environment, often neglected in the family business literature, into the multidimensional family business professionalization construct, thus extending previous research. The study contributes to a deeper understanding of the relationship between family businesses professionalization and firm performance.
Keywords
Acknowledgements
This study was adapted from the doctoral dissertation titled “The Effect of Family Business Professionalization on Their Financial Performance” completed by Gülçin Polat in Anadolu University, Institute of Social Sciences in 2018 under the supervision of Prof. Dr. Serap Benligiray.
The authors are grateful to Dr. Julie Dekker for sharing the survey instrument she developed during her doctoral thesis to measure professionalization variables.
Citation
Polat, G. and Benligiray, S. (2022), "The impact of family business professionalization on financial performance: a multidimensional approach", Journal of Small Business and Enterprise Development, Vol. 29 No. 7, pp. 1149-1175. https://doi.org/10.1108/JSBED-11-2021-0437
Publisher
:Emerald Publishing Limited
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