Family firm performance through transformational CEO leadership and familiness-related team forces

Abstract

Purpose

The purpose of this study is to test the role of familiness-related team forces induced by the CEO of family firms. In particular, we report on the effects of the transformational leadership style of CEOs on their respective top-management team (TMT) and firm performance when viewed through a familiness lens.

Design/methodology/approach

Survey measures were taken from a snowballed sample of 72 CEOs of German family firms as well as from 245 members of their TMTs. We tested the aggregated firm-level data with objective performance indicators of the firms they led.

Findings

Support was obtained for the three hypothesized team-force mediations and the four-path mediation model. The relationship between CEO’s transformational style and high family-firm performance is found to be serially mediated by TMT cohesion, behavioral integration and efficacy. Together, these three types of collective forces are assumed to be the familiness effect of a family-member CEO with a transformational leadership style.

Originality/value

With our model, we quantitatively tested familiness-type forces vis-à-vis firm performance. Theoretical and practical implications of these findings are discussed.

Citation

Neffe, C., Wilderom, C. and Lattuch, F. (2024), "Family firm performance through transformational CEO leadership and familiness-related team forces", Leadership & Organization Development Journal, Vol. 45 No. 6, pp. 992-1010. https://doi.org/10.1108/LODJ-09-2023-0536