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Family Management, Family Ownership and Downsizing: Evidence from S&P 500 Firms

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  • Jörn Hendrich Block

Abstract

Little is known about the relationship between family firms and their employees. This paper aims to close this gap. We distinguish between family management and family ownership as two dimensions of family firms and analyze their respective influence on downsizing. Our findings show that family management decreases the likelihood of downsizing, whereas the extent of family ownership decreases the likelihood of downsizing only with regard to deep job cuts (above 6%). We conclude that family managers have a strong long-term perspective, which is in line with both agency and stewardship theory. Yet, the idea that reputation concerns lead family owners to shy away from downsizing is only partially supported.

Suggested Citation

  • Jörn Hendrich Block, 2008. "Family Management, Family Ownership and Downsizing: Evidence from S&P 500 Firms," SFB 649 Discussion Papers SFB649DP2008-023, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  • Handle: RePEc:hum:wpaper:sfb649dp2008-023
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    File URL: http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2008-023.pdf
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    References listed on IDEAS

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    1. Randall Morck & Bernard Yeung, 2003. "Family Control and the Rent-Seeking Society," William Davidson Institute Working Papers Series 585, William Davidson Institute at the University of Michigan.
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    Citations

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    Cited by:

    1. Jörn Hendrich Block, 2008. "Are CEOs in Family Firms Paid Like Bureaucrats? Evidence from Bayesian and Frequentist Analyses," SFB 649 Discussion Papers SFB649DP2008-033, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    2. Ampenberger, Markus & Schmid, Thomas & Achleitner, Ann-Kristin & Kaserer, Christoph, 2009. "Capital structure decisions in family firms: empirical evidence from a bank-based economy," CEFS Working Paper Series 2009-05, Technische Universität München (TUM), Center for Entrepreneurial and Financial Studies (CEFS).
    3. Block, J.H. & Wagner, M., 2010. "Corporate Social Responsibility in Large Family and Founder Firms," ERIM Report Series Research in Management ERS-2010-027-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    4. Andrea Bassanini & Thomas Breda & Eve Caroli & Antoine Rebérioux, 2010. "Working in family firms: less paid but more secure? Evidence from French matched employer-employee data," PSE Working Papers halshs-00564972, HAL.

    More about this item

    Keywords

    Family firms; family management; family ownership; job cuts; downsizing; layoffs;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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