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'The employees are all equal... but some are more equals than others'. Altruism, opportunism and discrimination in family SMEs

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  • Ferrari, Filippo

Abstract

This article provides empirical evidence to support the Agency Theory as applied to small and medium-sized family firms. The research, conducted on a sample of SMEs (N = 88), has investigated the main elements of the Agency Theory ( type of contract, agent autonomy, mechanisms of resource distribution, the match between job assignment and worker skills, the overall level of perceived organizational justice), using a qualitative method. The literature suggests that altruism of the Principal as a parent and widespread opportunistic behavior by the Agent are confirmed phenomena typical of family SMEs. In addition, the research highlights the implications in terms of agency costs and perceived organizational justice on the part of employees who are not members of the family

Suggested Citation

  • Ferrari, Filippo, 2013. "'The employees are all equal... but some are more equals than others'. Altruism, opportunism and discrimination in family SMEs," MPRA Paper 52391, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:52391
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    File URL: https://mpra.ub.uni-muenchen.de/52391/1/MPRA_paper_52391.pdf
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    References listed on IDEAS

    as
    1. 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.
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    3. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    4. Sieger, Philipp & Bernhard, Fabian & Frey, Urs, 2011. "Affective commitment and job satisfaction among non-family employees: Investigating the roles of justice perceptions and psychological ownership," Journal of Family Business Strategy, Elsevier, vol. 2(2), pages 78-89, June.
    5. Mitchell, Ronald K. & Morse, Eric A. & Sharma, Pramodita, 2003. "The transacting cognitions of nonfamily employees in the family businesses setting," Journal of Business Venturing, Elsevier, vol. 18(4), pages 533-551, July.
    6. Ross, Stephen A, 1973. "The Economic Theory of Agency: The Principal's Problem," American Economic Review, American Economic Association, vol. 63(2), pages 134-139, May.
    7. Pieper, Torsten M., 2010. "Non solus: Toward a psychology of family business," Journal of Family Business Strategy, Elsevier, vol. 1(1), pages 26-39, March.
    8. Morris, Michael H. & Williams, Roy O. & Allen, Jeffrey A. & Avila, Ramon A., 1997. "Correlates of success in family business transitions," Journal of Business Venturing, Elsevier, vol. 12(5), pages 385-401, September.
    9. Isabelle Huault & V. Perret & S. Charreire-Petit, 2007. "Management," Post-Print halshs-00337676, HAL.
    10. Chrisman, James J. & Chua, Jess H. & Kellermanns, Franz W. & Chang, Erick P.C., 2007. "Are family managers agents or stewards? An exploratory study in privately held family firms," Journal of Business Research, Elsevier, vol. 60(10), pages 1030-1038, October.
    11. Randoy, Trond & Goel, Sanjay, 2003. "Ownership structure, founder leadership, and performance in Norwegian SMEs: implications for financing entrepreneurial opportunities," Journal of Business Venturing, Elsevier, vol. 18(5), pages 619-637, September.
    12. Bergstrom, Theodore C, 1989. "A Fresh Look at the Rotten Kid Theorem--and Other Household Mysteries," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1138-1159, October.
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    More about this item

    Keywords

    Family Business; Agency Theory; Organizational justice; Opportunistic Behavior.;

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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