Working Paper: NBER ID: w19395
Authors: William Mullins; Antoinette Schoar
Abstract: Using a survey of 800 CEOs in 22 emerging economies we show that CEOs' management styles and philosophy vary with the control rights and involvement of the owning family and founder: CEOs of firms with greater family involvement have more hierarchical management, and feel more accountable to stakeholders such as employees and banks than they do to shareholders. They also see their role as maintaining the status quo rather than bringing about change. In contrast, professional CEOs of non-family firms display a more textbook approach of shareholder-value-maximization. Finally, we find a continuum of leadership arrangements in how intensively family members are involved in management.
Keywords: CEO; Management Philosophy; Family Firms; Nonfamily Firms
JEL Codes: G3; G32; J62; M5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| family involvement (J12) | management philosophy (M54) |
| founder CEOs (M13) | hierarchical management style (M54) |
| founder CEOs (M13) | accountability to banks (G28) |
| founder CEOs (M13) | stable employment (J63) |
| founder CEOs (M13) | dividends (G35) |
| professional CEOs (M12) | shareholder-value-maximizing approach (L21) |
| related CEOs (M12) | governance style (G38) |
| related CEOs (M12) | control (E64) |
| family control (G34) | ability to implement change (O30) |
| CEO type (M12) | firm performance (L25) |