LSE Business Review:
In family-owned businesses, professional CEOs work longer hours than owner-CEOs
14 September 2015
That time difference adds 2.6 percent extra productivity for the professionals, finds an LSE-Columbia-Harvard team. An emerging body of evidence indicates that family management may actually be detrimental for performance. One study estimates a 4 percent profitability loss for Danish firms due to having a family manager rather than a professional manager. Another finds that family firms have worse executive selection because they prefer to hire a less qualified family manager rather than an external professional manager: this accounts for a 6 percent productivity loss for family CEO firms relative to firms owned by dispersed shareholders.
This article was published online by the LSE Business Review blog on September 14, 2015
Link to article here
Related publications
Family business: management effort and firm performance, Oriana Bandiera, Andrea Prat and Raffaella Sadun. Article in CentrePiece Volume 20, Issue 1, Summer 2015
'Managing the family firm: evidence from CEOs at work', Oriana Bandiera, Andrea Prat and Raffaella Sadun, Centre for Economic Performance Discussion Paper No.1250, December 2013
Related links
Raffaella Sadun webpage
Productivity and Innovation Programme webpage