Professor Kimberly Eddleston studies family business. Photo by Craig Bailey
(糖心视频Org.com) -- Kimberly Eddleston wants to know how the 鈥渇amily鈥� in family-run businesses either serves to constrict or promote a firm鈥檚 success.
鈥淎re they suffering from 鈥楾he Fredo Effect,鈥欌�攎eaning, are they employing someone in the family business, like the famous character in 鈥楾he Godfather,鈥� who could never get a job elsewhere?鈥� asks the Northeastern associate professor of entrepreneurship and innovation. 鈥淥r are they practicing good stewardship and really moving the business forward?鈥�
No stranger to the ins and outs of family-run businesses鈥擡ddleston鈥檚 father owned a law firm, and her grandfather owned a hotel鈥攖he professor surveyed entrepreneurs at smaller-scale businesses to reveal aspects of family-business dynamics, and glean insights into the ways in which a family can help or hinder its own company鈥檚 success.
Eddleston recently concluded her data collection, discovering upwards of 20 percent, possibly 30 percent of companies admit to employing a nonproductive family member.
In many cases, CEOs acknowledged that they are employing a family member, a 鈥淔redo,鈥� as she describes them, who鈥檚 more of a hindrance than a help to the operation.
鈥淭he Fredo Effect is about deviance in the family firm, about nepotism, or children given a place in the firm because of their last name, not their abilities,鈥� Eddleston says.
On the flip side, a business can prosper under the direction and stewardship of a family when family members volunteer their own time or special skills so that the enterprise may prosper, she says.
鈥淎n example of this might be found in a family-owned restaurant, where you might see the kids working, and maybe the wife does the bookkeeping,鈥� Eddleston says.
鈥淚n down economic times,鈥� she adds, 鈥�family members may say they don鈥檛 need to be paid as a way of preserving human capital.鈥�
Eddleston conducted her research via surveys of CEOs over the course of many months.
Eddleston has published numerous articles on the role of the family in business. They include, 鈥淒estructive and productive family relationships: A stewardship theory perspective鈥� in the Journal of Business Venturing, 2007; 鈥淭he prequel to family firm culture and stewardship: The leadership perspective of the founder,鈥� in Entrepreneurship Theory and Practice, 2008. In addition, 鈥淭he impact of family versus career role salience on the performance of family and non-family firms鈥� is slated to appear soon in Family Business Review.
Provided by Northeastern University ( : )
