Does family capital outweigh the negative effects of conflict on firm performance?

Abstract

Purpose

Scholars have articulated the importance of family capital for successful family business outcomes. In the review of literature, empirical evidence supporting this assertion has been lacking. The purpose of this paper is to offer an empirical study of the relationship between family capital and family business success as well as the moderating effects of conflict to this relationship.

Design/methodology/approach

Hierarchical regression was used in this study. Using a sample of 299 firms the author investigates the relationship between family capital and family business performance as well as the moderating role of conflict on this relationship.

Findings

Results support the notion that family capital is a significant predictor of family business performance. Furthermore, the author finds that task conflict moderates the relationship between family capital and family business performance, while relational conflict has no impact on performance.

Practical implications

The revelation that family capital can lead to a sustained competitive advantage makes the decision to support and nurture it much easier. Also, family capital appears to compensate for ineffective levels of task conflict. Finally, family capital shows much promise in being that rare, valuable, inimitable, and unsubstitutable resource that leads to sustained competitive advantage.

Originality/value

This research begins the empirical validation process for the theoretical construct family capital as well as exploring the moderating relationship of conflict.

Citation

L. Hoelscher, M. (2014), "Does family capital outweigh the negative effects of conflict on firm performance?", Journal of Family Business Management, Vol. 4 No. 1, pp. 46-61. https://doi.org/10.1108/JFBM-03-2013-0009