The relationship of family influence, top management team's behavioral integration, and firm performance in German family businesses

The problem. Integrating family business theory and upper echelon theory, this study explored the argument that high levels of family influence in a firm lead to high levels of behavioral integration of the top management team (TMT), which in turn can lead to superior performance. In order to test this, the study first examined the relationships between family influence, as measured by the F-PEC scale, and TMTs behavioral integration; it investigated the direct relationship of family influence and performance. Second, the study examined the moderating role of TMTs behavioral integration on the family influence/performance relationship was analyzed. Third, the study examined TMTs behavioral integration and its direct effect on performance. Fourth, the study investigated how family influence and TMTs behavioral integration combined affected the level of performance. Performance was measured in two ways: financial performance and specific family-oriented performance goals.; Method. Data were collected from German small- and medium-sized family businesses through a mailed survey. The Chief Executive Officer and one member of the TMT were chosen as respondents. Correlation analysis tested the relationships among the variables, in addition to Pearson's R , standard deviation, and arithmetic mean.; Results. The findings showed significant relationships between family culture and TMTs behavioral integration, family culture and performance, and TMTs behavioral integration and performance. The findings showed that family power and TMTs behavioral integration together had a significant relationship to performance and to family culture and TMTs behavioral integration. Family influence through power had a moderate significant relationship to family performance. Contrary to prediction, experience alone had a significant positive relationship to the financial performance of the firm. The same was true when experience was combined with a behaviorally integrated TMT. Additional findings indicated that family ownership had a significant positive relationship to financial performance and that management participation by the family had a significant positive relationship to family performance but no significant relationship to financial performance of the firm.