Top management team composition in private family firms: Do organizational factors matter?

Family firms represent the most common form of organization worldwide. As a result, a large amount of research has investigated various topics in the field, however neglecting human resource problematics. To address this gap, the main purpose of this paper is to investigate how private family firms proceed to the appointment of the members of the top management team (TMT). While most studies suggest that family owners are less inclined to appoint nonfamily members to the TMT, recent advancements suggest that this overly simplistic view should be challenged by taking into account various contingencies. Drawing on this perspective and the socioemotional wealth theory, this study examines how specific organizational factors (firm size, performance, innovation, risk-taking, proactiveness and the generation in charge of the company) affect the appointment of non-family members in TMT of private family firms. Based on sample of 197 Belgian private family firms, ordinary least square and probit regressions are used to determine how these factors affect nonfamily involvement in the TMT. Our results indicate that firm size exerts a positive influence on the proportion of nonfamily members on the TMT while a negative relationship is found between firm performance and nonfamily involvement in the TMT. The other factors do not exert any influence on the appointment of nonfamily members on the TMT. This article contributes to the family business and human resource literature by illustrating the conditions under which nonfamily managers become relevant for family firms. Policy-makers could use these results to reflect about potential incentives that could help family firms hire nonfamily managers when needed.