Main Article Content

Ernesto Poza-Valle
Thunderbird School of Global Management
United States
Vol. 11 No. 1 (2021), Research paper
Copyright How to Cite


A review of the academic research and practitioner best practices literature highlights how little we still know about the role that ownership control plays in the continuity of founder-controlled and family-controlled firms. Founder-controlled firms have been shown to financially outperform other firms. Allowing for more nuanced findings given the heterogeneity of family businesses, a similar advantage has been found in family-controlled firms around the world when their performance is contrasted with that of management-controlled firms. Research points to generational and family participation effects that may contribute to a gradual decline in this advantage over the generations. Still, controlling families of family firms face the prospect of leading a family-controlled firm across generations that continues to derive the financial and noneconomic benefits of such control or to squander that opportunity by not having ownership control be a fundamental consideration in their owners’ strategy when facing a generational transition. Statutory ownership control, psychological ownership and family unity approaches are all considered in an exploration of a future ownership development perspective and approaches that controlling families can take to preserve ownership control and the resulting comparative advantage evidenced in higher financial and noneconomic returns over generations.

Cited by

Article Details


Anderson, R. C., & Reeb, D. M. (2003). Founding-family ownership and firm performance: Evidence from the S&P 500. The Journal of Finance, 58(3), 1301-1328.
Buffett, W. (1996). The owner’s manual.
Credit Suisse Research Institute (2016). Credit Suisse/Bloomberg data and analysis.
Cruz, C., & Jimenez, L. (2017). What distinguishes family firms with high transgenerational potential: Best Latin American practices. Credit Suisse White Paper.
Daugherty, M. (2017). Financial and wealth management in the family business (chapter 14). In Poza, E., & Daugherty, M. (ed.). Family business (5th edition), 296-328. Cengage Publishing.
Easterbrook, F., & Fischell, D. (1982). Corporate control transactions. Yale Law Journal, 91(4), 698-739. (1981-1982). Available in:
Gómez-Mejía, L. R., Haynes, K. T., Núñez-Nickel, M., Jacobson, K. J. L., & Moyano-Fuentes, J. (2007). Socioemotional wealth and business risks in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52(1), 106–137.
Jeong, S., Kim, H., & Kim, H. (2021). Strategic nepotism in family director appointments: evidence from family business groups in South Korea. Academy of Management Journal, in press.
Lin, K. (2015, August 17). The Big Number – Share of IPOs this year with dual-class stock structures. Wall Street Journal. Availabe in:
Madison, K., Kellermanns, F. W., & Munyon, T. (2017). Coexisting agency and stewardship governance in family firms. Family Business Review, 30(4), 347–368.
McVey, H., & Draho, J. (2005). U.S. Family‐run companies–They may be better than you think. Journal of Applied Corporate Finance, 17(4), 134-143.
Poza, E., & Daugherty, M. (2017). Family business (5th edition). Cengage Publishing.
Schulze, W., Lubatkin, M., & Dino, R. (2003). Exploring the agency consequences of ownership dispersion among the directors of private family firms. Academy of Management Journal, 46(2), 179-194.
Schulze, W., Lubatkin, M., Dino, R., & Buchholtz, A. (2001). Agency relationships in family firms: Theory and evidence. Organization Science, 12(2), 99-116.
Suzuki, S. (1970). Zen mind, beginner’s mind: Informal talks on zen meditation and practice. Weatherhill.
Villalonga, B., & Amit, R. (2006). How do family ownership, control and management affect firm value? Journal of Financial Economics, 80(2), 385-417.
Zook, C., & Allen, J. (2016). The founder’s mentality: How to overcome the predictable crises of growth. Harvard Business Review Press.