Study On Structural Power Equality Of Top Management Team And The Performance Of Family Firms

Family enterprises occupies a pivotal position in China's national economy,during the thirty years of economic development since the reform and opening up,family force provides the main finance capital,human capital and social capital for the development of private economy.With the development of the private economy,the family business has gradually become a mainstream form of corporate governance.Compared to the western countries of the family business,the life of family enterprises are short in our country,how to promote family evergreen has become the focus to which the managers of each family enterprises and scholars of family business management in the field pay attention.With the development of family business,these enterprises have been a growing number of employees and a large number of professional managers engaged in specialized production and business activities,family members in the center of owners and other non-family members are two interest groups with different objectives and motivations.Early most family business researchers argue that family members are on behalf of the interests of the enterprise,and family intention,family control,family management decide the trend of the enterprise,which tends to ignore the non-family members,especially the non-family executives in senior management team.From the perspective of Upper Echelons Theory,the heterogeneity of non-family executives can influence the organization of family business.In the process of interacting with the family executives,the two conflicts of interest groups with different goals and behavior motivation have a significant impact on the performance of the enterprise.Power grants the executive the functions of decision-making,incentive and control management,then how to allocate power between the two groups with different target preferences is a question which is worth considering.Biased distribution of power is detrimental to the value of the business,because the family's non-economic goals lead to the family to pursue socioemotional wealth,the fact that family power is too much is not conducive to the acquisition of social resources.The economic goals of non-family driven family executives to seek personal interests(compensation,position),the power of rent-seeking of professional managers,the control of their own remuneration and other acts are not conducive to the growth of shareholders' interests.Therefore,it is of great theoretical and practical value to study the influence of the distribution of power between the family executive and the non-family executives on the enterprise performance.This paper is based on management power theory,theory of social emotional wealth,participation theory to study the effect of structural power equality between family and non-family TMT members on the performance of family firms drawing from the structural power Finkelstein(1992)proposed.Using the simple data of small and medium-sized listed family companies in China during 2013-2015,this study tries to answer the following questions through linear regression:whether or not the distribution of structural power has an impact on the performance of the firm in the family business?If the more balanced the distribution,the better the performance of the family enterprise?Whether or not the proportion of independent directors and the environmental dynamism moderate this relationship?This is a useful supplement to the current research gaps and will provide useful guidance to the arrangement of the governance structure of the family business and the distribution of the power in TMT team,and will guide the owner of family enterprises to encourage professional executives to actively participate in the strategic decision.Currently,the study of the performance of family firms mainly focus on family internal power.Some scholars study the relationship between the power of managers and the performance of family business,and the relationship between the power of CEO and the performance of the family business.Few studies have been conducted to study the effects of power allocation on the performance of family firms from the perspective of the family and non-family TMT members in two aspects.Compared with the existing research,the innovation of this article may lie in the following aspects:(1)this paper takes the family business as the research background,from the perspective of executive power,and discusses the problem of the distribution of the power of TMT members of family business,which is a useful supplement to the research on the governance of the family business;(2)generally,the study on the relationship between the power of executives and the performance of family firms mainly focuses on the Principal-agency theory or altruism,but this paper integrates the structural power theory,socioemotional wealth theory and management by participation,enriching the theoretical studies;(3)This paper not only theoretically enriched the extended use of upper echelons theory,managerial power theory in the performance of family enterprises,in order to provide a new perspective for family practice in corporate governance,but also it provides beneficial enlightenment for the practice in power distribution of upper echelons in family enterprise.