RESEARCH PROPOSAL

Employee Job Satisfaction in Family Business Companies

Petrykov Oleksandr

Employee Job Satisfaction in Family Business Companies

Introduction

The title for this particular research has been developed after reviewing relevant studies published by Ceja and Tàpies (2011), Belenzon and Zarutskie (2012), Poza (2004), Lee (2006) and Siebert at al. (2011). Family businesses have their own distinct manner of operations. They put a greater amount of emphasis on the sustainability of the business and the transfer of power to the next generation. In such a business setup, profitability and expansion demand different HRM practices. Moreover, investments on the training and development of employees are directly linked to the organizational culture in most family owned businesses and this tends to affect management performance. At the same time, family business policies also tend to affect decision-making to a great degree. The decisions made within family-owned business are mainly focused on the next generation rather than current performance.

Literature review

According to Poza (2004), three-fourths of all existing business in the US are family-owned enterprises. In Europe, according to European Committee (2009), family companies account for 60% of all companies operating in Europe. This reflects also in a Fortune 500 survey which concluded that around 30% are family owned or controlled companies (Poza, 2004). There are various definitions of what a family business is. Donkels & Frohlich (1991) suggested that family members should own more than half of equity. On the other hand, Handler (1989) describes a family business as:

“An organisation whose major operating decision and plans for leadership succession are influenced by family members serving in management or on the board”.

The managerial and strategic influence of family members on the company or enterprise is a key element of such companies. Moreover, there is a strong focus on the corporate values, culture and empowerment of the next generation. Ceja & Tàpies (2011) state that that family and non-family firms have different corporate values. Family enterprises are more orientated on people while non-family corporations - towards financial profit. Thus, such orientation undermines a stable investment in the employees training and development and creates positive behavior than in other organizations. Ceja & Tàpies (2011) also discovered that the integrity, respect, and customers' values are the same as for family or non-family owned business. Other words it could be described as the “rules of the game” (Ceja & Tàpies, 2011).

However, extensive studies on the subject revealed that generosity, humility, communication, service and quality are additional values that are common among family-owned firms. It is found that generosity means an important behavioural pattern of the family business and represents a collective view of the world (Ceja & Tàpies, 2011). “The long-term prospective” illustrated by Ceja & Tàpies (2011), combines humility, service and quality. The business needs new talents in order to deliver better products and service and to enliven themselves across the generation.

Belenzon and Zarutskie (2012) made a comparative study on performance and management of family-owned and non-family owned companies. They found that family-owned companies, despite a slow growth, have a higher profit margins, return ...