Management team replacement and family business performance: an empirical test in Southern Italy

Purpose of the paper: This empirical research has the aim of verifying the effects of management team replacement on performance in second-generation family businesses.

Methodology: Our empirical investigation examines a sample of 992 manufacturing family businesses. These firms are located in Southern Italy and they are second generation family firms. The sample was divided into: 1) a main group composed of 496 firms that replaced management teams after family succession; 2) a control group of 496 firms that did not replace management teams after family succession. The performance indicators were compared using: 1) paired samples t-test; 2) Levenes test; 3) independent samples t-test.

Findings: The comparison between the two homogeneous groups points out that there are no significant changes in performance after family succession. Regarding management team replacement, only second-generation family businesses that have changed the management team suffer significant deterioration in performance.

Research limitations: The results only concern enterprises in Southern Italy that operate in the manufacturing sector.

Research and managerial implications: The research underlines the importance of the involvement of management teams and their business decision-making power in retaining old managers in family businesses.

Originality/value of paper: Few empirical studies have investigated the effects of management team replacement after family succession. The results of this research could extend the perspective of the emerging Socioemotional Wealth theory.

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