The Professionalization of Family Firms: the Role of Agency Cost Control Mechanisms

The paper focuses on the professionalization of family-firms. The study analyses the role of family and management systems in family business, particularly with regard to the relationship between professionalization and economic performance of family firms. The study analyses the features, the drivers and the effect of professionalization of family firms. All the hypotheses have been tested on a sample of 151 small and medium-sized family businesses, extracted from 166 questionnaires returned from the 1,122 mailed to an initial sample of 7,964 manufacturing SMEs, using a structural modelling approach. The main results point out that the involvement of family members in the company management contributes to performance. Instead, the impact of agency cost control mechanisms, such as strategic planning or boards of directors, on the performance of family firms is very complex to analyse.