Entrenchment in publicly traded family firms: Evidence from the S&P 500
Document Type
Article
Publication Date
12-30-2017
Publication Title
Long Range Planning
Volume
51
Issue
5
First page number:
736
Last page number:
749
Abstract
Family involvement in corporate governance through ownership, management, and board membership presents a unique dilemma for understanding the strategic impetus and costs of entrenchment decisions. The presence of shared family ties and the family-centered goals of firm principals call to question the applicability of extant agency arguments regarding the nature and antecedents of managerial entrenchment. Exploring this, we develop and test a model of family firm-specific determinants (i.e., family ownership and family's involvement in management and governance) of entrenchment in publicly traded firms by drawing upon principal-principal agency theory. Findings of the empirical analysis of family owned S&P 500 firms suggest family firms are motivated to entrench managers when doing so supports the pursuit of family-centric goals. However, the extent to which entrenchment supports such goals varies at different levels of family ownership. © 2017 Elsevier Ltd.
Keywords
Entrenchment; Family governance; Agency theory; Family firm heterogeneity
Disciplines
Business Administration, Management, and Operations
Language
english
Repository Citation
Randolph, R. V.,
Wang, Z. ".,
Memili, E.
(2017).
Entrenchment in publicly traded family firms: Evidence from the S&P 500.
Long Range Planning, 51(5),
736-749.
http://dx.doi.org/10.1016/j.lrp.2017.12.006