Conflict, Participative Decision-Making, and Generational Ownership Dispersion: A Multilevel Analysis

This study examines how participative decision-making and generational ownership dispersion affect conflict in a sample of privately held U.S. family firms. Our study utilizes a hierarchical linear model approach to investigate “cross-level” effects between variables from different levels of analysis. Participative decision-making among family members was found to be associated with cognitive and relationship conflict. Furthermore, the relationship between participative decision-making and conflict as individual-level variables was moderated by generational ownership dispersion, a firm-level variable. When ownership was dispersed through multiple generations, participative decision-making was found to be positively related to cognitive and relationship conflict; however, in one- and two-generation ownership firms participative decision-making was found to be negatively related to cognitive and relationship conflict.