An Empirical Examination of Ownership Structure in Family and Professionally Managed Firms

The literature applying agency theory to management has focused on the performance advantages to be gained when ownership and control of the firm are aligned. This article investigates that premise by comparing family-owned and -managed and professionally managed firms. The article presents the results of a field survey that examined the extent to which family-owned and -managed firms differ across structural, process, and performance dimensions from their professionally managed counterparts. Significant differences exist between these two groups on both structural and process dimensions, and there is evidence that family-owned and -managed firms exhibit performance advantages as a result of the unification of ownership and control.