Organizational renewal in family firms

We investigate whether organisational renewal impacts upon the performance of family firms, and identify aspects of “familiness” acting as facilitators or inhibitors of organisational renewal. A survey instrument captured data on relevant family-related characteristics, organisational renewal, and firm performance from CEOs of 140 family firms in Greece. Regression analysis was used to test hypotheses. We found strong evidence that organisational renewal impacts positively upon profit growth of family firms. Where CEOs had a strong growth aspiration for the future, were firm founders, and where succession planning was taking place, renewal was more likely to be enacted. Efforts are focused on creating a business which will thrive in the future, and not curating an organisational heirloom shaped and constrained by the past. Their strong future focus liberates these family firms from possible cross-generational path dependency, allowing the special resources of their family's business to act instead as a springboard for on-going organisational renewal. Conversely, those family firms with a high level of family altruism indicated by extensive kin-employment seemed to be more probably destined for stagnation than stewardship, as they promote (past-focused) historical family sentiment and tradition. The dangers of cross-generational path dependency indeed seem pronounced in such past-focused firms