Identity leadership in family businesses: The important role of nonfamily leaders

Abstract

Nonfamily employees’ identification with the family firm is of importance as higher levels of identification are related to organizationally desired outcomes. However, nonfamily employees may display lower levels of identification when they perceive greater distance to the business and to the family or become demotivated by preferential treatment of family members. In this study, factors related to nonfamily employees’ organizational identification were investigated, thereby taking a leader-centered perspective. Drawing upon social identity theory, we assume that nonfamily leaders are more influential regarding nonfamily employees’ identification with the business and the family via strengthening identification with the team. We test our predictions across a two-wave study of 325 nonfamily employees of different family businesses. Interestingly, we find support that nonfamily leaders affect nonfamily employees’ identification with the family business and the owning family even more strongly than family leaders do. This effect, however, only occurs for nonfamily leaders operating within a high stewardship climate. Implications for theory and practice are discussed.