How family CEOs affect employees’ feelings and behaviors: a study on positive emotions

Long Range Planning — 30 March 2022

Written by

Nadine Kammerlander, Jochen Menges, Dennis Herhausen, Petra Kipfelsberger and Heike Bruch

Summary

What we found: Our research shows that companies with family CEOs - when the CEO of a family company is a family member themselves - tend to offer more pleasant work environments that infuse employees with positive emotions. Further, family CEOs setting a positive organizational affective tone by fostering enthusiasm and excitement lowers the voluntary turnover rate at their company.

Why it matters: Family CEOs are sometimes depicted as having possible drawbacks, like being biased when it comes to making business decisions. Our research documents the positive side of having a family CEO and further shows why cultivating a positive work environment matters for organizations.

What next: When a company grows, it is often hard to keep its family-like aspects that family CEOs can provide alive, such as emotional contagion of positive emotions. Managers should be aware of this downside when companies grow and become more formalized, and experiment with ways to maintain the family-like spirit and positive emotional environment.