Comparison of family and non-family business: Financial logic and personal preferences
Gallo, Miguel A.
This paper documents the research carried out by the Chair of Family Business at IESE using a sample of 305 companies, consisting of 204 non-family businesses (NFBs) and 101 family businesses (FBs). The fact that the FBs in the sample were among the top FBs in Spain and that their financial directors had similar characteristics to the financial directors of the NFBs leads us to believe that the peculiarities of the «financial logic» of FBs brought to light in our study are due not to any lack of knowledge or technical and financial skills on the part of the companies' managers. Rather, they are due to the managers' personal preferences, and to the preferences of other family members who hold power in the firm. The major results indicate that aversion to risk and fear of losing control of the company lead many family businesses to seriously limit their capacity for growth by not encouraging the adoption of widely accepted financial management policies.
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