Growth Goals, Strategies and Compensation Practices of US Family and Non-Family High-Growth Firms

Abstract

How do family firms grow rapidly while maintaining a high concentration of family ownership? In this study, a sample of high-growth firms is divided into three groups based on concentration of family ownership (no family ownership, low family ownership, high family ownership). A comparative analysis of these three groups is performed on the variables previously identified as barriers to growth, namely: growth objectives, growth strategy and incentive compensation. Data analysis revealed no significant differences between the three groups for growth objectives, although the high family ownership group placed more importance on maximizing profits and the low family ownership group placed more importance on maximizing sales. There were no significant differences between the groups on strategy selected to achieve growth, with all three groups achieving the majority of their sales growth from market penetration and market development strategies. Finally, firms with a high concentration of family ownership were significantly more likely to offer profit sharing.

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