Turnover intention in family businesses: The moderating effect of the stewardship mechanism and transformational leadership

Abstract

ABSTRACT Purpose: This study evaluates the effect of moderating the transformational leadership style on the relationship between stewardship mechanisms and the turnover intention of department managers of family businesses. Originality/value: Employee turnover is a growing concern in family businesses, which value maintaining a harmonious organizational environment. Therefore, this study evaluates the importance of stewardship mechanisms and the transformational leadership style in reducing and containing employees’ turnover intentions in the organizational environment. Design/methodology/approach: The study is based on a sample of 114 department managers who work in the environment of Brazilian family businesses. For analysis, linear regression was performed to investigate the relationship between stewardship mechanisms and transformational leadership on turnover intention and the moderating effect of transformational leadership style on the relationship between stewardship mechanisms and turnover intention of department managers. Findings: The results elucidate the confirmation of the three hypotheses of the study, sustaining that when the company uses stewardship mechanisms, it significantly reduces the turnover intention of department managers in family organizations. It is also noteworthy that this reduction is even greater when the organization has leaders with a transformational leadership style, in which the behavior of these leaders towards their employees is guided by the social ties that are constituted by the trust and loyalty of employees in their leader. Additionally, the results state that the transformational leadership style negatively moderates the relationship between stewardship mechanisms and employee turnover intention.