The Impact of Customer Orientation and Family Decision-Making Style on Family Business Performance

Abstract

The purpose of this study was to investigate the relationship of certain characteristics of family business decision-making processes (customer orientation and open and negotiating family decision-making styles) to business and family goal achievement as mediated by emotions (family supportiveness). We undertook this study to better understand why certain family businesses make consistently better decisions than others, leading them to earn more money and have family members who are happier in their home lives. Decision theory undergirded the study development. The sample consisted of 277 family business owners, and the data are from the National Family Business Panel data set. Our results showed that if the business owners focused on customer satisfaction and product quality when making decisions, they tended to make more money and tended to be happier at home. If families made business decisions in open and negotiating ways, their members were happier about their decisions because they felt supported by the other family members. Furthermore, family members who felt good about the support they got from their family members in their business decision-making were also happier in their home lives in general.