Transformational Family Leaders in Multi-Unit Complex Family Firms: A Multilevel Analysis

Abstract

Transformational leadership is recognized for bringing family members together; however, its role in multi-unit complex family firms that rely on nonfamily managers is poorly theorized. We find that transformational family chief executive officers (CEOs) positively affect the performance of business units run by nonfamily managers, suggesting that transformational family CEOs significantly influence nonfamily managers’ behavior. But the efficacy of that influence matters. Political skill enhances the transformational family CEO’s impact on business unit entrepreneurial orientation and financial performance. Business unit entrepreneurial orientation also mediates the relationship between the transformational family CEO and business unit financial performance, particularly when CEO’s political skill is high.