Yiyi Su, Jun Xia, Shaker A. Zahra, Jiayan Ding

Human Resource Management, 62(3): 307-330

Recommend Reason

Prior research results on the family CEO successor–performance relationship have been mixed. This study explores the effect of intrafamily CEO succession on post-succession firm performance under conditions of sustainable HRM practices and corporate philanthropy. It makes three primary contributions. First, it provides a multi-stakeholder framework that connects family leadership succession and firm performance and clarifies sustainable HRM and corporate philanthropy as complementary conditions. Second, it explores sustainable HRM in the family business context, an important but under-researched domain for HR scholars, by considering how sustainable HRM interacts with family leadership and their impacts on firm performance. Third, it advances understanding of the CSR-HRM interface by examining how sustainable HRM exerts an insurance-like effect during difficult times, given that such an effect has been widely discussed in CSR research but not in HR research.

About the Author

Yiyi Su, School of Economics and Management, Tongji University

Jun Xia, Naveen Jindal School of Management, University of Texas at Dallas

Shaker A. Zahra, Carlson School of Management, University of Minnesota

Jiayan Ding, School of Economics and Management, Tongji University

Keywords

corporate philanthropy; firm performance; intrafamily CEO succession; multi-stakeholder perspective; sustainable human resource management

Brief Introduction

This study develops and tests a multi-stakeholder perspective of intrafamily CEO succession by exploring how family CEO successors affect post-succession firm performance under conditions of sustainable human resource management (sustainable HRM) practices toward employees and top managers, as well as corporate philanthropic activities in the broader community. Using a sample of 414 CEO successions in family firms listed on China’s stock exchanges during 2008–2016, we find an insurance-like effect of both sustainable HRM and corporate philanthropy in enhancing firm performance of family CEO successors. The results also show that firms with family CEO successors will outperform those with nonfamily counterparts under conditions of high employee compensation, low top management team (TMT) compensation, and long TMT tenure. Findings suggest that sustainable HRM and corporate philanthropy complement rather than substitute in strengthening family leadership during CEO succession.

Link: https://doi.org/10.1002/hrm.22143