|Ph.D Student||Michael-Tsabari Nava|
|Subject||"We are like Family" - Introducing the Kin Climate|
(KC) and its Influence on Profitability; Turnover
|Department||Department of Industrial Engineering and Management||Supervisor||Professor Anat Rafaeli|
|Full Thesis text|
This summer the San Antonio Spurs basketball team won their fifth NBA championship, crushing the Miami Heat in the NBA Finals four games to one. Their achievements are attributed to a mixture of professionalism and to “a family-like feeling”. The “feeling in the air” of “we are like a family” in organizations, which was referred to as the reason for The Spurs success, is anecdotally described to characterize the organizational culture in family owned firms. This ‘family-like’ organizational culture is based on different aspects of the 'family' metaphor; however, the direct measure of these characteristics has only been scarcely empirically studied. The findings during the last decade that family firms financially outperform nonfamily firms have added an unexpected counter-intuitive effectiveness advantage to this yet-undefined familial way of organizing. This dissertation aims at closing this gap by suggesting components to the family-like organizational culture and exploring their influence on firm outcomes. I suggest that the ‘familial’ organizational culture can be described by four components: three cultural dimensions of paternalism, collectivism and power distance, and a fourth component of sensitivity to emotions. I term the combination of these components - the Kin Climate (KC), which is suggested as a familialized way of organizing, offering the nonfamily employees a family-like employment setting with collectivistic characteristics. The empirical findings, from a study of 35 family and 12 nonfamily firms in Israel, show that the owning-family positively and significantly influences all proposed Kin Climate (KC) dimensions, and several KC dimensions significantly influence firm outcomes of profitability, turnover and growth. The data show that the degree to which these KC dimensions inhabit an organization influences firm outcomes mostly in a bidirectional and nonlinear way, with a positive as well as a negative influence. For Profitability, better outcomes were found in medium KC levels, for lower Turnover - in the extreme high/low KC ends, and for Growth - for big firms with low KC, and small firms with high KC. The findings also show that the Kin Climate (KC) that I propose partially mediates the relationship between owning-family’s influence on profitability and turnover, and fully mediates the relationship with firm growth. Firm size and CEO tenure were not hypothesized, but found to have significant moderating effects on some KC dimensions. The Kin Climate (KC) is therefore proposed and defined, found to have significant influence on firm outcomes, and portrays a myriad of complex and partly nonlinear relationships.