Family Business Founders Don't Work the Longest Hours
There's a perception that founders of family businesses put everything into running their companies.
So the results of a recent study from Harvard Business School, highlighted on the school's Working Knowledge site, might come as a surprise. The authors found that non-founding CEOs of family-owned businesses put more hours in at work than founders do.
The study focused on more than 350 manufacturing companies in India. The results were later replicated in other countries, included the United States, the U.K., and Brazil. CEOs in the study were split into two groups: those who were related to the family that owned the company (a group that included founding CEOs), and those who weren't (referred to in the study as "professional" CEOs).
The researchers discovered that founding CEOs spent 8 percent fewer hours per week at work than professional CEOs. Other "family" CEOs--those who are related to the family that owns or founded the company--spent more time at the office than founders, but still 6.6 percent less time than professional CEOs.
The time discrepancy makes a difference. The study also found that every 1 percent increase in weekly hours worked by a company's CEO correlated to a 1.04 percent annual increase in the company's productivity.
Raffaella Sadun, one of the researchers, considered some of the reasons for these findings in Working Knowledge.
"Family CEOs are a very interesting group. On the one hand, it stands to reason that they should be super-motivated to work hard because whatever they do for the company adds to the wealth of their whole family," she said. "On the other hand, a CEO's incentive to perform is in large part tied to what happens when he or she does not perform--a risk of getting ousted. But aligning a board to say we're going to start looking for someone else is a lot more complicated when the board is made up of family members who are related to the CEO."