Seminar #04 – September 16, 2020

ABSTRACT – When family businesses grow or have the need to professionalize, there comes a point when even the top management team can no longer consist only of family members, which forces family businesses to expand it. With the help of a qualitative research design in Swiss family businesses, with additional interviews with executive research experts, we investigate the question of how family businesses select external top management team members. The decision making process is divided into three phases and resembles a funnel and ends with the selection of the candidate with the highest fit and the highest level of trustworthiness. In the course of the process, the logic behind the decision making process for a TMT member changes from a rational to an emotional one. In spite of the process-based approach, the family has an influence at different points in the process, controls it and integrates a family effect. This can be a success factor but also a risk factor.