An Exploratory Comparison of the Behavioral Dynamics of Top Management Teams in Family and Nonfamily New Ventures : Cohesion, Conflict, Potency, and Consensus

This exploratory study investigates the behavioraldifferences of the top management teams (TMTs) in startups characterized byvaryinglevels of "familiness" (i.e.parental, familial, andnonfamily firms).The familiness of TMTs is hypothesized to yield moreeffective critical behavior dynamics, including cohesion, conflict, potency,and shared strategic consensus.Several theories regarding the functioningof the TMT are discussed.The levels of familiness are also described,along with generational effects and family dynamics.Several hypothesesare presented as based on cohesion, conflict, potency, and consensus. Data on high-growth firms listed in the Inc. 500 in 1994, 1996, and1999 are used to test the hypotheses. The findings of this research indicatethat parental TMTs possess more effective behavioral dynamics than nonfamilyTMTs and that they outperform familial TMTs.Nonfamilial TMTs have moreidea conflict, while familial teams are able to successfully manage their ideaconflict.Overall, nonfamily TMTs manage their behavioral dynamics betterthan familial teams and have greater potency, cohesion, shared strategicconsensus, and less relationship conflict. (AKP)