Professionalization of Family Firms: Striking a Balance Between Personal and Non-Personal Factors

Abstract

The amount of research on family businesses’ analysis has increased significantly in recent years, thus showing the high importance of the topic. In most countries, family businesses occupy a prominent place in contributing to the economy with the added value they produce. However, less attention has been paid to the professionalization of family businesses and the exploration and presentation of the related literature. The professionalization of family business is a significant research concern in the entrepreneurship and governance literature. In the context of family businesses, professionalization initially meant nothing more than hiring an outside, non-family manager. For today, the content of professionalization has expanded, and a multidimensional model has evolved: a broader, deeper understanding has evolved, which involves other vital aspects such as developing formal control and human resource systems, decentralization of authority, formal strategic planning, or top-level activeness. This study aims to present the essential international literature on professionalization and provide a comprehensive overview of the studies published. The literature review mainly summarizes the results of the last twenty years and closely related articles. The paper follows the next logic; in the first part, the definition of professionalization is introduced along with its benefits and challenges. Then, based on the research methodology presented, the related empirical and theoretical studies are examined. In the end, the review summarizes the key findings in a table.