How Parenting Styles Shape Successors and Create Heterogeneity in Family Firms

Parental Control Theory and the Heterogeneity of Family Firms

Parental Control Theory provides an important perspective for understanding why family businesses can operate very differently, even when they have similar ownership structures, industries or financial resources (Jaskiewicz et al., 2017).

The theory focuses on how parents combine control, expectations and discipline with emotional support, communication and responsiveness when raising their children. These early family experiences can influence how members of the next generation develop confidence, independence, self-control, leadership ability and decision-making skills (Jaskiewicz et al., 2017).

Jaskiewicz et al. (2017) discuss parenting styles through two main dimensions: parental demandingness and parental responsiveness. These dimensions produce three principal parenting approaches: authoritative, authoritarian and permissive parenting.

Authoritative Parenting

Authoritative parents establish clear standards and expectations while also providing emotional support, open communication and respect. They balance demandingness with responsiveness and encourage children to develop independence within appropriate boundaries (Jaskiewicz et al., 2017).

In a family business, this approach may help the next generation become more responsible, confident and capable of making independent decisions. The founder maintains appropriate guidance while gradually allowing successors to develop their own judgment and leadership abilities. Research suggests that authoritative parenting is generally associated with stronger psychological functioning and more positive developmental outcomes in children (Jaskiewicz et al., 2017; Smetana, 2017).

Authoritarian Parenting

Authoritarian parents place strong emphasis on control, obedience and discipline, with less opportunity for open communication or independent decision-making. Parental demandingness is high, while responsiveness is relatively low (Jaskiewicz et al., 2017).

In a family firm, this approach may create successors who are highly compliant but less confident in challenging the founder or making independent decisions. It may also contribute to dependency, limited initiative, intergenerational tension or conflict when the next generation seeks greater authority.

Permissive Parenting

Permissive parents provide warmth and emotional support but may offer limited structure, discipline or accountability. Their responsiveness is relatively high, but their demandingness is low (Jaskiewicz et al., 2017).

In a family enterprise, this may result in next-generation family members who expect to participate in the company but have not been adequately prepared for the responsibilities of ownership or leadership. They may receive the benefits associated with the family business without being held to clear standards of performance and accountability.

Relevance to Family-Firm Heterogeneity

Parental Control Theory is highly relevant to the study of family-firm heterogeneity because family businesses are not shaped only by ownership, governance structures and financial resources. They are also shaped by family relationships, childhood experiences and the way authority is exercised within the family (Jaskiewicz et al., 2017).

Two family firms may have similar assets, ownership structures and business models, but their succession outcomes may be completely different. One family may successfully prepare capable and independent successors, while another may experience dependency, sibling conflict or resistance to leadership transition. Differences in parenting styles may help explain these different outcomes.

Recent family-business research further demonstrates that a predecessor’s parenting style can affect a successor’s psychological functioning and leadership behaviour. These effects may subsequently influence employee behaviour and organizational outcomes after succession (Shanine et al., 2023).

From a family wealth and governance perspective, this theory reminds us that succession planning should begin long before legal documents are prepared. Families must consider how the next generation is educated, mentored, supported and held accountable.

Successful continuity requires a careful balance between guidance and independence. Parents must protect family values and business standards while also giving the next generation enough opportunity to develop confidence, sound judgment and practical leadership experience.

Parental Control Theory therefore provides researchers and family-enterprise advisors with a valuable framework for examining succession readiness, next-generation development, sibling relationships, leadership transition and the long-term continuity of family businesses (Jaskiewicz et al., 2017).

References

Jaskiewicz, P., Combs, J. G., Shanine, K. K., & Kacmar, K. M. (2017). Introducing the family: A review of family science with implications for management research. Academy of Management Annals, 11(1), 309–341. https://doi.org/10.5465/annals.2014.0053

Shanine, K. K., Madison, K., Combs, J. G., & Eddleston, K. A. (2023). Parenting the successor: It starts at home and leaves an enduring impact on the family business. Entrepreneurship Theory and Practice, 47(4), 1093–1124. https://doi.org/10.1177/10422587221088772

Smetana, J. G. (2017). Current research on parenting styles, dimensions, and beliefs. Current Opinion in Psychology, 15, 19–25. https://doi.org/10.1016/j.copsyc.2017.02.012