THE INFLUENCE OF FAMILY INVOLVEMENT ON SMES EMPLOYEES’ DOWNSIZING DECISIONS

Family firms are likely to align themselves with relevant stakeholders’ values which may include involvement in the local communities, a long term strategic focus based on identity image and reputation and human resource management. Different theoretical and empirical evidences seem to suggest that businesses that are family owned or controlled have a more caring approach towards their employees compared to the other firms. In order to verify the intrinsic or instrumental character of family firms’ social performance related to employees, the downsizing phenomenon was considered. Downsizing can be defined as process of personnel reduction in an organization aimed at improving the company’s competitive position. Based on the assumption that organizations with a tradition of placing greater value on employees’ needs and interests than on short-term perspective should avoid downsizing, the research tries to investigate the relationship between family firms, the extent of downsizing and the mediaton effect of the firm’s economic performance. The results show that family firms can vary their downsizing decisions if different family grade of involvement are considered: firms with high familiness make more “conservative” decisions on their workforce not only in a context of downsizing but also in a context of growth. Probably the resilience of these firms in cutting jobs can act at the same way even in the situation in which the firm could hire.