In these hypothesis they have employed both qualitative

In examining the
relationship between contractual governance, relational governance on family firm
financial performance, scholars Boateng, Wen, & Brew (2015) have investigated
a study from a survey of 2432 management and non-management employees of
family businesses across China and Ghana. The study was confirming four main hypotheses,
whether the level of contractual complexity has or has no effect on individual
and ultimately family firm financial performance as well the level of
relational governance does or does not influence individual and family firm financial
performance. In order to find out the reliability of these hypothesis they have
employed both qualitative and quantitative methods in sampling. Hence, the
study aimed at finding the effect of relational and contractual governance on a
family firm’s financial, they have permitted the use of considering financial performance
as the dependent variable, where they used returns on asset (ROA) measurement
to analyze the family firm’s overall performance. Instead, study’s objectives permitted
the use of corporate governance or contractual and relational governance where
relational governance viewed as a composite factor with three fundamental norms
namely, open communication and sharing information, trust and cooperation. In
order to examine how all these variables are related and whether the
relationship is same for all family businesses and industries investigators
have adopted some control variables that is firm size, type of industry, and
the age of the family business. In examining the relationship between contractual governance, relational
governance and performance, a positive relation was resulted as well open communication
sharing of information, trust represented positive links with the performance.
Age of business firm size were also positively correlated however none of the
control variables had any significant relationship with any of the other
measured variables. Under contractual complexity, they resulted a negative
linear relationship between cooperation among family member employees on individual
firm performance. Further, there was a significant positive relationship
between open communication and ROA as well as between trust and ROA. According
to Chinese non family member employees’ responses, all the analyzes under cooperation,
open communication information sharing and trust showed a positive relationship
with ROA or the performance based on the Chinese management responses,
dimensions of relational governance which is trust and information share
represent a positive relationship with ROA while cooperation represent a negative
connection with ROA. When it comes to the situation of the Ghanaian family firms,
according to Ghanaian family member employees’ responses, trust and information
sharing, cooperation reflects a positive relationship with the performance, on
the other hand under Ghanaian management responses all the dimension of
relational governance showed a positive links with the performance.


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