ABSTRACT. We examine whether a controlling family’s influence in their family business relates to the business’s human resources management practices and how the ethical perspectives of those in control of the business affects this relationship. We find family influence is positively related to hiring, promotion, and compensation practices that favor family members over nonfamily members. We also find pro-family compensation practices are negatively related to family business owners’ assessment of their business’s ethical stringency. We discuss the potential consequences of family business owners who strongly influence their businesses and knowingly create inequitable compensation practices that favor family employees. pp. 21–43

Keywords: family business; human resource management; ethics
JEL codes: L22; M12; M14