Are we family and are we treated as family? Nonfamily employees' perceptions of justice in the family firm.

The importance of justice perceptions in fostering positive job attitudes and value-creating behaviors in organizations is well established in the literature. Despite this, only a handful of studies have addressed justice in family firms, and none have presented a theoretical model illustrating how nonfamily employees' justice perceptions may be influenced by family involvement in family firms. Here, we suggest that the level of family influence impacts the justice perceptions of nonfamily employees primarily through its effect on the human resource (HR) practices within family firms. Specifically, we propose that low levels of family influence tend to have little impact on the fairness of HR practices, that moderate levels of family influence tend to have positive effects on the fairness of HR practices, and that high levels of family influence tend to have negative effects on the fairness of HR decision processes and outcomes. Accordingly, we present and provide a conceptual support for a model that outlines the proposed relationships among family influence, family firms' HR practices, and the justice perceptions of nonfamily employees.

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Family businesses are perhaps the dominant form of enterprise worldwide as more than two of every three organizations are family owned and/or managed (Gersick, Davis, Hampton, & Lansberg, 1997). Despite this, the field of management studies has paid insufficient attention to these firms' unique theoretical and practical problems (Dyer, 2003). One of the biggest challenges that these businesses face is the effective management of nonfamily employees, which has been recognized as keenly important to family firms (Chua, Chrisman, & Sharma, 2003). Although family members often hold key executive positions in family businesses, many family firms employ nonfamily managers, and most employ a larger number of nonfamily employees than family members (Deloitte & Touche Study, 1999). Thus, attracting qualified nonfamily employees and fostering value-creating attitudes and behaviors among these employees can be major factors in the success or failure of family firms (Chrisman, Chua, & Litz, 2003; Chua et al., 2003).

Securing the commitment and cooperation of nonfamily employees is likely to be more difficult if they do not perceive that decision outcomes, decision processes, and decision makers are fair or just. (2) Although all employees in both family and nonfamily firms may form perceptions about the fairness of the treatment that they experience within their organizations, family involvement and influence in family firms may have unique effects on the fairness of these firms' human resource (HR) practices as they relate to nonfamily employees. Further, although family firms' HR practices affect both family and nonfamily employees, nonfamily employees may often face a particularly complex and uncertain situation since they are part of the business but not of the family system (Mitchell, Morse, & Sharma, 2003). This may ultimately affect perceptions of justice (or injustice) among these workers. In particular, family firms' HR practices related to issues such as staffing, performance appraisal, promotion, compensation, and discipline may vary based on the level of family influence present in family firms. These HR issues can be important influences on the justice perceptions of employees (e.g., Folger & Cropanzano, 1998; Greenberg, 1993; Lemons & Jones, 2001).

When making judgments about a firm's HR practices, nonfamily employees are likely to form at least three distinct justice perceptions. Distributive justice concerns one's perceptions of the fairness of the outcomes of a decision process relative to referent others (Adams, 1965; Homans, 1961). Procedural justice, conversely, is the perceived fairness of the decision-making processes by which outcomes are determined (Thibaut & Walker, 1975). A third type of justice perception, interactional justice, is defined as the quality of interpersonal treatment received as decision processes are carried out (Bies & Moag, 1986). These justice perceptions are likely to impact perceived organizational and supervisory support, one' s sense of organizational identification, and key aspects of in-role and extra-role job performance (Cohen-Charash & Spector, 2001; Colquitt, Conlon, Wesson, Porter, & Ng, 2001).

Family business scholars recognize that fair decision processes are of importance to family firms (Blondel, Carlock, & Heyden, 2000). However, despite the well-established stream of general organizational justice research and the recognition that fair decision processes in family firms are paramount to their success, family business scholars have only recently begun to consider justice within the specific context of family firms (Baldridge & Schulze, 1999; Blondel et al., 2000; Lubatkin, Schulze, Ling, & Dino, 2005). The justice perceptions of nonfamily employees have received little attention, and the effect of family influence is largely unknown. The family influence may affect HR policies and procedures as the family unit's values and goals are integrated with those of the business. Decision makers may be able to communicate effectively about and offer explanations for the way in which HR policies and procedures are implemented. Yet, family--business interactions may also create an environment conducive to bias and favoritism (Lubatkin et al., 2005; Schulze, Lubatkin, & Dino, 2003a), which may lead to perceptions of unfair treatment among nonfamily employees. In this article, we attempt to shed light on this issue by discussing how different levels of family influence in family firms may affect the fairness of HR practices and how these practices influence the justice perceptions of nonfamily employees in family firms. Although we utilize concepts from general theories of organizational justice including fairness theory, fairness heuristics, social exchange, and social identity, our focus is neither on the justice perceptions of employees in nonfamily firms nor on potential differences between the justice perceptions of employees in family versus nonfamily businesses. Instead, we explore the processes influencing the justice perceptions of nonfamily employees within the unique context of family firms.

Before presenting specific propositions linking family influence, HR practices, and nonfamily employees' justice perceptions, we provide an overview of the family firm literature as it relates to family involvement and influence. We then expand this discussion and outline the potential effects of family influence on HR practices and on nonfamily employees' justice perceptions. We then utilize theories of organizational justice to consider the cognitive processes underlying the relationship between HR practices and the justice perceptions of nonfamily employees.

The Family Firm and Family Influence

Although a number of studies have examined differences between family firms and nonfamily firms, the study of family business has been hampered to some degree by a lack of clarity about what exactly constitutes a "family firm" and the extent to which family businesses differ among themselves. Chua, Chrisman, and Sharma (1999, p. 25) sought to reduce the ambiguity in the field by proposing that the family business is:

a business governed and/or managed with the intention to shape and

pursue the vision of the business held by a dominant coalition

controlled by members of the same family or a small number of

families in a manner that is potentially sustainable across

generations of the family or families.

Thus, family firms are characterized by some degree of family ownership, management, and sustainability as well as by the controlling vision of a dominant coalition of family members (Chua et al., 1999). Family firms are not homogeneous, however, and may differ in a variety of ways, including, but not limited to, their ownership concentration, intergenerational involvement, and stage of business development (Gersick et al., 1997). Thus, the unique interactions among the family unit, the business, and individual family members must be taken into account when studying family firms (Aldrich & Cliff, 2003; Cbrisman, Chua, & Sharma, 2005; Habbershon, Williams, & MacMillan, 2003).

Family business scholars have identified two important sets of factors that separate family firms from nonfamily firms and also differentiate among family firms. The first, rooted in the resource-based view of the firm, suggests that the essence of a family firm is its "familiness" (Habbershon & Williams, 1999; Habbershon et al., 2003), which can be captured by focusing on the idiosyncratic bundle of resources and capabilities that result from the interactions among the family and business systems. The second is concerned with the involvement and influence of the family on the enterprise and its members (Astrachan, Klein, & Smyrnios, 2002; Klein, Astrachan, & Smyrnios, 2005), and is comprised of power, experience, and culture. Since we are interested in the formation of justice perceptions by nonfamily employees, a process likely to be affected by the nature and extent of the family influence that characterizes family firms, the power, experience, and culture components of family influence are particularly germane to our discussion. We elaborate on these in the next paragraphs.