Mapping leadership patterns and management control practices in family firms: evidence from a multi-level latent class approach

Abstract

Purpose This study aims to investigate how leadership patterns in family firms relate to management control practices, addressing the limited empirical evidence on how observable top-management behaviours shape the design and use of control systems in family businesses.

Design/methodology/approach Using data from the Portuguese Management Practices Survey, the study focuses on 1,505 family firms and operationalizes leadership through nine observable characteristics of the top manager, such as being proactive, taking responsibility and leading by example. A multi-level latent class model is employed to identify firm-level leadership profiles while accounting for the nesting of firms within industry sectors and to examine their association with four dimensions of management control: frequency of key performance indicator (KPI) collection and assessment, availability of information for decision-making and sources of managerial learning.

Findings Four leadership patterns emerge: example-led decisive, proactive responsibility-driven, responsibility-example oriented and low-participative decision-makers. These leadership patterns are systematically associated with different control practices, particularly in terms of how frequently KPIs are collected and reviewed, how much information is available to support decisions and whether learning about management practices primarily occurs through internal or external sources. The results indicate that leadership heterogeneity within family firms is linked to distinct configurations of management control rather than a uniform “family-firm” control model.

Research limitations/implications The cross-sectional, single-country design limits causal inference and generalizability. Future research should examine performance and succession outcomes associated with these leadership–control configurations in other institutional contexts.

Originality/value The study offers an empirically grounded, exploratory typology of leadership patterns in family firms, based on observable managerial characteristics, and links these patterns to specific management control practices while explicitly incorporating sector-level context through a multi-level latent class approach.