Are all non-family managers (NFMs) equal? The impact of NFM characteristics and diversity on family firm performance

Although non-family managers (NFMs) can be expected to influence firm performance, this issue is largely under-investigated. In this study, we examine how diversity inside the non-family component of the top management team (non-family team, or NFT) influences family firm performance. More specifically, we investigate the performance effects of three specific sources of NFT diversity (NFT size; NFT tenure diversity; and NFT dominant functional diversity). The analysis of 584 survey responses by top managers representing 97 complete NFTs (and the related TMTs) out of the top 500 family-controlled firms in the Italian furniture industry indicates that (1) NFT dominant functional diversity improves firm performance; (2) a U-shaped relationship exists between NFT tenure diversity and family firm performance; (3) an inverted U-shaped relationship exists between NFT size and family firm performance. Additionally, we show that the relation between non-family manager characteristics and firm performance is moderated by family dominance in the entire TMT, that is, the proportion of family to non-family managers.