Abstract

Regarding the debate on which sort of management - professional or family administration - would more effectively run businesses, this paper discusses the advantages and shortcomings of family and professional management from a theoretical and a practitioner’s viewpoint. The study aims at contributing to our understanding about the superiority that either type of management might have delivering long-term performance and value creation to shareholders. Six investors from top value investment funds were interviewed regarding the management of seven fashion retail Brazilian companies. Data analysis revealed that investors do not prefer either type of management - family or professional - when they make investments. Instead, they do look for specific characteristics and patterns of behavior in a CEO, which resemble Selznick’s (1957) definition of an institutional leader. Finally, the paper suggests a new path of research for scholars (relating old institutionalism and professionalism) and practical guidelines for each type of management (family or professional), offering, therefore, an academic as well as a practical contribution.

Keywords:
Family firms; Family business; Professional management; Professionalism; Value-investors.