The Importance of Leadership, Corporate Climate, Use of Resources, and Strategic Planning in Family Business

Introduction

For researchers, family businesses are subject to more in-depth studies, if we take into account the following: they comprise between 70% and 95% of all companies (Pérez, Gómez, Argente, & López, 2018); more innovative (Kammerlander & van Essen, 2017); complex at decision making (Allen, George, & Davis, 2018), their beginnings (Tsai, Lin, Lin, Lu, & Nugroho, 2018); and the goals set by family members (Basco, 2017) to create a sustainable business. From this perspective we address the most relevant issues for the proper performance of a family business, considering variables such as leadership, work environment, planning and resource management, for the decisions which support the profitability and growth of the business.

Leadership is the ability to guide and influence a group in order to achieve goals (Robbins & Coulter, 2010). It might be one of the issues frequently addressed by many authors, but it is essential as time and environment change, thus does the way to lead. All in accordance to Iberbuden (2017), who states that changes in the environment are permanent and continuous, exposing the need to adapt to new realities, through innovation and creativity, in order to develop attitudes and leadership skills. The influence of leadership could be formal, considering the hierarchy of a person within the company, but could also be natural, when an individual has a positive influence on the people, without being the boss or manager, and driving them to reach their goals. According to Izquierdo, Novillo, and Mocha (2017), the managers or leaders of such microenterprises have, as a primary challenge, to maintain or enhance the level of available human talent in correspondence to the progressive earning of profit, thus demonstrating their performance and even expanding the business they control, turning a small family business into a much bigger one.

As mentioned by Hernández (2011), it must be considered that there are two ways of human thinking, as proposed by Douglas McGregor, the X, and Y theories. Theory X think of workers as working animals, who only respond to the yoke, control, and threat, while theory Y is based on the premise that people want and need work, and they are self-motivated, which makes these behaviors an influence on leadership styles.

Several types of leadership can be followed by the employees of a company, who according to Cardona (2000), are increasingly more dependent on motivations or relationships among them. These leaderships are: (1) Transactional Leadership, referring to a leadership defined by economic influence; the employee interacts with the leader only by intrinsic motivation; (2) Transforming Leadership, defined by work influence; the employee interacts with the leader by intrinsic and extrinsic motivation; (3) Transcendent Leadership, defined by contribution influence; here the employee interacts with the leader by intrinsic, extrinsic and transcendent motivation.

As stated by the same author, it is important to highlight that in a relational leadership, the defining element for the influence is the type of motivation received by the employee; the leader's behavior remains a critical element in the relationship, as it can affect motivation. Esguerra (2017) also coincides, he states that relational leadership is a framework for identifying the factors that make up these inter-relations, such as assets, resources and complementary skills.

According to Pedraja and Rodriguez (2004), the types of leadership are: (1) participatory leadership, where the leader considers the opinion of his subordinates; (2) collaborative leadership, where the leader helps his team with the commissioned works; these two styles have a positive influence on the effectiveness of the organizations; (3) instrumental leadership, where the leader lectures his subordinates on how to carry out the work, he also decides how things should be done, which may exert a negative influence on the staff.