Psychological Ownership in Small Family-Owned Businesses: Leadership Style and Nonfamily-Employees’ Work Attitudes and Behaviors

Abstract

Using a sample of 229 nonfamily employees working in 52 small family-owned businesses, we examined the relationships between owner-managers’ leadership style and employees’ psychological ownership of the family business and their job. We also examined whether psychological ownership mediated the link between leadership style and employees’ organizational attitudes and behaviors. Hierarchical linear modeling (HLM) analysis confirmed transformational and transactional leadership as contextual facilitators of psychological ownership for the family business and for the job. Passive (laissez-faire) leadership was negatively related to employees’ ownership feelings for the family business. Psychological ownership of the organization and the job mediated the relationship between leadership style and affective organizational commitment, job satisfaction, and turnover intentions. In addition, feelings of psychological ownership for the family business mediated the relationship between transformational leadership and organizational citizenship behavior (OCB). Implications for research and practice are discussed.