Protect and Be Served? - The Revival of Paternalistic Leadership in the Light of Family Businesses

Heidrich Balázs and Chandler Nick and Németh Krisztina (2018) Protect and Be Served? - The Revival of Paternalistic Leadership in the Light of Family Businesses. Logisztika - Informatika - Menedzsment, 3 (1). pp. 5-20. ISSN 2498-9037

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Abstract

Paternalistic leadership as a more humanistic type of autocratic style has long been identified in leadership research. However there is quite a lot of disagreement on the evaluation of such leadership: most Asian studies on the topic identifies it as a desirable type, which is quite the contrary to most Western research results. Research suggests that paternalism could work as an effective leadership style in many non-Western cultures, however in the Western context it is considered manipulative and authoritative (Pellegrini & Scandura, 2006). Chinese, Turkish, Indian, Hungarian and Romanian empirical studies have identified the presence and acceptance of such leadership in organizations in the last decade (Scarlat & Scarlat, 2007, Heidrich & Alt, 2009, Sucala & Kostina, 2010). Paternalism as a leadership attitude is naturally present in FBs, especially in the founding stage of development. This feature provides the solid bases for establishing a strong and proud culture built around the personality and success of the founder. This characteristic however can become a major hindering factor upon succession. Through a review of the literature and the INSIST studies for Eastern Europe this study aims to identify the supportive and limiting factors of both phenomena and using the case studies of the INSIST research project. Paternalism is found to be broken down into authoritarian, benevolent and moral from the literature review and the case studies find paternalism also existing as ‘enlightened paternalism’. After discovering studies claiming that paternalism is a stage in the process of leadership style changing from participative to autocratic (or vice versa), our findings suggest that some family firms are on the path from autocratic towards a more participative leadership style.