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10.5465/AMBPP.2020.233
A TRICKLE-DOWN MODEL OF ABUSIVE SUPERVISION AND FIRM
PERFORMANCE IN FAMILY AND NON-FAMILY FIRMS
KAI C. BORMANN
Bielefeld University
Universitätsstr. 25, 33615 Bielefeld, Germany
E-Mail: kai.bormann@uni-bielefeld.de
CHRISTINA HOON
Heinrich-Heine-University Düsseldorf
MICHAEL GRAFFIUS
Berlin School of Economics and Law
CHRISTOPHER HANSEN
Trier University
INTRODUCTION
Abusive supervision(AS) is defined as the “display of hostile verbal and nonverbal
behavior, excluding physical contact” (Tepper, 2000: 178). One of the reasons why it is such an
insidious threat is that AS, modelled by higher-level leaders, trickles-down to lower-level leaders
and followers by setting an informal behavioral standard throughout the organization (Mawritz,
Mayer, Hoobler, Wayne, & Marinova, 2012). In a similar way, family firm research has brought
academic attention to the detrimental implications that are associated with interpersonal
destructiveness and hostility modelled by higher-level decision makers, most notably (but not
exclusively) by members of the owning families. Family disputes, relationship conflicts, or
hazardous agentic behaviors at the top of family firms and below have all been suggested to have
undesired outcomes for the organization (De Massis & Foss, 2018; Shepherd, 2016).
While family firm research traditionally operates primarily at the organization level,
insights regarding the destructiveness of AS are overly limited to targets as individuals (Mackey,
Frieder, Brees, & Martinko, 2017; Martinko, Harvey, Brees, & Mackey, 2013). However,
bringing the macro-level field of family firm research and the micro-level field of AS together
would be an important step for both realms. That is because on the one hand, several family firm
scholars have called for greater attention to be spent on the psychological microfoundations that
underlie social phenomena (De Massis & Foss, 2018; Shepherd, 2016). On the other hand, there
is so far a dearth of evidence showing the organizational implications stemming from leader
abuse (Tepper, Simon, & Park, 2017). Bringing both fields together is where the present study is
positioned.
Social learning theory (SLT, Bandura, 1977) predicts managers’ AS to trickle-down to
supervisors’ AS (Liu, Liao, & Loi, 2012; Mawritz et al., 2012). We extend this established
perspective by suggesting that this effect should be weaker in family firms. Theory posits that the
likelihood of mimicking behavior depends on an actor’s retention of modeled behavior as well as
his or her motivation to reproduce such. We integrate theories of stewardship and threat
responses to argue that due to family firms’ higher levels of stewardship and increased fear of
competitive threats, supervisors in family firms should be less motivated to emulate AS as well
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as be less attentive to their own manager’s AS. At the organizational level, we suggest manager
AS to impair financial performance through a multi-stage process: It increases supervisor AS and
through this cascading effect also supervisors’ employees’ collective job satisfactio n (Whitman,
Van Rooy, & Viswesvaran, 2010). This eventually cumulates in decreased financial
performance. The proposed indirect effect should be weaker (stronger) in (non-)family firms. We
test our predictions across two studies. First, we conducted a field study of matched data from
supervisors and employees to establish the moderating effect of family firm status. In Study 2,
we then used a large multi-source, secondary data sample to replicate findings and uncover the
organization-level implications of the moderated trickle-down effect.
We extend family firm research by uncovering potential that is naturally lacking in non-
family firms and, thus, provides family firms with a unique competitive advantage. This extends
theory regarding disadvantages of family firms that may be transformed into strengths towards
fear of competitive threats (Duran, Kammerlander, van Essen, & Zellweger, 2016). We also
extend AS research by adapting it to the organizational level and by linking it to objective
indicators of performance as called for by Tepper, Simon, and Park (2017).
THEORY AND HYPOTHESES DEVELOPMENT
Manager and Supervisor Abusive Supervision Through a Social Learning Lens
According to SLT, individuals learn how to interpret external stimuli and to respond in a
certain manner by observing and mimicking the behavior of significant others from the
individuals’ social environment (Bandura, 1977). There is support that managers set an informal
example for negative behaviors (Tucker, Turner, Barling, & McEvoy, 2010). Consequently,
when supervisors experience abuse from their managers, they tend to construe that this sort of
behavior is legitimate. This should lead supervisors to adopt more abuse tendencies in their own
leadership efforts targeted towards their followers (Liu et al., 2012; Mawritz et al., 2012).
H1: Manager AS is positively related to supervisor AS.
The Moderating Influence of (Non-)Family Firm Status
According to Bandura (1977), the level of emulation of role-models‘ behavior is
dependent on motivation and attention. We argue the trickle-down effect of AS to be less in
family firms, because supervisors are less likely to remember and less motivated to emulate AS.
We fo llow recent work (e.g., Duran et al., 2016) to define family firms as organizations
that are characterized by the existence of individuals, related by family ties, who exert substantial
influence on the firm. They do so through, for example, family control realized via voting rights
and through managerial control realized via key management positions held by family members.
Our explanation for the boundary function of family firm status draws on the disparities that set
family firms apart from non-family firms. In this regard, Miller, Le Breton-Miller, and Scholnick
(2008) introduced the ‘stewardship perspective’ and ‘stagnation perspective’ to subsume
organization level differences. We posit family firm status to be such a unique moderator for the
trickle-down effect of AS because both pathways are posited to yield the same outcome of a
decreased relationship between manager and supervisor AS.
10.5465/AMBPP.2020.233
Stewardship and Stagnation
An organizational culture of high stewardship is characterized by allowing organizational
members to reach their potential and by inspiring care and loyalty (Zahra, Hayton, Neubaum,
Dibrell, & Craig, 2008). It has been suggested that family firms place greater emphasis on the
components of stewardship compared to their non-family counterparts (Davis, Allen, & Hayes,
2010; Neubaum, Thomas, Dibrell, & Craig, 2017). A key driver for this relates to the
involvement of anowning family. Key decision-makers and leaders are often deeply preoccupied
with assuring the longevity and survival of the business. This is then also tied to a higher concern
for employees who are seen as vital to corporate well-being as they contribute to a culture of an
motivated and loyal workforce. There is already preliminary evidence indicating a higher level of
stewardship in family firms compared to non-family firms (Neubaum et al., 2017).
We argue stewardship to also function as a coping mechanisms for supervisors to handle
experienced abuse. Given the collectivist posture, supervisors should see it as part of their
personal obligation to protect employees. Thus, their decision to (not) show certain leadership
behaviors may be less affected by the ma nagers as role models but also by nurturing and
protective motives towards their immediate followers. Accordingly, we expect the relationship
between manager and supervisor abuse to be weaker (stronger) in (non-)family firms.
H2: Form of organization moderates the relationship between manager AS and
supervisor AS; the relationship is weaker (stronger) in (non-)family firms.
H3: Stewardship culture mediates the moderating effect of form of organization on the
relationship between manager AS and supervisor AS; the relationship is weaker
(stronger) when stewardship culture is high (low).
As Miller, Le Breton-Miller, and Scholnick (2008) note the stagnation perspective is not
an integrated theory. It is more a set of findings and suggestions that overlap to the extent that
family firms face more competit ive threats than non-family firms. For instance, generatio nal
succession processes are major challenges for family firms and business families (Cabrera-
Suárez, Déniz-Déniz, & Martín-Santana, 2015). Family conflicts, altruism, and nepotism may
also contribute to a shortage of managerial talent as well as a redirection of resources (De Massis
& Foss, 2018). Furthermore, family firms often avoid the capital market to hold on to family
ownership and to avoid uncertainty. This limits family firms in their abilities to respond to
threats (Duran et al., 2016). Albeit the aforementioned characteristics all point to disadvantages
of family firms compared to non-family firms, we argue that there still is a simultaneous upside
that should be relevant for understanding the trickle-down effect of AS. According to SLT, the
emulation of role-models’ behavior depends on the attention to and retention of such behaviors
(Bandura, 1977). The less attention an individual devotes to the role-model’s behavior and the
less he or she is able to remember it, the less likely it is that behavior emulation occurs. We
expect that the competit ive threats family firms face should have the implications that
supervisors spend less attention to manager AS and thus adopt less AS.
The threat response literature provides theoretical orientation for this notion (Frijda,
1986). Fear can be adaptive as it motivates and coordinates actions to deal with potential or
existing threats. Individuals’ dominant impulsive reaction to fear and threats occur in the form of
‘flight’ responses such as withdrawal, freezing in place, or avoiding a situation (Lebel, 2016). In
10.5465/AMBPP.2020.233
this process, they shift their focus of attention away from others towards a more introspective
and inwardly focused posture (Hobfoll, 1989, 2001). Accordingly, manager AS and the
accompanied cascading effects should be lessened for supervisors working in family firms.
H4: Fear of external threat mediates the moderating effect of form of organization on the
relationship between manager AS and supervisor AS; the relationship is weaker
(stronger) when fear of external threat is high (low).
Adapting the Trickle-down Model of Abusive Supervision to the Organizational Level
Developments in the field strongly suggest that AS captures more than just the dyadic
relationship between a leader and single follower (Priesemuth, Schminke, Ambrose, & Folger,
2014; Tepper et al., 2017). With our application of AS to the organizational level we follow the
lead of others. Walter and Bruch (2010) posited leadership climate as the degree to which leaders
throughout an organization direct certain behaviors toward their followers. Thus, we suggest AS
climate as the extent of abusive exhibited by all leaders throughout an organization.
As this is the first study that not only addresses AS as an organizatio nal climate but also
adapts the trickle-down conception to the organizational level, we chose a parsimonious
theoretical route. We used employee job satisfaction climate as the proximal consequence of AS
climate. Drawing on Whitman, Van Rooy, and Viswesvaran’s (2010) work on unit-level job
satisfaction, we understand employee job satisfaction climate as a shared internal state of
organizational members that is expressed by affectively and cognitively evaluating shared job
experiences with some degree of favor or disfavor.
For the final step in our model, we expect employee job satisfaction climate to be
positively related to firmperformance. Individuals that are satisfied with their job are more
motivated to strive for greater accuracy and precision in their work (Judge, Thoresen, Bono, &
Patton, 2001). Accordingly, job satisfaction serves as a facilitator and energizer of productive
behavior. Meta-analytic evidence on this causal succession comes from Riketta (2008).There is
empirical evidence for positive correlations between composite scores of job satisfaction and
financial performance (Brown & Peterson, 1994).
H5: Employee job satisfaction climate mediates the negative relationship between
manager AS climate and organizational financial performance.
We integrate our assumptions regarding the bounded nature of manager AS’s effects.
Accordingly, we expect the indirect effect of manager AS climate on financial performance via
supervisor AS and decreased employee job satisfaction climate to be weaker in family firms.
H6: Form of organization moderates the indirect effect of manager AS climate on
financial performance through supervisor AS climate (Stage 1) and employee job satisfaction
climate (Stage 2), such that the relationship between manager AS climate and supervisor AS
climate is weaker (stronger) in (non-)family firms, attenuating (strengthening) the indirect effect.
STUDY 1
10.5465/AMBPP.2020.233
We collected data from leaders and followers. The leader version contained the measure
of manager AS. To identify firms as family, we asked leaders as key informants whether a family
is involved in the business through means of holding the majority of corporate shares and having
at least one family member being involved in the top level management or control of the
organization. In the follower questionnaire, we measured AS of the followers’ supervisor. In
sum, we retained matched data for 61 leaders and 190 followers from different organizations
Measures
Manager and Supervisor AS. We used Mitchell and Ambrose’s (2007) 5-item scale to
measure AS (Manager AS: α = .81; Supervisor AS: α = .83).
Form of Organization. Managers indicated whether the organization they work for is a
family firm or not (coding: 0 = non-family firm and 1 = family firm).
Stewardship Culture. Stewardship culture was measured with the 4-item scale (α = .84)
from Zahra, Hayton, Neubaum, Dibrell, and Craig(2008).
Fear of Competitive Threat. Fear of competitive threat was measured with the three items
from Lebel (2016). Ratings were aggregated to the team level. The internal consistency was .89.
Results
Consistent with H1, we found manager AS to positively predict supervisor AS (B = 0.17,
p≤ .01). This relationship was weaker in family firms (B = -0.03, ns)and stronger in non-family
firms (B = 0.20, p≤ .01), confirming H2. We did not find evidence for stewardship culture to
mediate the moderating effect of family firm status leading to the rejection of H3. In contrast and
as predicted in H4, fear of competitive threats was stronger in family firms and moderated the
effect of manager AS on supervisor AS. The effect was stronger with low fear of threat (B =
0.43, p≤ .01) and weaker with high fear of threat (B = -0.01, ns).
STUDY 2
First, we identified the largest 5,000 German firms using the Bureau van Dijk’s “Dafne”
database. We then searched these companies on the platform Kununu.de, the largest website for
employee reviews in the German-speaking region. Next, we merged the financial data from
Dafne with the Kununu reviews. To categorize a firm as family or non-family, we used available
data also from the Dafne database. We defined a firm as family when a family owned at least 20
percent of the shares and was present in the management. We narrowed down to the review
period from 2016 to 2017. This reduced our sample to 149 firms with 3,725 qualitative ratings
37,308 quantitative ratings with matched performance and family firm status data.
Measures
Manager and Supervisor AS Climate. We measured AS based on qualitative responses
provided on the Kununu platform. The platform allows respondents to provide written feedback
on leadership. We developed a detailed coding manual based on Tepper (2000) and coded all
3,725 leadership reviews accordingly.We then summarized codes to the organizational level.
10.5465/AMBPP.2020.233
The Kununu questionnaire asks respondents to indicate whether they hold leadership positions or
not. We used this information to differentiate between manager and supervisor AS.
Employee Job Satisfaction Climate. Job satisfaction was measured using 13 items (α =
.96) provided by the online platform on which respondents could rate their satisfaction with
regard to different aspects of their work (work climate, career perspectives, leadership, etc.).
Financial Performance. We measured firm performance by return on assets (ROA).
Results
In support of H5, we found employee job satisfaction climate to mediate the negative
relationship between manager AS climate and financial performance (estimate = -0.08, 99% CI =
[-0.205; -0.007]). In H6, we tested the indirect relationship between manager AS climate on
organizational financial performance through supervisor AS climate (Stage 1) and employee job
satisfaction climate (Stage 2). Manager AS climate and financial performance were indirectly
related in non-family firms via the serial mediators of supervisor AS climate and employee job
satisfaction climate (estimate = -0.04, 95% CI = [-0.108; -0.001]). The indirect effect was weaker
in family firms (estimate = -0.02, 95% CI = [-0.045; -0.001]) confirming H6.
DISCUSSION
The aim of this study was to examine the organizational level implications of AS. We
showed manager AS to set a chain in motion which via effects on supervisors’ leadership and
employees’ job satisfactio n eventually yield in decreased financial performance. We further
revealed that due to the higher fear of competitive threats in family firms, the downstream
consequences of manager AS are decreased in family firms and stronger in non-family firms.
We provided evidence that AS is detrimental to the organization as a whole. Although
this could be intuitively expected, our findings using an objective performance (cf., Tepper et al.,
2017) indicator substantially underscore prior claims based on estimations of the macro-level
harm that is caused (Tepper, 2007). Second, we found that as expected not firms suffer equally
from manager abuse. Manager AS was less detrimental in family firms. With this finding we
continue the momentum of research on organizational level influences on AS (Mawritz et al.,
2014). The empirical evidence was compelling as we replicated the interactive effect across both
studies using different study designs.
Consistent with other research, our study points to the complex nature of family firms’
success. It necessitates a nuanced and integrated approach to understand the precise areas why
and how family firms succeed. Doing so, allowed us to identify and empirically confirm unique
family firm capabilities.We expanded our social learning perspective by integrating theories of
stewardship and threat response. We elucidated the upside of the many competitive threats
family firms face. While limited financial flexibility, uncertainty avoidance, or talent shortage
pose threats to the survival and longevity of family firms, we revealed that they also have a
second side of the coin. Given individuals’ coping preferences towards disengagement when
facing threats, we showed that family firm employees cope better with experienced abuse. In
contrast, we did not find support for the stewardship.
REFERENCES AVAILABLE FROM THE AUTHORS
