The Family Business Bulletin

A Quarterly Report from the Center of Family Enterprise Research
Mississippi State University

The Family Business Bulletin provides insights, research findings, and resources tailored to the unique needs of family-owned businesses across Mississippi. It is intended to provide tips and information that will be useful to those who are starting, currently own, or want to acquire a family firm.

Preparing for the Future in Family Firms

In this issue of The Family Business Bulletin, we present information about preparing for the future in family firms. Here you’ll find global insights as well as practical advice derived from research. This information will provide useful insights into 1) the challenges of professionalization in family firms, 2) how mentoring is a useful tool for fostering organizational commitment of both family and non-family employees, including tips for mentoring, 3) how one of our very own College of Business students is preparing for the future in his family firm, 4) how MSU’s entrepreneurship major supports family entrepreneurship and innovation, and 5) open-access resources to support family entrepreneurship.

INFORMATION – Performance Monitoring and Incentives

Professionalization of Family Firms:
Monitoring and Rewarding Performance

by Dr. James J. Chrisman, COFER Director and Julia Bennett Rouse Endowed Professor of Management

If entrepreneurial family firms are to engage in profitable growth, at some point they need to recruit non-family managers. While this can be beneficial, it does introduce the challenge of professionalization involving changes in the firm’s authority relationships, performance expectations, incentive structure, and performance monitoring.

Of particular concern is the design of incentive and monitoring systems to ensure managers’ performance is consistent with the achievement of the firm’s goals. The problems associated with evaluating and rewarding performance vary in family and non-family firms owing to variations in goals, differing altruistic behavior toward employees, and strategic time horizons.

First, managers in family firms may be called on to achieve a broader and more complex array of goals because family owners seek noneconomic objectives associated with controlling ownership and identification with the firm. The problems associated with setting, monitoring, and communicating noneconomic goals are greater because they are highly subjective.

Second, the inherent tendency to treat family managers altruistically does not exist for non-family managers. This altruism can damage the performance of family firms over time even though owners may gain some psychological benefits. However, the most serious problem it may cause is its impact on future managers because of the precedent it sets. If not carefully managed, this precedent can affect the motivation and ability to recruit high quality managers, whether family members or not.

Finally, because many family owners intend to pass ownership and management to the next generation, a longer-term perspective is more likely to influence strategic thinking than is the case for owners of non-family firms, who are apt to sell or liquidate a firm’s assets when ready to retire. Although a long-term perspective is good for the family firm, it must be judiciously handled because non-family managers who must implement the strategy are unlikely to equally share its benefits. Deciding what to do a year ahead can be fraught with problems, but it doesn’t compare with the difficulties in making decisions regarding the next ten or twenty years.

To conclude, professionalization involves an agreement between owners and managers that defines (1) goals and strategies, (2) how performance will be monitored, (3) how performance will be measured, and (4) how managerial performance will be rewarded. Given that family firms often have goals idiosyncratic to the family, clear communication and consistent implementation between family owners and both family and non-family managers is as important to superior performance as a well-thought-out strategy. Likewise, monitoring is only as good as the information it provides to owners and managers so they can understand how to improve performance.

This article is adapted from: Chua, J.H., Chrisman, J.J., & Bergiel, E.B. (2009). An agency theoretic analysis of the professionalized family firm. Entrepreneurship Theory and Practice, 33, 355-372.

INFORMATION – Commitment through Mentoring

Mentoring: Ensuring Commitment to the Family Firm

by Dr. Laura Marler, Jim and Pat Coggin Professor of Management

Mentoring occurs when a more senior employee – the mentor – helps a less experienced employee – the protégé – “learn the ropes.” When employees are mentored, they experience improved career outcomes in areas that can be measured objectively, like salary, and other more subjective ones, such as career satisfaction. Research shows that mentoring leads to benefits for both employees and organizations. It is a common practice in many companies due to the benefits it fosters, including higher performance, lower turnover, and increased organizational commitment.

Organizational commitment represents an employee’s positive psychological attachment to the organization. Committed employees accept company goals and values as their own and seek to remain part of the organization. When employees feel this allegiance, they are more satisfied, have higher performance, and are less likely to quit.

When employees are mentored, this investment in them by their firms can create the inclination to do something in return. The desire to offer something in return is part of the “norm of reciprocity.” Due to the norm of reciprocity, mentored individuals experience positive attachments such as organizational commitment. Two key types of support are associated with mentoring that aid in creating committed employees: career-related support and psychosocial support.

Career-related support is focused on skill building. It occurs when a mentor exposes a protégé to key individuals in the organization, offers challenging work assignments, and provides protection from organization politics. In the family firm, a mentor provides career-related support when exposing the protégé to key clients, explaining succession pathways, and even offering protection during leadership transitions.

Psychosocial support focuses on the emotional, social, or psychological aspects of development. Psychosocial support enhances an employee’s sense of competence, identity, and effectiveness through acceptance, counseling, friendship, and role modeling. In a family firm, psychosocial support may include sharing family values, socializing employees into the family culture, and creating emotional connections to the firm.

In family firms, the commitment of both family and non-family employees is essential to daily function and can help prepare for future transitions. Mentoring plays an even more important role if the family seeks to keep the firm for future generations. The succession process and outcomes are dependent on a successor who feels an attachment or commitment to the firm. Potential successors are likely to have stronger goal and value alignment if they have been mentored in a way that enhances commitment. Similarly, the commitment of non-family employees is critical during the succession process. If non-family employees are committed to the family firm and accept the successor as the new leader, the family firm is more likely to flourish into future generations.

Family vs. Non-Family Mentors
Both family and non-family members can serve as mentors. In Dhaenens, Marler, Vardaman, & Chrisman (2018), we suggest mentoring results in different types of support depending on the family status of those involved.
Benefits of Family Mentoring
Family mentors are likely to provide more psychosocial support due to their emotional ties to the family and the firm, as well as their embodiment of family values. Family mentoring of both family and non-family employees enhances commitment by creating stronger feelings of obligation and duty. Family mentors can benefit non-family protégés by helping them feel accepted and that they belong.
Benefits of Non-Family Mentoring
Non-family mentors offer more career-related support, especially if they have work experience outside the family firm. Being mentored by non-family members can help family protégés recognize the unique advantages associated with family membership. Non-family mentoring of non-family employees can create a sense of commitment due to the solidarity that comes from sharing non-family status.
Tips for Mentoring in Family Businesses

1. Focus on more than skills.

Effective mentoring includes both career-related support and psychosocial support. Teaching employees how to do the job is important, but helping them feel valued and connected is also important for fostering commitment.

2. Create opportunities for exposure and growth.

Mentors can strengthen commitment by introducing protégés to key customers, suppliers, and leaders; assigning meaningful responsibilities; and helping them understand potential career paths within the business.

3. Share the story behind the business.

Family firms have a unique advantage because they can connect employees to the firm’s history and values. Mentors who explain why the business exists and what it stands for can enhance employees’ attachment to the organization.

4. Use both family and non-family mentors.

Experienced family members and trusted non-family employees each bring unique strengths as mentors. The first may be particularly effective at transmitting values and culture, while the latter may offer valuable career guidance and broader business perspectives.

5. Start mentoring before succession begins.

Mentoring should not begin when a leadership transition is announced. Developing commitment among potential successors and key employees over time creates continuity, trust, and support to prepare for future transitions.
In summary, both experienced family and non-family employees can serve as mentors in the family firm. Similarly, both family and non-family employees are likely to benefit from mentoring. In most cases, mentoring will lead to increased levels of commitment among employees who experience a sense of obligation due to the support they have received. Mentoring improves outcomes such as organizational commitment in the present as well as the future.

The source for this article is Dhaenens, A. J., Marler, L. E., Vardaman, J. M., & Chrisman, J. J. (2018). Mentoring in family businesses: Toward an understanding of commitment outcomes. Family Business Review, 31(2), 194–216. https://doi.org/10.1016/j.hrmr.2017.05.005

STUDENT SPOTLIGHT

A Future in Restaurant Ownership: Jay Huang

by Dr. Chelsea Sherlock, Assistant Professor of Management

Jay Huang

Tyummi Café and Pho Bowl is a family-owned Vietnamese restaurant in Starkville, MS, founded in 2021 with a mission to provide authentic Vietnamese cuisine and a welcoming café-style atmosphere. The restaurant differentiates itself through its commitment to quality and authenticity, particularly through its traditional pho broth made daily from real beef bones rather than premade mixes. In addition to Vietnamese dishes such as pho, rice platters, and fried rice, Tyummi has developed a strong market presence through its popular boba teas, fruit teas, and smoothies.

Its owners have extensive restaurant industry experience and operate Tyummi with a strong emphasis on family values, authenticity, and long-term continuity. Frequently occupied with their other four restaurants around the state, the Tyummi owners rely heavily on their college-age children to manage day-to-day operations in Starkville, demonstrating the family-centered structure of the firm.

I recently spoke with son Jay Huang, a 2026 graduate of MSU’s College of Business. Jay explained that he has been around the restaurant industry for most of his life and has developed a strong connection to his family’s business through his experiences. He is an owner in the family’s restaurant group.

Asked about his future involvement in the business, Jay expressed both enthusiasm and a long-term commitment to continuing his family’s legacy and growing it, stating, “I want to become the successor of my family’s business but also open up my own restaurant in the future.

“I want to be involved in it because I want to carry on my family’s legacy,” he continued. “That’s all we knew growing up, and it has carried us to the success that we have today.”

Throughout the interview, Jay described Tyummi’s culture as being centered on quality over speed, treating customers like family, and maintaining strong relationships with employees and suppliers. He also discussed how leadership development within the family follows a “learn by doing” philosophy in which future successors gain experience across all areas of restaurant operations before taking on greater responsibility.

Reflecting on his experience in the Family Business Management course during the fall semester, Jay explained that the course helped him recognize the importance of long-term succession planning.

“Not only do I want to take over the family business,” he shared. “But I also want the business to succeed down the line for many future generations.”

Before he joins the family business full time, Jay plans to further his education with a Master of Professional Accountancy degree through MSU’s Adkerson School of Accountancy.

INFORMATION – Developing Entrepreneurs

Preparing Entrepreneurship Majors for the Future

Dr. Erik Markin, Associate Professor of Management

The entrepreneurship major at Mississippi State is designed to prepare students for the future by combining entrepreneurial fundamentals, creative problem-solving, hands-on learning, and real-world venture development. Through a progression of courses, they gain the mindset and practical skills needed to launch, lead, innovate, and adapt in today’s rapidly changing economy.
Our students begin with the course Entrepreneurship, where they explore the foundations of entrepreneurship and innovation. They are introduced to the entrepreneurial mindset, opportunity recognition, venture planning, funding pathways, and growth strategies along with an emphasis on the role entrepreneurship plays in economic and social development. Students learn how entrepreneurs think, evaluate opportunities, and transform ideas into actionable ventures.

Building on this foundation, the Innovation & Creativity class challenges students to think “outside the box.” The course encourages creative problem-solving, innovation, and unconventional thinking that can be applied not only to startups, but also to leadership roles within existing organizations.

The Experiential Innovation and Entrepreneurship class moves from theory to practice through hands-on, experiential learning in the makerspace environment. Working individually and in teams, students identify problems, test solutions, evaluate opportunities, develop business models, and develop prototypes. The course emphasizes creativity, communication, teamwork, and action-oriented learning that mirrors real entrepreneurial environments.

Entrepreneurship students also benefit from the strong business core within the College of Business, which prepares them for managerial, operational, and financial decision-making roles. Finally, they complete Venture Creation, the program’s capstone course, where they integrate their knowledge into a pitch-ready business plan designed to secure support, investment, and resources to bring their ventures to life.

Whether students aspire to launch their own ventures, lead within established organizations, or drive innovation in the marketplace, the entrepreneurship major equips them with the knowledge, skills, and experiences needed to succeed. By combining creativity, action, and business fundamentals, the program prepares graduates to thrive in an increasingly dynamic and entrepreneurial world.

For more information, contact Entrepreneurship Coordinator Dr. Erik Markin at [email protected] or explore our WEBSITE.

RESOURCES

Open Resources for Family Firms

Family businesses do not have to navigate complex challenges alone. High quality, open-access resources offer guidance on topics ranging from succession to governance, growth, and even exits.
  • Familybusiness.org offers open access to articles written to help family businesses succeed. Research-based insights are shared with practitioners in mind.
  • Entrepreneur & Innovation Exchange contains open-access articles, interviews, and videos based on applied entrepreneurship research written for founders and business leaders.
  • SCORE provides free mentoring and education programs for small businesses through a large volunteer network of experienced executives.
  • The Mississippi Small Business Development Center Network provides free business counseling, training, and resources to help entrepreneurs start, grow, and strengthen their small businesses.
  • The U.S. Small Business Administration offers free courses, guides, and training through the SBA Learning Center.
  • Family Business/Business Family Podcast is hosted by Zack Needles, editor-in-chief of familybusinessmagazine.com. Each episode features conversations with owners, advisors, and other family business professionals on all the things that make being part of a family enterprise so challenging – and so rewarding!
Mississippi State University’s Center of Family Enterprise Research (COFER) is dedicated to advancing research, education and support for family-owned businesses with a focus on Mississippi’s unique family business landscape.

Dr. Jim Chrisman, Director of COFER

662-325-3928

EMAIL

WEBSITE

Mississippi SBDC

America’s SBDC

Mississippi State University is an equal opportunity institution.

Editor: Dr. Laura Marler

Head, Department of Management & Information Systems & Jim and Pat Coggin Endowed Professor of Management

Publisher: Tellos Creative

A Family Firm