Institutional governance understanding and influence of professionalism on company performance in family-run businesses

The survival of firms in the rapidly globalizing world depends on both their utilization of the past experiences and their ability to plan their future in line with the requirements of the global age. The level of adaptation to the global structure is contingent on many factors such as the extent to which firm activities are organized and directed in accordance with corporate governance philosophy by professional managers.Family-run businesses that are established by individual(s) and achieve successes through the utilization of simple organizational behavioral techniques during the initial years, run into difficulties in adapting to the rapidly changing and complex markets conditions over time. The initial organization structure of these firms fail to respond to the challenges brought about by the changes in the content and forms of utilizing information, the rapid innovations in technology, the competitive market conditions, and the transformations in the business environment. Under these conditions, the need arise for a new organizational structure and management strategy that will improve the life and performance of such firms. The ability of small-scale businesses to maintain their operations in a sustainable manner and their performance in reaching strategic objectives depend on their level of professionalization and institutionalization.This study examines the coverage of corporate governance philosophy and professionalization in the management sciences, the interaction of these two concepts with different management strategies, and the relationship between professionalization and institutionalization and the firm performance. Based on its findings, the study will both contribute to the literature on management sciences, and help guide the firm owners, shareholders and leaders in analyzing the conditions of their firm and managing the process of institutionalization.