Influence of Family Climate Towards Leadership Effectiveness in the Family Owned Business

Long-term sustainability and social responsibility are highly valued by family businesses, and their unique culture and values are often transmitted across generations. This study investigates the influence of family climate on leadership effectiveness in family-owned businesses. A quantitative survey was conducted among 150 next-generation family business leaders from selected districts in Tamil Nadu, with 125 complete responses used for analysis. The study examines three dimensions of family climate—open communication, cognitive cohesion, and intergenerational authority—and their impact on leadership effectiveness using structural equation modeling (SEM). The findings reveal that family climate significantly influences leadership effectiveness and provides insights for sustaining family businesses across generations.