Abstract
This paper explores the impact of family managers and directors on the performance of firms with broad or narrow product portfolios. We test the effectiveness of family managers and directors in the context of these different strategies using a dataset of 384 publicly traded German firms from 2000 to 2009. We find that family members are better placed to manage and control firms that are narrowly focused rather than diversified as they may not have the expertise, skills and capabilities to manage the complexity of the latter. However, we also show that these initial constraints can be overcome with time.