Kim­berly Eddle­ston wants to know how the “family” in family-​​run busi­nesses either serves to con­strict or pro­mote a firm’s success.

Are they suf­fering from ‘The Fredo Effect,’—meaning, are they employing someone in the family busi­ness, like the famous char­acter in ‘The God­fa­ther,’ who could never get a job else­where?” asks the North­eastern asso­ciate pro­fessor of entre­pre­neur­ship and inno­va­tion. “Or are they prac­ticing good stew­ard­ship and really moving the busi­ness forward?”

No stranger to the ins and outs of family-​​run businesses—Eddleston’s father owned a law firm, and her grand­fa­ther owned a hotel—the pro­fessor sur­veyed entre­pre­neurs at smaller-​​scale busi­nesses to reveal aspects of family-​​business dynamics, and glean insights into the ways in which a family can help or hinder its own company’s success.

Eddle­ston recently con­cluded her data col­lec­tion, dis­cov­ering upwards of 20 per­cent, pos­sibly 30 per­cent of com­pa­nies admit to employing a non­pro­duc­tive family member.

In many cases, CEOs acknowl­edged that they are employing a family member, a “Fredo,” as she describes them, who’s more of a hin­drance than a help to the operation.

The Fredo Effect is about deviance in the family firm, about nepo­tism, or chil­dren given a place in the firm because of their last name, not their abil­i­ties,” Eddle­ston says.

On the flip side, a busi­ness can prosper under the direc­tion and stew­ard­ship of a family when family mem­bers vol­un­teer their own time or spe­cial skills so that the enter­prise may prosper, she says.

An example of this might be found in a family-​​owned restau­rant, where you might see the kids working, and maybe the wife does the book­keeping,” Eddle­ston says.

In down eco­nomic times,” she adds, “family mem­bers may say they don’t need to be paid as a way of pre­serving human capital.”

Eddle­ston con­ducted her research via sur­veys of CEOs over the course of many months.

Eddle­ston has pub­lished numerous arti­cles on the role of the family in busi­ness. They include, “Destruc­tive and pro­duc­tive family rela­tion­ships: A stew­ard­ship theory per­spec­tive” in the Journal of Busi­ness Ven­turing, 2007; “The pre­quel to family firm cul­ture and stew­ard­ship: The lead­er­ship per­spec­tive of the founder,” in Entre­pre­neur­ship Theory and Prac­tice, 2008. In addi­tion, “The impact of family versus career role salience on the per­for­mance of family and non-​​family firms” is slated to appear soon in Family Busi­ness Review.