Testing the "Fredo Effect": A U.S. Family Business Study

Family businesses employ approximately 60% of the U.S. private-sector workforce, yet quantitative research examining workplace deviance within these organizations remains limited. This study investigated the "Fredo Effect," defined as the presence of a family member whose incompetence or unethical behavior undermines organizational effectiveness. Specifically, the study examined whether family member impediments indirectly influence organizational attractiveness and job pursuit intentions through workplace deviance and whether these relationships differ between first-generation and later-generation family businesses. A four-wave quantitative survey design was employed using U.S. family business employees recruited through Prolific. Previously validated measures of family member impediment, workplace incivility, organizational attractiveness, and job pursuit intentions were administered across sequential survey waves to reduce common method bias. Structural equation modeling and multigroup analysis of structural invariance were used to test the proposed relationships. Results indicated that the hypothesized model was not supported in the main study, nor were significant differences observed between first-generation and later-generation family businesses. Although the pilot study provided initial support for the proposed model, these findings were not replicated in the primary sample. Despite the lack of statistical support, this study contributes to the family business literature by providing one of the first empirical tests of the Fredo Effect, utilizing a multi-wave research design and incorporating efforts toward sample representativeness. The findings establish a foundation for future research examining workplace deviance, family dynamics, and employee perceptions within family-owned organizations.