An Organizational Justice-Based View of Self-Control and Agency Costs in Family Firms Michael H. Lubatkin, Yan Ling and William S. Schulze University of Connecticut and E.M. Lyon School of Business, Storrs, Connecticut; George Mason University, Fairfax, Virginia; University of Utah, Salt Lake City, Utah  By integrating insights from two seemingly disparate literatures – economics and organizational justice – within the general agency framework, we advance propositions that suggest a fine-grained explanation of agency costs at family firms. In so doing, we account for the differential effects of the controlling owners’ self-control (i.e. the governance mechanisms they adopt and how they administer those mechanisms) on the justice perceptions of the family and non-family employees. Our integrative view allows us to strike a realistic balance between the overly optimistic views about family firm governance that have been expressed by agency scholars and the overly pessimistic views expressed by management scholars in the past few years. INTRODUCTION The family business literature describes various forms of family business ownership based on the stage of ownership dispersion, such as sibling partnership (where varying proportions of ownership are held by members of a single generation) and cousin con- sortium (where ownership is further fractionalized as it is passed on to include third and later generations) (Gersick et al., 1997). In fact, the world’s most common form of family business ownership, and the one that this paper will focus on, is the family firm that is characterized by a controlling owner (La Porta et al., 1999). Three ownership attributes distinguish this business form (henceforth, ‘family firms’) from other privately-held firms: (1) its shares are held primarily by two or more generations of the same nuclear family, most of whom are members of the governing board and the management team; (2) its shares are concentrated in the hands of a single owner- manager – the ‘controlling owner’ – who is usually the CEO and often is the founder and head of the household; and (3) its shares are neither publicly traded nor partially owned by venture capitalists. Address for reprints: Michael H. Lubatkin, University of Connecticut and E.M. Lyon School of Business, Department of Management, 2100 Hillside Road, Unit 1041, Storrs, CT 06269-1041, USA (Mike.Lubatkin@business.uconn.edu). © Blackwell Publishing Ltd 2007. Published by Blackwell Publishing, 9600 Garsington Road, Oxford, OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA. Journal of Management Studies 44:6 September 2007 doi: 10.1111/j.1467-6486.2006.00673.x