SMALL BUSINESS MANAGEMENT - CHAPTER 3 - FAMILY ENTERPRISE
DISCUSS THE FACTORS THAT MAKE A FAMILY BUSINESS UNIQUE
Entrepreneurs face difficult choices in reconciling the competing demands of business & family, & maintaining an appropriate balance btw the two is difficult. The advantages of a family business include a strong commitment of family members & focus on people, quality & long-term goals.
IDENTIFY MANAGEMENT PRACTICES THAT ENABLE A FAMILY BUSINESS TO FUNCTION EFFECTIVELY
Family councils provide a formal framework for the family's ongoing discussion of family & business issues. Family business constitutions can guide a company through times of crisis or change.
DISCUSS THE FACTORS THAT MAKE A FAMILY BUSINESS UNIQUE: The word family refers to a group of people bound by a shared history & a commitment to share a future together while supporting the development & well-being of individual members.
Family members have a special involvement in a family business. Business interests: production & profitability, overlap family interests: care & nurturing, in a family business.
IDENTIFY MANAGEMENT PRACTICES THAT ENABLE A FAMILY BUSINESS TO FUNCTION EFFECTIVELY: Good management practices are as important as good family relationships in the successful functioning of a family business.
Family members, as well as all other employees, should be treated fairly & consistently, in accordance with their abilities & performance. Following best practices can help family firms design effective management systems.
DESCRIBE THE COMPLEX ROLES AND RELATIONSHIPS INVOLVED IN A FAMILY BUSINESS
In-laws play a crucial role in the family business, either as direct participants or as sideline observers. The role of the founder's spouse is specially important, as he or she often serves as a mediator in family disputes & helps prepare the children for possible careers in the family business.
IDENTIFY MANAGEMENT PRACTICES THAT ENABLE A FAMILY BUSINESS TO FUNCTION EFFECTIVELY
Motivation of non family employees can be enhanced by open communication & fairness. Family retreats bring all family members together to discuss business & family matters.
DESCRIBE THE COMPLEX ROLES AND RELATIONSHIPS INVOLVED IN A FAMILY BUSINESS: A primary and sensitive relationship is that between founder and son or daughter.
Some couples in business together find their marriage relationship strengthened, while others find it weakened. Sons, daughters, in-laws, and other relatives may either cooperate or squabble (quarrel) with each other as they work together in a family business.
EXPLAIN THE FORCES THAT CAN KEEP A FAMILY BUSINESS MOVING FORWARD
Sometimes it is important to change the direction or practices of the family business som that it can keep up with emerging realities, and this often occurs as leadership passes from one generation to the next.
DESCRIBE THE PROCESS OF MANAGERIAL SUCCESSION IN A FAMILY BUSINESS
Tension often arises between the founder & the potential successor as the latter gains experience. Transfer of ownership involves issues of fairness, taxes, & managerial control.
EXPLAIN THE FORCES THAT CAN KEEP A FAMILY BUSINESS MOVING FORWARD: Special patterns of beliefs & behaviours constitute the organizational culture of a family business.
The founder often leaves a deep imprint on the culture of a family firm. Family members may be committed to the family business for different reasons: desire, sense of obligation, calculated costs, & personal needs, and these reasons will likely determine the nature & strength of that commitment.
DESCRIBE THE PROCESS OF MANAGERIAL SUCCESSION IN A FAMILY BUSINESS: The quality of leadership talent available in the family determines the extent to which outside managers are needed. Succession is a long-term process starting early in the successor's life.
The succession process begins with the pre-business stage & includes introductions to people associated with the company & part/time jobs in the firm. Later stages involve education & personal development, proof of competence, a formal start in the business, & a declaration of succession.