scholarly journals Analysis of key challenges of family businesses

2020 ◽  
Vol 1 (2) ◽  
pp. 67-83
Author(s):  
Ana Mandic ◽  
Vlatka Mandic
Keyword(s):  
Local Government ◽  
Family Business ◽  
National Economy ◽  
Family Firms ◽  
Family Members ◽  
Family Businesses

Family business represents the most common form of the company ownership and makes around 70% to 90% of all firms around the globe depending on the definition one uses. It is estimated that worldwide, family firms account for about 40% to 70% of employment and GDP. The aim of this paper is to provide overview of main characteristics of family business in general and to analyze key challenges family businesses generally are facing today. Additional aim of the paper is to provide overview of research on family business in Croatia and to analyze characteristic and challenges of family businesses in Croatia. Paper provides brief overview of key trends which can have negative implications on companies, their owners, as well as for a wide network of stakeholders such as family members, customers, suppliers, employees, banks, local government and the national economy in general. Some of the challenges discussed in the paper could be relevant to all types of firms. However, with reference to family business these challenges may be more salient than in nonfamily firms or they may need to be addressed differently.

Small family business in Russia: formal or informal?

2018 ◽  
Vol 38 (9/10) ◽  
pp. 809-822 ◽  
Author(s):  
Alexander Chepurenko
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family Members ◽  
Family Businesses ◽  
Entrepreneurial Activity ◽  
Small Scale ◽  
Content Type ◽  
Small Family ◽  
Scale Family ◽  
Russian State

Purpose The purpose of this paper is to deal with informal entrepreneurial activity of micro and small family businesses in the specific transitional environment. Design/methodology/approach The paper uses two cases – an informal micro business (“marginal” family business), and a formal retail small firm (“simpleton” family firm), respectively, of a panel conducted in 2013–2015 in Moscow. Findings First, the real distribution of responsibilities between family members is informal; it relies more on interpersonal trust and “common law.” Second, exactly the ease of governing such trust-based businesses for the founders’ generation sets limits of succession of small-scale family businesses. Third, as trust in the state is very low, the policy of Russian authorities to quickly force informal entrepreneurs to become legalized is substantially wrong; the results would be either a transformation of “simpleton” into “marginal” businesses or quitting business. Research limitations/implications Research limitations of the study are the number of observations and the localization of the panel only in the capital of Russia. Practical implications The fundamental failure of Russian State policy toward small-scale family businesses is its attempt to convince “marginal” to formalize and to oppress “simpleton” family businesses pushing them into informality. In fact, it should be designed vice versa: tolerate “marginal” businesses and let them to “live and die” while shaping a friendly environment for “simpleton” family firms. Originality/value The paper argues that the most important facet of informality in small family entrepreneurship is the informal property rights and governance duties’ distribution among the family members.

Passing on the legacy: exploring the dynamics of succession in family businesses in Pakistan

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Asma AbdulRahim Chang ◽  
Muhammad Shujaat Mubarik ◽  
Navaz Naghavi
Keyword(s):  
Family Business ◽  
Succession Planning ◽  
Design Methodology ◽  
Family Firms ◽  
Family Members ◽  
Family Businesses ◽  
Content Type ◽  
Traditional Family ◽  
Interviewing Technique

PurposeBy taking the theory of entrepreneurial legacy as the baseline, this study explores the various aspects of succession planning in indigenous family businesses especially the role of female family members in succession and conflicts in family businesses.Design/methodology/approachThe study is qualitative in nature and adopts narrative inquiry to explore the aspects of succession planning. In doing so, the study utilizes an in-depth interviewing technique with nine participants who run their family-owned firms which are mostly in their second or third generation for analysis.FindingsThe findings are concurrent with the literature that indicates a lack of strategic succession planning although ordinary or natural succession does occur in some firms. The study also reports a lack of consideration for female members in succession, daughters in particular, for traditional family firms (FFs) in contrast to entrepreneurial FFs.Research limitations/implicationsThe study has many implications for family-owned firms in Pakistan as they need to align their family business with the theory of entrepreneurial legacy and its three strategic activities in order to ensure the longevity of their business.Originality/valueExploring how succession planning takes place in family indigenous family businesses and what is the role of female family members in succession and conflicts in family businesses are original contributions of this study.

scholarly journals Coexistence, Unity, Professionalism and Prudence

2021 ◽  
Vol 11 (1) ◽  
Author(s):  
Miguel-Angel Gallo
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family Members ◽  
Family Firm ◽  
Family Businesses ◽  
The Family ◽  
Over Time

Family firms are complex and dynamic entities that are rich with peculiar, idiosyncratic features. The objective of this paper is to provide guidance to help those involved in family businesses, businesspersons, and family members to pursue the continuity of the family firm over time. Based on the author’s experience with entrepreneurs who built successful businesses, this paper identifies four elements that are critical to achieve transgenerational continuity in family firms, namely: coexistence, unity, professionalism, and prudence. The analysis of each element provides suggestions and key considerations for both scholars and practitioners in the family business field.

Succession in Family Business Through Authentic Leadership

2022 ◽  
pp. 488-503
Author(s):  
Elif Baykal
Keyword(s):  
Family Business ◽  
Authentic Leadership ◽  
Family Firms ◽  
Family Members ◽  
Family Values ◽  
Family Businesses ◽  
Multiple Stakeholders ◽  
Conflicting Demands ◽  
The Family ◽  
Succession In Family Business

Family businesses are the kind of organizations that are characterized by overlapping systems of ownership, management, governance, and family values. In family firms, the family is the main asset of the business, and family members are strictly bound to the firm. Due to the dominance of a specific family, the success of the company is closely linked to the proper administration of the duality in the industry, the existence of family and business simultaneously. This fact distinguishes family firms from other companies. Furthermore, managerial and ownership priorities of the owner family are maintained through intergenerational succession. And, the existence of multiple stakeholders and their conflicting demands necessitate a transparent and authentic leadership approach in this delicate process. In this chapter, it is proposed that in family firms, intergenerational succession is more convenient and less painful, in case an authentic leader who gives importance to high levels of awareness, transparency, and morality is in power.

Succession in Family Business Through Authentic Leadership

2019 ◽  
pp. 436-451
Author(s):  
Elif Baykal
Keyword(s):  
Family Business ◽  
Authentic Leadership ◽  
Family Firms ◽  
Family Members ◽  
Family Values ◽  
Family Businesses ◽  
Multiple Stakeholders ◽  
Conflicting Demands ◽  
The Family ◽  
Succession In Family Business

Family businesses are the kind of organizations that are characterized by overlapping systems of ownership, management, governance, and family values. In family firms, the family is the main asset of the business, and family members are strictly bound to the firm. Due to the dominance of a specific family, the success of the company is closely linked to the proper administration of the duality in the industry, the existence of family and business simultaneously. This fact distinguishes family firms from other companies. Furthermore, managerial and ownership priorities of the owner family are maintained through intergenerational succession. And, the existence of multiple stakeholders and their conflicting demands necessitate a transparent and authentic leadership approach in this delicate process. In this chapter, it is proposed that in family firms, intergenerational succession is more convenient and less painful, in case an authentic leader who gives importance to high levels of awareness, transparency, and morality is in power.

The innovation and internationalisation processes of family businesses

2017 ◽  
Vol 27 (2) ◽  
pp. 231-247 ◽  
Author(s):  
Vitor Braga ◽  
Aldina Correia ◽  
Alexandra Braga ◽  
Sofia Lemos
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family Businesses ◽  
Family Management ◽  
Multivariate Statistic ◽  
Content Type ◽  
Business Innovation ◽  
The Family ◽  
Internationalisation Strategies ◽  
Innovation Processes

Purpose The success of the family firms cannot be detached from the current paradigm where, within the present economic conditions, economic agents struggle to exploit the existing opportunities and need to take into account the risks associated to the international arena and the innovation processes. The internationalisation and innovation processes may trigger resistance within family business due to their relatively higher difficulty to take risks and to invest in industries outside the scope of their original core business. Innovation and internationalisation processes become relevant strategies for the family firms’ continuity and success. In line with such fact, the aim of this paper is to contribute with insights regarding the processes of innovation and internationalisation within family businesses. In particular, this paper aims to assess the propensity of such firms to apply such strategies, to identify the particular business behaviour and to assess the extent to which the particulars of family firms may constraint or lead to the implementation of innovation policies, and thus its internationalisation. Design/methodology/approach The data were collected through questionnaires within family business aiming to understand the scope and characteristics of internationalisation and innovation processes within these firms. The 154 replies from such data collection were analysed using different multivariate statistic procedures, although this paper is based on factorial and correlation analysis. Findings The analysis of the results shows that there is an association between the processes of innovation and internationalisation within family business. In addition, the results also suggest a typology of firms regarding their innovation and internationalisation strategies and motivations. Research limitations/implications The results of this paper are, to some extent, limited because they did not allow comparing the findings with data from non-family business. However, the authors’ aim was not to distinguish family firms, but rather to characterise them. Practical implications This paper expects to contribute with lessons for the management of family business and to raise awareness of the constraints faced by family business. It is important to highlight that family business performance may be affected by a lower propensity to risk-taking attitudes, by the lack of non-family management and to the necessity of separating the family and the business in the business dimensions that the family limits the business growth. Originality/value Although there is a significant amount of the literature devoted to explore family business, innovation and internationalisation studies, very few draw on the relationship between internationalisation and innovation processes within family business. This paper explores such a relationship within a particular business context – the family dynamics that strongly affect management and business development.

scholarly journals Entrepreneurial orientation in family firms – management and intercultural development

2014 ◽  
Vol 6 (4-1) ◽  
pp. 181-190 ◽  
Author(s):  
Wioletta Czemiel-Grzybowska
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family System ◽  
Open Systems ◽  
Family Businesses ◽  
Intercultural Development ◽  
System Perspective ◽  
Business Context ◽  
Systems Perspective ◽  
Business System

AbstractThis paper has taken an insight to the systemic models of family business from the open systems perspective. I focus on family business system models and on the subsystems content of family system and ownership system in family business context. The paper claim that the open system perspective on intercultural family businesses has both theoretical and empirical implications on family business research. Family businesses have many reasons, including family conflicts over money, nepotism leading to wrong management, and infighting over the succession of power from one generation to the other. Regulating the family’s roles as shareholders, board members, and managers is very important because it can help avoid these pitfalls. This paper will discuss the importance of the openness of the company through five the attributes of enduring family businesses: ownership, family, business and portfolio governance, wealth management, foundation. Dimension of attributes success have taken family business like five jewelers.

Outside Boards and Family Businesses: Another Look

1991 ◽  
Vol 4 (3) ◽  
pp. 269-285 ◽  
Author(s):  
Marc A. Schwartz ◽  
Louis B. Barnes
Keyword(s):  
Family Business ◽  
Empirical Studies ◽  
Family Members ◽  
Family Businesses ◽  
Board Members ◽  
Careful Selection ◽  
Business Week

The debate over the usefulness of outside board members in family businesses goes on. Two of the three empirical studies on this issue tend to disagree on their value. Using a sample of 262 family business firms, drawn from the Business Week Newsletter for Family-Owned Businesses, this study surveyed CEOs to learn of their attitudes toward inside and outside board members. The findings strongly support the inclusion of outsiders and suggest that the more outside board members the better and the more inside family members the worse, but only where CEO desire, careful selection, and shared expectations are part of that outsider membership.

Family succession, professionalization and internationalization: a study of Brazilian family businesses

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Augusto Dalmoro Costa ◽  
Aurora Carneiro Zen ◽  
Everson dos Santos Spindler
Keyword(s):  
Family Business ◽  
Family Members ◽  
Secondary Data ◽  
Family Businesses ◽  
Three Dimensions ◽  
Content Type ◽  
The Family ◽  
Two Generations ◽  
Internationalization Strategies ◽  
The Relationship

PurposeThe purpose of this paper is to investigate the relationship between family succession, professionalization and internationalization in family businesses within the Brazilian context.Design/methodology/approachThe paper presents a multiple-case study method with three Brazilian family businesses that have at least two generations of the owning family involved in the business and an international presence of at least three years. In-depth interviews and secondary data were undertaken with family and non-family members of each case.FindingsThe authors' results show that a family business can boost its internationalization by introducing both succession planning and professionalization on international activities. As family members tend to be more risk-averse and focused on keeping the family business within the family, professionalization is a way of improving the firm's ability to expand internationally. This process tends to lead to lower performance by the firm for the first few months or the first year after the investment, but afterward, international performance tends to grow exponentially.Originality/valueOnly a few studies have been concerned on the relationship of these three dimensions. Thus, the research takes into account that professionalization and succession lead family businesses to improve their internationalization strategies.

scholarly journals Family Governance Mechanisms in Moroccan Family Businesses: An Exploratory Study

2020 ◽  
Vol 15 (8) ◽  
pp. 101
Author(s):  
Hiba Birgach ◽  
Taib Berrada El Azizi ◽  
Badr Habba
Keyword(s):  
Family Firms ◽  
Family Members ◽  
Specific Area ◽  
Family Businesses ◽  
Governance Mechanisms ◽  
Structured Interviews ◽  
Informal Governance ◽  
Face To Face ◽  
Family Meetings ◽  
Moroccan Family

Purpose - Despite the importance attached to the governance of family businesses, few studies have focused on the importance of family business governance in the Moroccan context. This article provides some specificities of family firms and an overview of main governance mechanisms identified in the literature while presenting the main contributions of agency and stewardship theories. We introduce a governance approach centered on the issue of strengthening family ties and increasing the commitment of family members to the firm. The purpose of this paper is to identify the governance mechanisms adopted by CEOs of Moroccan family businesses of the second generation. Method - the authors used a qualitative method, using face to face semi-structured interviews among ten CEOs of family businesses in Morocco. Through the analysis of verbatim responses of Moroccan CEOs, we were able to identify some of the governance mechanisms they adopt to ensure a certain continuity of their business. Findings-The results suggest that most of the Moroccan managers opt for an informal and unwritten system of governance. According to them, the important thing is to share values and vision while maintaining communication. Even family meetings remain informal, the crucial thing is to preserve family solidarity, as far as the system of governance is known by all the members. We have identified three informal governance mechanisms, family meetings, task management, and sharing a family vision. The results have also shown some of the sources of conflicts among family members. Practical implications – This paper helps to raise awareness among Moroccan leaders on the importance of governance. Whether formal or informal, it is essential to have common rules shared by family members, which will enable the firm to last over time. Originality - This paper contributes to research on family businesses by exploring a different context especially in terms of culture and country values. Our paper has the originality to focus on a specific area of investigation, namely the Moroccan context, where the management model of family businesses is different from anterior contributions.

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