FAMILY BUSINESS

I took the opportunity this week to learn about family business and below were some of the information gathered from the little research I made from Robert Kleiman and Eileen Peacock. “Family businesses have to contend with several issues in addition to standard business concerns including generational disputes, sibling rivalries, and succession issues. The same characteristics which are sources of strength for family firms (e.g., long-term commitment, patriarchal leadership) can also be sources of concern, particularly during leadership transitions. The interplay between the family and the business may become critical in these situations. Conditions that may exacerbate problems include the existence of role ambiguity, communication difficulties among family member, and business decisions which negatively affect families. Succession planning entails the transfer of assets, capital, contacts, power, skills, and authority from one generation to the next in a family business. Although this process is essential to the continuity and economic well-being of both the company and the family, succession in family business is problematic. Ward (1987) has estimated that only 3O0% of family firms make it to the third generation, and only 15% to the fourth. As larger numbers of family-held companies change hands from one generation to the next, more and more family legacies are lost due to poorly planned transitions.