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Growing the Family Business: Special Challenges and Best Practices
- Family Business Review
, 1997
"... Most family businesses simply don’t grow. This paper explores the reasons for and theories behind business stagnation and proposes a set of “best practices” that can revitalize a firm and enhance its performance. According to popular perception, family-owned businesses don’t grow. No less an expert ..."
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Most family businesses simply don’t grow. This paper explores the reasons for and theories behind business stagnation and proposes a set of “best practices” that can revitalize a firm and enhance its performance. According to popular perception, family-owned businesses don’t grow. No less an expert than Leon Danco of the Arthur Andersen Center for Family Business, the founding father of the field of family business, supports this no-tion. He said that family businesses fail because they allow themselves to be destroyed, slowly but surely, by the action—or more accurately, inaction—of their owner-managers. The businesses fail because, more often than not, these people never make the decisions needed to ensure the vitality of their compa-nies in an ever-changing, even more complex world (Danco, 1980). Contrary to popular perception, however, family-owned businesses can grow. Although they face several inherent challenges, family business can ex-pand by following some simple, yet critical, steps. This paper examines the special challenges to growing a family firm and then proposes a growth model for overcoming them. It concludes with a de-tailed review of the management best practices that can enable family firms to implement the model daily while ensuring long-term growth and prosperity. Lack of Growth: Folklore and Fact The notion that family-owned businesses do not grow is supported by folklore as well as fact. The adage “from shirtsleeves to shirtsleeves in three genera-tions ” expresses the widespread perception that family firms do not survive over the long term. As for the facts, a study of the fastest growing companies in the United States by the public accounting firm Coopers & Lybrand (Jones, Cohen, and Coppola, 1988) found that only 1 % were firms run by family successors to founders, whereas 80 % were led by their entrepreneurial founders. In a 1995 MassMutual Life Insurance survey of more than 1,000 family-business own-ers, growth was ranked sixth among seven possible business goals, with much higher priority placed on increasing profitability, reducing debt, and increas-
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"... The focus of this paper is on the interface and conflicts between work and family lives of business owners. The paper is a sequel to an ..."
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The focus of this paper is on the interface and conflicts between work and family lives of business owners. The paper is a sequel to an
Recommended Citation
, 2011
"... Commitment human resource systems (CHRS) are used to elicit an employee‘s long-term commitment to the firm, and research has shown that CHRS are positively associated with firm performance. Yet, firms appear reluctant to use these HR systems. Large shareholders such as institutional investors and fo ..."
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Commitment human resource systems (CHRS) are used to elicit an employee‘s long-term commitment to the firm, and research has shown that CHRS are positively associated with firm performance. Yet, firms appear reluctant to use these HR systems. Large shareholders such as institutional investors and founding family owners have been found to influence the strategic decision making of the firm, yet they have been largely absent from the strategic human resource management literature. This is unfortunate given the strong influence that large shareholders can exert on firms. Thus, this study examines the relationship between large shareholders such as institutional investors and founding family owners and CHRS. Overall, the findings indicate that founding family owners and transient institutional investors tend to influence the firm‘s propensity to use CHRS. Specifically, founding family ownership stake is positively associated with the use of high performance HR practices; whereas, the relationship between founding family ownership stake and employee involvement HR practices is positive up to the founding family owning 11.22 percent of the total common shares outstanding. In addition,
A BAYESIAN ANALYSIS ∗
"... School (European Family Business Center), the 7 th annual ifera conference, Technische Universität München and Ludwig-Maximilians-Universität München (TIME Kolloquium, Seminar für Empirische ..."
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School (European Family Business Center), the 7 th annual ifera conference, Technische Universität München and Ludwig-Maximilians-Universität München (TIME Kolloquium, Seminar für Empirische
FAMILY MANAGEMENT, FAMILY OWNERSHIP AND DOWNSIZING: EVIDENCE FROM S&P 500 FIRMS
"... Little is known about the relationship between family firms and their employees. This paper aims to close this gap. We distinguish between family management and family ownership as two dimensions of family firms and analyze their respective influence on downsizing. Our findings show that family mana ..."
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Little is known about the relationship between family firms and their employees. This paper aims to close this gap. We distinguish between family management and family ownership as two dimensions of family firms and analyze their respective influence on downsizing. Our findings show that family management decreases the likelihood of downsizing, whereas the extent of family ownership decreases the likelihood of downsizing only with regard to deep job cuts (above 6%). We conclude that family managers have a strong long-term perspective, which is in line with both agency and stewardship theory. Yet, the idea that reputation concerns lead family owners to shy away from downsizing is only partially supported.
A BAYESIAN ANALYSIS
"... Die ZBW räumt Ihnen als Nutzerin/Nutzer das unentgeltliche, räumlich unbeschränkte und zeitlich auf die Dauer des Schutzrechts beschränkte einfache Recht ein, das ausgewählte Werk im Rahmen der unter ..."
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Die ZBW räumt Ihnen als Nutzerin/Nutzer das unentgeltliche, räumlich unbeschränkte und zeitlich auf die Dauer des Schutzrechts beschränkte einfache Recht ein, das ausgewählte Werk im Rahmen der unter
