Family Business Report
A family business is a unique method of running a company. It might involve all members of the family or only some, at the same time introducing a range of business, managerial, social, and family related pros and cons to the business (Hess. 2012). A careful management strategy is required to create a balance on the basis of initially developed rules to run the business successfully and not bring any harm to the family ties.
Loyalty is one of the most important advantages of running a family business. Theoretically, loyalty creates favorable grounds for development of family business. The reason is that members of the family form a very close foundation. Consequently, they will have a greater dedication to their business in constant to companies that are not launched on a family base (Meyers, 2008; Hess, 2012). There is also a certain intimacy among the main stakeholders in the case of family business development, which with no doubts facilitates development of a well-managed support system. The last one, if introduced and managed appropriately, is able to introduce long term stability on the basis of commonly shared values.
Flexibility is one more advantage that is exercised by owners of family businesses. The research demonstrates that families are more understanding when it comes to shift in schedules, wrong decisions, or mistakes with comparison to non -family businesses. A range of financial benefits are also available for family companies as the income is not divided, but it is commonly managed for the wealth of the organization (Meyers, 2008; Hess, 2012). In such case the family is likely to provide each other with support for the sake of additional investment.
However, together with advantages family business management faces some problems that are rarely encountered by companies that do not have the family basis. For example, family members, even not having the necessary skills, might be promoted to a higher position only due to their relation to the owners of the company. Such approach is not only unfair and might lead to discrimination of other workers, but it is also harmful for the company (Meyers, 2008; Hess, 2012). The reason is that low qualified staff is not likely to perform the duties in an effective way. This, without any doubts, harms effectiveness, productivity, development, and income of the company.
Moreover, working with the family is especially challengeous when the time of conflicts comes. The situation is made more complicated due to family relationship and priorities of people (Scott, Wilson, 1998; Hess, 2012). Usually people do not focus on running business, but are more centered on family relationship. Such approach is not effective and it might bring a serious harm to the whole business.
Succession is also problematic in family business. The issues usually arise when points of view order and younger generations do not coincide. The older generation is not likely to accept innovative approaches of the younger generation. They sometimes find it not reasonable to use innovations to …
