Family Report Introduction
Small businesses are an important and growing driver of US economic growth and dynamism. They employ over half of Americas private sector workers, produce over half of America s non-farm private GDP, and create roughly 75% of new private sector jobs. The next decade will see the growth of small business continue, and the social and economic impacts of small business increase (Anonymous, 2012).
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 grounds of initially developed rules to run the business successfully and not bring any harm to the family ties.
The advantages of family businesses
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 capable to introduce long term stability on the grounds 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.
Another notable advantage of family owned businesses is the ability to fulfil each other’s “vision” competencies with “value” competencies. This means for example, that if one of the family members is proficient in some technology, he might at the same time be absolutely not aware of the benefits that the company might reap from integrating the technology in the business. Interestingly this technical ability competence was not necessarily something they themselves displayed, but in many cases it was a skill they drew from their personal (often family) contact network (McGowan, Pauric, et.al, 2001).
Another good advantage of family-owned enterprises is the ability to attract and retain customer base because the tradition, hard work and most importantly, craftsmanship is conveyed to the customer. A part of the multinational companies like Mars, or Nike is attributable to the family appeal.
Disadvantages of family businesses
However, together with advantages family business management faces some problems that are rarely encountered by companies that …