So far we have concentrated our learning about managerial and related lessons FOR FBs.

Some of these inputs have come from other well established field of management thinking

….the Family Generational/Succession Life-Cycle for example, and

….some of the models drawn upon from ‘Strategy’ thinking.

Have a read of this article and then contribute to the idea that:

“although FB as a field of study and formal practice is in its embryonic phase, FBs have many lessons to teach other types of businesses and inform ‘received wisdoms’ in mainstream business school thought.”

The article provides one with many useful insights which make one realize that FBs have a lot to contribute to the mainstream business school thought:

1) long-term strategy- widely held public companies see a dramatic rise in CEO turnover, this is often because there is no single institution guding them to focus on the long term strategy even though short term turnover may suffer, where the instituition will back them up. FB like ayala in the article on the other hand structure partnerships that can agree on long-term vision and provide stability at the board level.

2) Market volatility: FB with controlling shares have better chances of riding out a financial crisis. The article provides us with an example of the Asian financial crisis, where Globe, The FB was able to insulate the company from the volatility of the markets, due to a stable and supportive board and put I equity for some aggressive expansion plans.

3) Foreign-debt pressures- the article provides an example of Ayala, the FB based in the Philippines which had accumulated debt of nearly $1 billion. Even thought he company’s revenues were mostly in pesos, it went offshore for funds. Had the business been under pressure to deliver on quarterly earnings targets like public companies, it might’ve hesitated on its leveraging decisions, and great opportunities for value creation wouldve slipped by.

e.g. this Interview argues the case that the conglomerate form of FB is highly valuable, relevant and robust despite most economic, investor and business school thinking suggesting that the conglomerate structure of business strategy (ie unrelated, diversified firms) destroy value, dislocate resources and diversify risks inefficiently.

What other examples can you find of lessons FROM FBs TO other types of organizations AND theory/thinking?

Edit and post here…use your inline remarks box to give opinion and the main body to provide linked resources and references.

According to this article (http://www.bi-me.com/main.php?id=40748&t=1&c=34&cg=4) ”Some 95% of businesses in Asia, the Middle East, Italy and Spain are family-controlled. So are over 80% of companies in France and Germany, and between 60%-70% of those in the US.”

For this reason, research about family businesses is increasing rapidly. Lessons that can be learned, always according to the article, are:

- Long-term prespective (as shaloo pointed out)

- Value driven decision making

Another important characteristic of family firms is stewardship, which comes as a natural thing for family firms.

Source: Shellie Karabell (2009) What makes family businesses unique, and what can we learn from them?

________________________________________________________________________________________________

10 Lessons Learned in 22 Years of Bootstrapping

The author, who runs a family owned business, shares what he learned from his business. In the following way.

1) We made lots of mistakes – View mistakes as learning experiences, Always document mistakes so that they can be referred to in the future.

2) We built it around ourselves – Build business around values capabilities etc.

3) We offered something other people wanted – Don’t follow your passion unless your passion produced something other people will pay for.

4) We planned – Keep a developing business plan, don’t set everything in stone

5) We spent our own money. We never spent money we didn’t have – Don’t take on debt unless you need it cash injection

6) We used service revenues to invest in products – Money should be kept revolving and reinvested into other offerings or businesses

7) We minded cash flow first, before growth – We rejected ways we might have spurred growth by spending first to generate sales later

We put growth ahead of profits – Traded profits for growth

9) We hired people slowly and carefully

10) We did for employees’ families what we did for ourselves

Berry, T., 2009. 10 lessons learned in 22 years of bootstrapping. [Online] Available at: http://smallbiztrends.com/2009/06/10-lessons-learned-in-22-years-of-bootstrapping.html [Accessed 5 April 2010]

Contributing to the main idea of this post, I would like to say that, in my opinion, the link between family business and theories related to other types of business is the following: lessons from mainstreem business studies could be implemented in family business, but not vice versa. Family business has its very specific implications. these lessons often do not fit other types of business.

As example I can provide the article “Family Business: Lessons from 100-Year-Old Family Enterprises” written by Arnold Aitken and Stephen Bray. http://thefamilybusinessschool.com/node/75

Lessons pointed out by this article are the following:

1. Remain small: small family businesses have a greater chance of passing the test of time than large ones. Of the

2. Avoid going public
Offering the company’s stocks to the public may be a tried and tested way of raising capital, but it also tempts takeover artists into pouncing on the business. On the other hand, keeping ownership of the company strictly within the confines of the family can help the family business last for over 100 years.

3. Stay away from major cities
Of the 102 oldest family businesses, only 27 companies were located in large metropolitan areas that had at least one major professional sports team. That’s just a little over 26%. Meanwhile, of the 50 oldest family businesses, only seven were based in major urban areas (14%).

4. Let a family member run the business
In general, family businesses that had a family member at the helm outlasted those businesses that were run by non-family members.

All these recommendations are based on successful family business experience, but, as you can see, they are not appropriate for other types of bysiness.

In the past, especially in India, due to the orthodox nature of the indian society as a whole, womens role in family owned businesses had always been limited. However, in 2005, that all changed.

The Hindu Succession (Amendment) Act of 2005 removed gender discrimination with regard to inheritance in Hindu joint families. Previously, only the male line, to great-grandson, had inheritance rights. The trend of daughters inheriting family businesses picked up steam after 2005 when the HUF succession norms were amended and girls were allowed to inherit equal shares in family businesses.

The change in regulation, along with the fact that women were receiving more and more education meant that the CEO’s of the family businesses had to start taking them more seriously and allowing them the right to have an input into the business.

However, the change in regulation is not the only factor that has resulted in the increase in women in family businesses,  Globalization and Liberalization have had a very large part to play. The westernization of India means that more and more people are fighting for the same freedom that western women receive.

There is also greater recognition that women can not only do just as well as men, but can also do better. This is connected with the fact that Indian families are increasingly becoming smaller and have found a new found respect for daughters.

To access the full article

Check out this argument regarding the evidence on the factors influencing the decision as to whether adult children, like ourselves, should decide to launch into a new business venture with our FB parents.

1. Search out other positions and arguments regarding the decision to launch into a new venture with parents, provide resource links for all of us to learn from AND

2. ALSO look at previous work into the factors influencing adult childrens’ decisions to join the FB regardless of a new venture.

This latter decision is referenced in the argument I’ve linked here.

Use this post to discuss your experiences as FB inheritors or FM members to reflect on the factors presented in these papers.

For too many people, staying in the family business is the easy wayto worm out of the difficulties of adult life: finding a place where you fit in, discovering what you love to do and living with the fear of rejection.

Especially today, with a dried-up job market, the family business is a way of avoiding a difficult job hunt.

I worked in a family business – a shoes stores and factory just for my holiday. I started when I was 12, selecting new collections for teenagers, and by the end of college I was a member of the company having a power to influence them on their choices because I could see the needs of their target. After so many years, I was a member of the designers in the factory but I wanted to do something else. I just wasn’t sure what and I decided to challenge myself and avoid the easy way of life.

After living in many countries and having enough experience, I am certain that there are three things you should do before you decide to settle down with your family business for the long haul:

1. Figure out your dream job.

Don’t worry about being realistic. Rock star, movie producer, politician: everything is fair game. Then decide if you want to go down the path to fulfill that dream. Don’t feel bad if the dream is impossible. Many dreams are not realistic, but they contain gems of truth. For example, someone who dreams of being a rock star probably wants to be creative at work. The exercise of dreaming helps you to figure out your core needs. Once you know these needs, take an honest look at the family business. If you cannot fulfill your core needs in the family business, you should leave.

2. Get a job.

Even if you are sure you’ll stay in the family business, get a job outside of the business. Job hunting is awful, which is why you should do it. The process is humbling and scary because on one level, you are asking someone to pay you to work so you can eat; at another level, job hunting requires understanding yourself well enough to talk about your dreams, your strengths and your weaknesses. You need to experience what it is like to ask for a day off from someone who doesn’t love you. Working for someone outside your family helps you to interact effectively with all people outside your family. This process is a rite of passage, and if you don’t go through it, you risk stunted growth

3. Take a large risk.

If the entrepreneur is on the high end of the risk-taking scale, the kid who stays in the family business is on the low end. At the end of life, the thing people most often say they regret is not taking enough risks. Make sure that staying in the family business will not make you wish later that you were a risk taker. If you take a large risk early on, then you can be more certain that you are not staying in the family business because you are scared of taking risks. Risks are different for everyone. A mountain for one person is a molehill for another. Find something that scares you and do it.

Adult life is about learning what matters to you and creating a life that reflects your values. To know what’s important, though, you need to see the world.

Take time to establish yourself independently from your family, at least for a while, so you can see yourself more clearly. Whether you stay in the family business or go somewhere else, you’ll be a happier person for making the decision honestly.

I have read an article in Business Week called: Should you Join the Family Business? written by James Olan Hutcheson

http://www.businessweek.com/smallbiz/content/sep2006/sb20060928_575514.htm

The author firstly advises that there is never a right or wrong decision but he does recommend that if one does decide to join one´s parents business one should have:

a) First had work experience (non family related) because this helps build a business judgment and allows one to bring some new perspective and new ideas to our parents’ company

b) Have undergone several work interviews as one day one might be required to interview and hire employees for the family firm. This helps us become more sensitive and able have a better sense when undertaking interviews ourselves.

If having the previous two experiences and deciding to join the Family Business Hutcheson recommends:

“1. Make sure that you have a real desire and passion for the business. Do you like what the company sells? Are you proud of the reputation? Do not join the family business just because your mother or father told you to.

2. Fill out a job application and go through the interview process. Starting work should be a deliberate step and not your father saying, “Come on in tomorrow and start.”

3. Make sure your father or someone else in a senior management position gives you a list of your specific job responsibilities and the criteria by which your performance will be measured.

4. Start your career by reporting to someone other than a family member, if possible.

5. At all costs, avoid taking advantage of your family relationship as it may relate to pay and benefits.” (Hutcheson, 2006)

I also tend to believe that whilst one is younger one tends to seek a path of one’s own. At least in my case I felt I I should not work for my parents after I finished my undergraduate, hence I moved to Caracas, Venezuela´s capital and achieved several years of work experience.

Due to family circumstances I had to leave my job in Caracas in year 2004 and take care of my father´s business which I knew well as I worked in it whilst undergoing my undergraduate. I found that I could see and understand things in a different way, my approach was different and also my passion for it had increased.

If I do go back and live in the same city my parents live I would certainly engage in their businesses as I feel not only passion for my parents but also for what they do and would try to bring in “new blood” into their businesses and profoundly enjoy new work experiences along with them.

The adult child’s decision as to whether or not to join his or her parents to start the business is certainly one of the milestone events.

1) Birley (1991) identified factors such as pressure from parents, interest in the managing business, certain industry characteristics and demographic factors as predictors of adult child’s decision to join the existing family business.

2) The Starvou and Swiercz (1998) model identifies certain family factors, bsuienss factors, personal factors and market factors (like the ones Haithem already mentioned).

A study conducted to determine the factors which influence an adult child’s decision to start a new family venture, came up with the following results:

1) The decision of an adult child to join a new family business with his or her parents will depend on the relative roles of the parties in the new venture, but not which the parent was involved in.

2) The role of the adult child in the new venture is a bigger factor in the decision to enter the business than the opportunity to be involved with a specific parent or both parents without consideration of relative hierarchical roles in the new venture.

3) Hence in summary the adult child’s decision to join a new venture with his or her parents will primarily depend on whether the relative roles the child and parents will occupy in the management of the venture will be substantially equal.

This article is called:

‘Entrepreneurial opportunity exploitation and the family: relationship-based factors that effect the adult child’s decision to jointly participate with parents in anew venture’, (Leaptrott, McDonald, M., 2008)

It can be viewed on:

http://findarticles.com/p/articles/mi_m1TOL/is_13/ai_n32103088/pg_8/?tag=content;col1

_________________________________________________________________________________________________

Most and Least Important Reasons for Which Offspring Choose or Do Not Chose Employment in the Family Business

The above table visually represents the reasons found by Stavrou (1999) that offspring give to join or not join the family business. The information is based on the findings of her study titled Succession in the family business: Exploring the effects of demographic factors on offspring intensions to join and take over the business. The above reasons were all picked by offspring. The data analysis and more information can be found in her study here

Stavrou, Eleni T., 1999. Succession in Family Businesses: Exploring the Effects of Demographic Factors on Offspring Intentions to Join and Take over the Business. Journal of Small Business Management, Jul99, 37, pp. 43-61.

Fleming, Q.J., 2000. Excerpt from keep the family baggage out of the family business. Businessweek. [Online] 18 February. Available at: http://www.businessweek.com/smallbiz/0002/bk000218.htm. [Accessed 5 April 2010]

in china, a part of the second generation of family business did not follow their parents way to join the FM immediately. they choose launch a new venture by their own. However, a lot of them can get the fund from their parents.

according the chinese academic article” the research of the second generation of chinese family business”

it mention that the start-up fund of second generation is occuied 98% total.

In the side of parents, chinese father and mother does not their child involed FM earlier, because of the one child policy in china, in general, parents perfer do all the work by themselves, they always coddle their child.

on the other hand, child do not join the FM earlier, because they need more personal life, they do not want work under their their parents. so they perfer launch a venture by themselves.

http://www.gmw.cn/content/2010-02/09/content_1053080.htm

Being the eldest son in my family I found this McKinsey article totally offensive and true.

Source: Dorgan, Dowdy, and Thomas (2006), ‘Who should and who should not run a Family Business?’, McKinsey Quarterly; 2006, Issue 3, p13-15

Not only does it establish a case for outside management and leadership of the FB, it also suggests that I am totally inadequate when it comes to taking over from my parents!!!!!

What do you think?

Ladies, have a field day.

Gents, especially, the eldest sons amongst you, start eating humble pie….businesses suffer under our leadership according to this evidence.

 the decision of an adult child to join the family business impacts the parents relationships with their daughters and sons.

this article is very interesting as it points out that father-son relationships generally perceived to be more profitable than a father-daughter family business, is actually not the case. this is because:

1)      while men in theory think ownership and control are best left to them, when women are involved in decision making and control, it might actually be greater benefit.

2)      By including a female member in the family in the management and ownership of family firms, most employees feel more included, collaborate better, and to some extent, experience greater loyalty.

3)      Often sons are forced to join the business and not given the freedom to dispute their involvement, women are given more freedom and option to choose. Hence when a female family member, like the daughter decides on joining the family business, there is far lesser degree of hostility and resentment within and among other family memebers.

this article is called ‘when adult children join the family business’ by Christine Cadina, 2007.

can be accessed here:

 http://www.associatedcontent.com/article/434691/when_adult_children_join_the_family_pg2.html?cat=25

The two articles used were Kongo Glumi and Meritocracy

Please use inline remarks for opinions and credible argument, data, examples and sources for your position about who should/shouldn’t run FBs.

Hyperlink back to previous articles and posts if they serve your argument better.

_________________________________________________________________________________________________

Examples of a billion dollar firms being handed down to eldest son:

Formosa Group Taiwan

Common guys, add on some more example!!!

[ Kuratko et al., 1993. Family Business Succession in Korean and U.S. Firms. Journal of Small Business Management, Apr93, Vol. 31 Issue 2, p132-136, 5p ]

Hi everyone,This week the Green Team’s Skit on Women In Family Business.

http://www.slideshare.net/guestd224927/women-in-business-presentation-green-team-w-11-3465746

PRESENTATION KEY POINTS

Women & Men Entrepreneurs in Family Business by Lall. M and Sahai. S, 2001.

· Differences between man and women entrepreneurs in skills, business goals, management styles, business characteristics and growth rates

· Man and women approach business in a different way

· Women in business have lower self-steam and less entrepreneurial intensity

· Women entrepreneurs experience:

o Gender discrimination

o Limited access to capital

o Difficulty in competing for government contracts

o Lack of information

o Need to work harder to prove their competence

“Women as managers in family firms by Cromie and O’Sullivan”

· Women in business face many problems:

o Hostile environments: dominant masculine culture make women feel excluded

o Organizations are essentially patriarchal

· Women have adopted some strategies to overcome difficulties

o Training opportunities in women-only settings

o Seek mentors to acquire knowledge and political skill and build networks

o Supporting programmes of action such as “Opportunity 2000)

o Promote notion that “female traits” and values such as sensitivity and power equalization are what modern organizations need.

o Delay marriage and having children

· In family businesses:

o Family members have advantage versus non family members to expand their careers and this can be applied to women also

o Access to owners and senior managers provides easy mentoring, training and network opportunities

o Generally, earning and status will depend on the role executed and not on gender

o Women in family firms usually do one of the following

§ Put career first

§ Combine family and career roles

§ Limit attachment to firm and commit to family matters.

MICA REPORT GREEN TEAM

Here is the report on Tai Po Fruits:

http://www.slideshare.net/lelecosti/mica-green-team-report

http://www.slideshare.net/guest0dd42ee/women-in-family-businessppt-3447046

 Hello everyone!

Here is an old skit about the family business in Argentina… Enjoy!!

All the information is based on:

Roberto Kertesz & Clara I. Atalaya (1999) Family business in Argentina: Current Issues, Community, Work & Family, Vol.2, No.1, 1999

We created a poem about it:

The let’s look at an Argentinean family firm

Which was run by the Gomez for four terms,

This is a tale

About four generations of males

In which the last one fails.

And we can tell

The Tobacco empire began with Manuel.

Jose came next,

in an period where people would rather smoke than rest.

Osvaldo found the perfect expansion solution

By opening 300 more shops for distribution.

Alas the family business was nearing its end

But they brought Gonzalo as the CEO who tried his best to mend.

The last hopes of the company were Fernando and Alberto,

But when it came to the business, they both lacked sufficient momento.

Moreover you can find slides about it here:

 http://www.slideshare.net/lelecosti/famiyl-business-gomez-3444844

Dear all,

I am including here the main learning key points that we have from the articles we used to prepare our skits and presentation today.

Here is the link to our presentation that supported our skit:

http://www.slideshare.net/guestd67dcc/women-in-business-presentation-green-team-w-11

ARTICLE:  Lall, M. and Sahai, S. (year unknown) Women in Family Business. Retrieved from: www.isb.edu/FamilyBusinessConference/WomeninFamilyBusiness.pdf

· Differences between man and women entrepreneurs in skills, business goals, management styles, business characteristics and growth rates

· Man and women approach business in a different way

· Women in business have lower self-steam and less entrepreneurial intensity

· Women entrepreneurs experience:

o Gender discrimination

o Limited access to capital

o Difficulty in competing for government contracts

o Lack of information

o Need to work harder to prove their competence

ARTICLE: Cromie, S., O’Sullivan, S. (1999) Women as managers in family firms. Article retrieved from Emerald

· Women in business face many problems:

o Hostile environments: dominant masculine culture make women feel excluded

o Organizations are essentially patriarchal

· Women have adopted some strategies to overcome difficulties

o Training opportunities in women-only settings

o Seek mentors to acquire knowledge and political skill and build networks

o Supporting programmes of action such as “Opportunity 2000”

o Promote notion that “female traits” and values such as sensitivity and power equalization are what modern organizations need.

o Delay marriage and having children

· In family businesses:

o Family members have advantage versus non family members to expand their careers and this can be applied to women also

o Access to owners and senior managers provides easy mentoring, training and network opportunities

o Generally, earning and status will depend on the role executed and not on gender

o Women in family firms usually do one of the following

§ Put career first

§ Combine family and career roles

§ Limit attachment to firm and commit to family matters.

MORE INFO about the OPPORTUNITY 2000 initiative

A business-led initiative launched in 1991 which aims “to increase the quality and quantity of women’s employment opportunities in both private and public sector organizations”. By the end of 1995 there were nearly 300 organizations in membership, these are predominantly large organizations who between them employ over a quarter of the workforce. Organizations which join Opportunity 2000 (and pay a fee to do so) undertake to set goals for improving women’s representation and to monitor progress towards those goals. Goals may be quantitative targets or merely statements of general intent. Members are not monitored against any required standard of achievement. The organization regularly surveys participating organizations and reports on policies and practices. It seeks to make the “business case” for being an equal opportunity employer , demonstrating how equal opportunities can benefit the business and thus encourage voluntary action. In 1995 a similar campaign was launched to boost the economic participation of Britain’s ethnic minority population, called Race for Opportunity.

Source: Eurofound (2009). Information retrieved from the website: http://www.eurofound.europa.eu/emire/UNITED%20KINGDOM/OPPORTUNITY2000-EN.htm on March 16 2010.

This is what i found in this article:

“Healthy family businesses:

• Clearly separate management and ownership
• Have a clearly defined vision which the whole family buys into
• Speak with one voice: are inclusive
• Live their values as well as espouse them
• Take time to understand the family’s concerns and the needs of individuals
• Have a common language of trust inside and outside the family business
• Have defined roles and responsibilities for family members, shareholders, and employees
• Keep family meetings outside the boardroom and business meetings away from the dinner table
• Can manage and resolve the differences that arise
• Understand their children’s motivations and give their children freedom of choice
• Have high staff loyalty and low staff turnover
• Consider appointing non-executive directors to help bring objectivity
• Don’t forget the family business members who aren’t involved in the business”

Source: http://www.coutts.com/familybusiness/are-you-a-family-business/characteristics.asp

Hey group

Shaan has uploaded very interesting article about family business.

I decided to put you in a brief picture of russian family business.

For a long time in Russia there are family traditions thanks to which, secrets of the professional skill, the capital accumulated in the years and life experience are from generation to generation transmitted. Trust, respect and pride of the family, - here the basic signs of the Russian family business which, together with development of market relations, left on a new degree of quality in our country.

At the heart of family business lies so-called fiduciary, - personally-confidential relations. From the point of view of the right fiduciary contracts it is much more reliable and more progressive than treaty obligations. In relations such it is not necessary to append the signature, to make promises, to collect the information on the partner. Interaction of the parties is under construction on trust, is thus based not on risk, as for example obligations between the founder and the confidential managing director, and on parent communications. We care of the close people: we show attention, we give gifts, we trust the thoughts and ideas. The same processes occur and in family business when the son, the wife or the brother in combination are business partners. Here where that constructibility in the decision of every possible problems and business matters is observed. The parties in such relations absolutely accurately represent for themselves an ultimate goal, - moral and material welfare of a family. Mutual understanding level in such families exists in the order a sign language and sights.

Now family business in Russia endures new boom of development. It is connected by that the majority of so-called family companies, i.e. the legal bodies as which holders relatives act, are subjects of small business. A small-scale business as world experience testifies, plays a special role in market economy development. Formation of small business in modern Russia is a necessary condition of the decision of a complex of the most complicated social and economic problems, involving in enterprise sector of a significant part of the vacant population, reorientation credit and a fiscal policyy on stimulation of development of production, transition to innovative type of economic development.

That fact testifies to significant potential of a small-scale business that for years of reforms - from the end 80 to the middle of 90th of XX century is there was the most fast-growing sector of economic activity, and its formation occurred in the most complicated conditions. Efficiency of small enterprises is advanced by a number of their advantages in comparison with major concerns:

The small enterprise ensures market demands in those goods and services which averages and large firms to make and render is inexpedient for economic and other reasons, for example because of the limited requirements of the local markets;
Higher capital turnover;
Small enterprises often prove as innovators.

The most typical legal form of organisation of large family business in Russia is the joint-stock company. Thus, under certificate McKinsey, in the West joint-stock companies have passed through economic depression, wars and other crises, saving the family control over business. Therefore experience of such companies is of great value for the Russian family business which worries the first alternation of generations from the beginning of 90th years and for the first time has faced a problem of preservation of the control of a family over business.

First “surprise” expected “the family” companies in which the family had a controlling interest in the property, - their forecasts for long-term success have not justified. Already the second generation of a family following founders of firm which operated business thanks to the sharpness and enterprise, frequently has no these qualities and does not insist on independent management of the company. The majority of the circulation in our board behind reception of a professional legal aid occur during this moment when in the extended family there is a conflict of interests, struggle for influence and dividends, and also for a role of the company executive.

Practice shows that the majority of “family” disputes are allowed within the limits of conflict pretrial stage. Those personally-confidential relations thanks to which, it is possible to reach the general understanding of a situation and a finding of the mutually acceptable decision in this case affect. Moreover, some family companies independently could avoid a fate of similar disputes thanks to the initially competently constructed policy of management of firm. On the basis of the conducted consultations and conversations with chiefs of the Russian financially-stable legal companies, I have received general idea how business in such firms is organised. The strong government and strict hierarchy were a key to their survival and success: unwritten laws of conducting the businesses passing from generation to generation, and exact awareness that means the vested interest the company had great value. The property right - simultaneously blessing and a damnation - gives the chance to a family to destroy business the same as and to give it the accurate form and to enjoy profit. For this reason families- business owners have created systems which limit and counterbalances in the basic three measurements of family business: properties, the supervisory board and management.

The mess in oral and written arrangements - both official, and informal - concerning family business is usually observed:

As operating advice of the company and as it is selected is formed;

In what cases decision-making requires a consensus, special majority or interaction of shareholders;

What conditions, at which members of the family can (or cannot) to work in the given business; as shares can (or cannot) to sell inside and outside of the company;

Other elements of corporate and financial strategy.

Similar agreements on which working out one decade can leave not, help to avoid difficulties at transition of the power from one generation to other and form a basis for fulfilment of two main conditions of long-term success of family companies: professional management and continuous management of business of members of the family.

The organisation of holding structures with rather independent branches became the tendency of last time for the Russian family business. Last also can be in the property at the state though basically family holding companies completely supervise most important of affiliated firms. Saving the companies as private, the family avoids pressure from outside external share holders of the enterprise for fast and effective work. It allows the company to carry out diversification strategy for achievement of a sustained profit and a survival in the conditions of the changed market. Such approach does not play a role for the investor, but for families which assume to carry out the control throughout several generation, other party of a medal is visible also.« We wish to ensure a diversification in our business so that our shareholders should not withdraw money and could carry out a diversification independently », - one of chiefs of a family firm has told to me.

All this sort of companies see themselves as conglomerates, as the companies leading not one kind of business. But, in spite of the fact that some firms have a wide spectrum not connected among their businesses, nevertheless the majority of them are concentrated to four main spheres. All of them search for the compromise between business with high brave indicators and business which ensures more or less stable inflow of money resources. Many of them supplement a core business with a venture capital and a private property in which it is put from 10 to 20 % of their capital.

Possibility fast to react to possibilities which arise in a network of family business, is very important. 5 million in time invested a decade ago $ have come back to the companies fifty billions. Strategy consists in constantly to update the portfolio. To update so that the company could protect itself correctly made investments, smoothly redistributing means from stable sector to a beginner to develop. In the majority of family companies new possibilities are clear: transparent business has for them preference as such firms lead reserved investment policy. It distinguishes «family business» from the open companies which have access to the capital and in the mid-nineties frequently preferred growth to the detriment of to incomes.

Today the Russian family business taking a special niche on a competitive market, is attractive possibility to exist without re-structuring and expansion, and as a coordination of a financial policy with brave strategy. A reinvesting - unique possibility for expansion of family business which does not wish to manufacture new shares or to increase debts. For many families it means necessity not to spray and spend means, and to pay attention of the primary activity. The such enterprises are focused on special culture of business dealing and such quantity indicators as growth of the company and profit earning.

Family corporations, undoubtedly, bring also non-economic benefit: respected position in company, pride and feeling of an accessory to family traditions. Also it and possibility for one members of the family to work in business, and for others – to achieve the purposes with a support on this business. The majority of holders of family business try to transmit the business to children or relatives, trying to motivate in every possible way them for this purpose: hold family meetings, have together a rest, solve all questions of the company together in formal and informal conditions. They consider, what exactly at such meetings the young generation can understand importance of family business.

It is necessary as to notice that all organisation-legal forms of the Russian family business are attractive to diligent participants of a turn-over who are ready to lead entrepreneurial business, risking all property. That the given forms have received more a wide circulation granting is necessary for subjects of family business of certain privileges, in particular, in the field of tax and credit relations.

(Dont think you need reference as all the information is taken from russian sources)

The Danger of Doing Business in Russia

Russia’s ability to attract foreign investors is being compromised by a new problem: reiderstvo, or “raiding,” a term that describes the illegal tactics used by criminals to seize businesses and land their owners in jail.

Russian lawyer Sergei Magnitsky, imprisoned on tax evasion charges, told Russian Interior Ministry investigators that he was being denied medical care and subjected to “inhumane and humiliating conditions” in Moscow’s notorious Butyrkajail. The treatment, he said, resulted from his refusal to give false testimony against himself and others. A month later, Magnitsky, 37, was dead.

  You can find the article here http://www.syntone.ru/library/books/content/3095.html 

It’s in Russian, but I’ll write here the main ideas that are related to the topic.

Main characteristics distinguishing Russian family business from the world one:

• lack of family corporations and big family firms;
• existing family firms are comparatively young;
• family business is mainly focused on trade and service sectors;

History of family business in Russia:

The history of Russian family business starts from times of Kievan Russia. It’s related to the process of trade development.

First famous family dynasties of Russian entrepreneurs started to form in times of Ivan the Terrible.

New stage of family business development is related to the the reign of Peter the First, when there was a range of support programs for family business. Mainly, family enterprises were established in trade sector.

The year 1917 was fatal for Russian family business. Started revolution stopped its development more then for 70 years.

In later 80s some families managed to establish their small cooperatives and then start again their family business.

Check out this argument regarding the evidence on the factors influencing the decision as to whether adult children, like ourselves, should decide to launch into a new business venture with our FB parents.

1. Search out other positions and arguments regarding the decision to launch into a new venture with parents, provide resource links for all of us to learn from AND

2. ALSO look at previous work into the factors influencing adult childrens’ decisions to join the FB regardless of a new venture.

This latter decision is referenced in the argument I’ve linked here.

Use this post to discuss your experiences as FB inheritors or FM members to reflect on the factors presented in these papers.

For too many people, staying in the family business is the easy wayto worm out of the difficulties of adult life: finding a place where you fit in, discovering what you love to do and living with the fear of rejection.

Especially today, with a dried-up job market, the family business is a way of avoiding a difficult job hunt.

I worked in a family business – a shoes stores and factory just for my holiday. I started when I was 12, selecting new collections for teenagers, and by the end of college I was a member of the company having a power to influence them on their choices because I could see the needs of their target. After so many years, I was a member of the designers in the factory but I wanted to do something else. I just wasn’t sure what and I decided to challenge myself and avoid the easy way of life.

After living in many countries and having enough experience, I am certain that there are three things you should do before you decide to settle down with your family business for the long haul:

1. Figure out your dream job.

Don’t worry about being realistic. Rock star, movie producer, politician: everything is fair game. Then decide if you want to go down the path to fulfill that dream. Don’t feel bad if the dream is impossible. Many dreams are not realistic, but they contain gems of truth. For example, someone who dreams of being a rock star probably wants to be creative at work. The exercise of dreaming helps you to figure out your core needs. Once you know these needs, take an honest look at the family business. If you cannot fulfill your core needs in the family business, you should leave.

2. Get a job.

Even if you are sure you’ll stay in the family business, get a job outside of the business. Job hunting is awful, which is why you should do it. The process is humbling and scary because on one level, you are asking someone to pay you to work so you can eat; at another level, job hunting requires understanding yourself well enough to talk about your dreams, your strengths and your weaknesses. You need to experience what it is like to ask for a day off from someone who doesn’t love you. Working for someone outside your family helps you to interact effectively with all people outside your family. This process is a rite of passage, and if you don’t go through it, you risk stunted growth

3. Take a large risk.

If the entrepreneur is on the high end of the risk-taking scale, the kid who stays in the family business is on the low end. At the end of life, the thing people most often say they regret is not taking enough risks. Make sure that staying in the family business will not make you wish later that you were a risk taker. If you take a large risk early on, then you can be more certain that you are not staying in the family business because you are scared of taking risks. Risks are different for everyone. A mountain for one person is a molehill for another. Find something that scares you and do it.

Adult life is about learning what matters to you and creating a life that reflects your values. To know what’s important, though, you need to see the world.

Take time to establish yourself independently from your family, at least for a while, so you can see yourself more clearly. Whether you stay in the family business or go somewhere else, you’ll be a happier person for making the decision honestly.

I have read an article in Business Week called: Should you Join the Family Business? written by James Olan Hutcheson

http://www.businessweek.com/smallbiz/content/sep2006/sb20060928_575514.htm

The author firstly advises that there is never a right or wrong decision but he does recommend that if one does decide to join one´s parents business one should have:

a) First had work experience (non family related) because this helps build a business judgment and allows one to bring some new perspective and new ideas to our parents’ company

b) Have undergone several work interviews as one day one might be required to interview and hire employees for the family firm. This helps us become more sensitive and able have a better sense when undertaking interviews ourselves.

If having the previous two experiences and deciding to join the Family Business Hutcheson recommends:

“1. Make sure that you have a real desire and passion for the business. Do you like what the company sells? Are you proud of the reputation? Do not join the family business just because your mother or father told you to.

2. Fill out a job application and go through the interview process. Starting work should be a deliberate step and not your father saying, “Come on in tomorrow and start.”

3. Make sure your father or someone else in a senior management position gives you a list of your specific job responsibilities and the criteria by which your performance will be measured.

4. Start your career by reporting to someone other than a family member, if possible.

5. At all costs, avoid taking advantage of your family relationship as it may relate to pay and benefits.” (Hutcheson, 2006)

I also tend to believe that whilst one is younger one tends to seek a path of one’s own. At least in my case I felt I I should not work for my parents after I finished my undergraduate, hence I moved to Caracas, Venezuela´s capital and achieved several years of work experience.

Due to family circumstances I had to leave my job in Caracas in year 2004 and take care of my father´s business which I knew well as I worked in it whilst undergoing my undergraduate. I found that I could see and understand things in a different way, my approach was different and also my passion for it had increased.

If I do go back and live in the same city my parents live I would certainly engage in their businesses as I feel not only passion for my parents but also for what they do and would try to bring in “new blood” into their businesses and profoundly enjoy new work experiences along with them.

The adult child’s decision as to whether or not to join his or her parents to start the business is certainly one of the milestone events.

1) Birley (1991) identified factors such as pressure from parents, interest in the managing business, certain industry characteristics and demographic factors as predictors of adult child’s decision to join the existing family business.

2) The Starvou and Swiercz (1998) model identifies certain family factors, bsuienss factors, personal factors and market factors (like the ones Haithem already mentioned).

A study conducted to determine the factors which influence an adult child’s decision to start a new family venture, came up with the following results:

1) The decision of an adult child to join a new family business with his or her parents will depend on the relative roles of the parties in the new venture, but not which the parent was involved in.

2) The role of the adult child in the new venture is a bigger factor in the decision to enter the business than the opportunity to be involved with a specific parent or both parents without consideration of relative hierarchical roles in the new venture.

3) Hence in summary the adult child’s decision to join a new venture with his or her parents will primarily depend on whether the relative roles the child and parents will occupy in the management of the venture will be substantially equal.

This article is called:

‘Entrepreneurial opportunity exploitation and the family: relationship-based factors that effect the adult child’s decision to jointly participate with parents in anew venture’, (Leaptrott, McDonald, M., 2008)

It can be viewed on:

http://findarticles.com/p/articles/mi_m1TOL/is_13/ai_n32103088/pg_8/?tag=content;col1

_________________________________________________________________________________________________

Most and Least Important Reasons for Which Offspring Choose or Do Not Chose Employment in the Family Business

The above table visually represents the reasons found by Stavrou (1999) that offspring give to join or not join the family business. The information is based on the findings of her study titled Succession in the family business: Exploring the effects of demographic factors on offspring intensions to join and take over the business. The above reasons were all picked by offspring. The data analysis and more information can be found in her study here

Stavrou, Eleni T., 1999. Succession in Family Businesses: Exploring the Effects of Demographic Factors on Offspring Intentions to Join and Take over the Business. Journal of Small Business Management, Jul99, 37, pp. 43-61.

Fleming, Q.J., 2000. Excerpt from keep the family baggage out of the family business. Businessweek. [Online] 18 February. Available at: http://www.businessweek.com/smallbiz/0002/bk000218.htm. [Accessed 5 April 2010]

in china, a part of the second generation of family business did not follow their parents way to join the FM immediately. they choose launch a new venture by their own. However, a lot of them can get the fund from their parents.

according the chinese academic article” the research of the second generation of chinese family business”

it mention that the start-up fund of second generation is occuied 98% total.

In the side of parents, chinese father and mother does not their child involed FM earlier, because of the one child policy in china, in general, parents perfer do all the work by themselves, they always coddle their child.

on the other hand, child do not join the FM earlier, because they need more personal life, they do not want work under their their parents. so they perfer launch a venture by themselves.

http://www.gmw.cn/content/2010-02/09/content_1053080.htm

Hi everyone,This week the Green Team’s Skit on Women In Family Business.

http://www.slideshare.net/guestd224927/women-in-business-presentation-green-team-w-11-3465746

PRESENTATION KEY POINTS

Women & Men Entrepreneurs in Family Business by Lall. M and Sahai. S, 2001.

· Differences between man and women entrepreneurs in skills, business goals, management styles, business characteristics and growth rates

· Man and women approach business in a different way

· Women in business have lower self-steam and less entrepreneurial intensity

· Women entrepreneurs experience:

o Gender discrimination

o Limited access to capital

o Difficulty in competing for government contracts

o Lack of information

o Need to work harder to prove their competence

“Women as managers in family firms by Cromie and O’Sullivan”

· Women in business face many problems:

o Hostile environments: dominant masculine culture make women feel excluded

o Organizations are essentially patriarchal

· Women have adopted some strategies to overcome difficulties

o Training opportunities in women-only settings

o Seek mentors to acquire knowledge and political skill and build networks

o Supporting programmes of action such as “Opportunity 2000)

o Promote notion that “female traits” and values such as sensitivity and power equalization are what modern organizations need.

o Delay marriage and having children

· In family businesses:

o Family members have advantage versus non family members to expand their careers and this can be applied to women also

o Access to owners and senior managers provides easy mentoring, training and network opportunities

o Generally, earning and status will depend on the role executed and not on gender

o Women in family firms usually do one of the following

§ Put career first

§ Combine family and career roles

§ Limit attachment to firm and commit to family matters.

MICA REPORT GREEN TEAM

Here is the report on Tai Po Fruits:

http://www.slideshare.net/lelecosti/mica-green-team-report

http://www.slideshare.net/guest0dd42ee/women-in-family-businessppt-3447046

Dear all,

I am including here the main learning key points that we have from the articles we used to prepare our skits and presentation today.

Here is the link to our presentation that supported our skit:

http://www.slideshare.net/guestd67dcc/women-in-business-presentation-green-team-w-11

ARTICLE:  Lall, M. and Sahai, S. (year unknown) Women in Family Business. Retrieved from: www.isb.edu/FamilyBusinessConference/WomeninFamilyBusiness.pdf

· Differences between man and women entrepreneurs in skills, business goals, management styles, business characteristics and growth rates

· Man and women approach business in a different way

· Women in business have lower self-steam and less entrepreneurial intensity

· Women entrepreneurs experience:

o Gender discrimination

o Limited access to capital

o Difficulty in competing for government contracts

o Lack of information

o Need to work harder to prove their competence

ARTICLE: Cromie, S., O’Sullivan, S. (1999) Women as managers in family firms. Article retrieved from Emerald

· Women in business face many problems:

o Hostile environments: dominant masculine culture make women feel excluded

o Organizations are essentially patriarchal

· Women have adopted some strategies to overcome difficulties

o Training opportunities in women-only settings

o Seek mentors to acquire knowledge and political skill and build networks

o Supporting programmes of action such as “Opportunity 2000”

o Promote notion that “female traits” and values such as sensitivity and power equalization are what modern organizations need.

o Delay marriage and having children

· In family businesses:

o Family members have advantage versus non family members to expand their careers and this can be applied to women also

o Access to owners and senior managers provides easy mentoring, training and network opportunities

o Generally, earning and status will depend on the role executed and not on gender

o Women in family firms usually do one of the following

§ Put career first

§ Combine family and career roles

§ Limit attachment to firm and commit to family matters.

MORE INFO about the OPPORTUNITY 2000 initiative

A business-led initiative launched in 1991 which aims “to increase the quality and quantity of women’s employment opportunities in both private and public sector organizations”. By the end of 1995 there were nearly 300 organizations in membership, these are predominantly large organizations who between them employ over a quarter of the workforce. Organizations which join Opportunity 2000 (and pay a fee to do so) undertake to set goals for improving women’s representation and to monitor progress towards those goals. Goals may be quantitative targets or merely statements of general intent. Members are not monitored against any required standard of achievement. The organization regularly surveys participating organizations and reports on policies and practices. It seeks to make the “business case” for being an equal opportunity employer , demonstrating how equal opportunities can benefit the business and thus encourage voluntary action. In 1995 a similar campaign was launched to boost the economic participation of Britain’s ethnic minority population, called Race for Opportunity.

Source: Eurofound (2009). Information retrieved from the website: http://www.eurofound.europa.eu/emire/UNITED%20KINGDOM/OPPORTUNITY2000-EN.htm on March 16 2010.

Hey group

Shaan has uploaded very interesting article about family business.

I decided to put you in a brief picture of russian family business.

For a long time in Russia there are family traditions thanks to which, secrets of the professional skill, the capital accumulated in the years and life experience are from generation to generation transmitted. Trust, respect and pride of the family, - here the basic signs of the Russian family business which, together with development of market relations, left on a new degree of quality in our country.

At the heart of family business lies so-called fiduciary, - personally-confidential relations. From the point of view of the right fiduciary contracts it is much more reliable and more progressive than treaty obligations. In relations such it is not necessary to append the signature, to make promises, to collect the information on the partner. Interaction of the parties is under construction on trust, is thus based not on risk, as for example obligations between the founder and the confidential managing director, and on parent communications. We care of the close people: we show attention, we give gifts, we trust the thoughts and ideas. The same processes occur and in family business when the son, the wife or the brother in combination are business partners. Here where that constructibility in the decision of every possible problems and business matters is observed. The parties in such relations absolutely accurately represent for themselves an ultimate goal, - moral and material welfare of a family. Mutual understanding level in such families exists in the order a sign language and sights.

Now family business in Russia endures new boom of development. It is connected by that the majority of so-called family companies, i.e. the legal bodies as which holders relatives act, are subjects of small business. A small-scale business as world experience testifies, plays a special role in market economy development. Formation of small business in modern Russia is a necessary condition of the decision of a complex of the most complicated social and economic problems, involving in enterprise sector of a significant part of the vacant population, reorientation credit and a fiscal policyy on stimulation of development of production, transition to innovative type of economic development.

That fact testifies to significant potential of a small-scale business that for years of reforms - from the end 80 to the middle of 90th of XX century is there was the most fast-growing sector of economic activity, and its formation occurred in the most complicated conditions. Efficiency of small enterprises is advanced by a number of their advantages in comparison with major concerns:

The small enterprise ensures market demands in those goods and services which averages and large firms to make and render is inexpedient for economic and other reasons, for example because of the limited requirements of the local markets;
Higher capital turnover;
Small enterprises often prove as innovators.

The most typical legal form of organisation of large family business in Russia is the joint-stock company. Thus, under certificate McKinsey, in the West joint-stock companies have passed through economic depression, wars and other crises, saving the family control over business. Therefore experience of such companies is of great value for the Russian family business which worries the first alternation of generations from the beginning of 90th years and for the first time has faced a problem of preservation of the control of a family over business.

First “surprise” expected “the family” companies in which the family had a controlling interest in the property, - their forecasts for long-term success have not justified. Already the second generation of a family following founders of firm which operated business thanks to the sharpness and enterprise, frequently has no these qualities and does not insist on independent management of the company. The majority of the circulation in our board behind reception of a professional legal aid occur during this moment when in the extended family there is a conflict of interests, struggle for influence and dividends, and also for a role of the company executive.

Practice shows that the majority of “family” disputes are allowed within the limits of conflict pretrial stage. Those personally-confidential relations thanks to which, it is possible to reach the general understanding of a situation and a finding of the mutually acceptable decision in this case affect. Moreover, some family companies independently could avoid a fate of similar disputes thanks to the initially competently constructed policy of management of firm. On the basis of the conducted consultations and conversations with chiefs of the Russian financially-stable legal companies, I have received general idea how business in such firms is organised. The strong government and strict hierarchy were a key to their survival and success: unwritten laws of conducting the businesses passing from generation to generation, and exact awareness that means the vested interest the company had great value. The property right - simultaneously blessing and a damnation - gives the chance to a family to destroy business the same as and to give it the accurate form and to enjoy profit. For this reason families- business owners have created systems which limit and counterbalances in the basic three measurements of family business: properties, the supervisory board and management.

The mess in oral and written arrangements - both official, and informal - concerning family business is usually observed:

As operating advice of the company and as it is selected is formed;

In what cases decision-making requires a consensus, special majority or interaction of shareholders;

What conditions, at which members of the family can (or cannot) to work in the given business; as shares can (or cannot) to sell inside and outside of the company;

Other elements of corporate and financial strategy.

Similar agreements on which working out one decade can leave not, help to avoid difficulties at transition of the power from one generation to other and form a basis for fulfilment of two main conditions of long-term success of family companies: professional management and continuous management of business of members of the family.

The organisation of holding structures with rather independent branches became the tendency of last time for the Russian family business. Last also can be in the property at the state though basically family holding companies completely supervise most important of affiliated firms. Saving the companies as private, the family avoids pressure from outside external share holders of the enterprise for fast and effective work. It allows the company to carry out diversification strategy for achievement of a sustained profit and a survival in the conditions of the changed market. Such approach does not play a role for the investor, but for families which assume to carry out the control throughout several generation, other party of a medal is visible also.« We wish to ensure a diversification in our business so that our shareholders should not withdraw money and could carry out a diversification independently », - one of chiefs of a family firm has told to me.

All this sort of companies see themselves as conglomerates, as the companies leading not one kind of business. But, in spite of the fact that some firms have a wide spectrum not connected among their businesses, nevertheless the majority of them are concentrated to four main spheres. All of them search for the compromise between business with high brave indicators and business which ensures more or less stable inflow of money resources. Many of them supplement a core business with a venture capital and a private property in which it is put from 10 to 20 % of their capital.

Possibility fast to react to possibilities which arise in a network of family business, is very important. 5 million in time invested a decade ago $ have come back to the companies fifty billions. Strategy consists in constantly to update the portfolio. To update so that the company could protect itself correctly made investments, smoothly redistributing means from stable sector to a beginner to develop. In the majority of family companies new possibilities are clear: transparent business has for them preference as such firms lead reserved investment policy. It distinguishes «family business» from the open companies which have access to the capital and in the mid-nineties frequently preferred growth to the detriment of to incomes.

Today the Russian family business taking a special niche on a competitive market, is attractive possibility to exist without re-structuring and expansion, and as a coordination of a financial policy with brave strategy. A reinvesting - unique possibility for expansion of family business which does not wish to manufacture new shares or to increase debts. For many families it means necessity not to spray and spend means, and to pay attention of the primary activity. The such enterprises are focused on special culture of business dealing and such quantity indicators as growth of the company and profit earning.

Family corporations, undoubtedly, bring also non-economic benefit: respected position in company, pride and feeling of an accessory to family traditions. Also it and possibility for one members of the family to work in business, and for others – to achieve the purposes with a support on this business. The majority of holders of family business try to transmit the business to children or relatives, trying to motivate in every possible way them for this purpose: hold family meetings, have together a rest, solve all questions of the company together in formal and informal conditions. They consider, what exactly at such meetings the young generation can understand importance of family business.

It is necessary as to notice that all organisation-legal forms of the Russian family business are attractive to diligent participants of a turn-over who are ready to lead entrepreneurial business, risking all property. That the given forms have received more a wide circulation granting is necessary for subjects of family business of certain privileges, in particular, in the field of tax and credit relations.

(Dont think you need reference as all the information is taken from russian sources)

The Danger of Doing Business in Russia

Russia’s ability to attract foreign investors is being compromised by a new problem: reiderstvo, or “raiding,” a term that describes the illegal tactics used by criminals to seize businesses and land their owners in jail.

Russian lawyer Sergei Magnitsky, imprisoned on tax evasion charges, told Russian Interior Ministry investigators that he was being denied medical care and subjected to “inhumane and humiliating conditions” in Moscow’s notorious Butyrkajail. The treatment, he said, resulted from his refusal to give false testimony against himself and others. A month later, Magnitsky, 37, was dead.

  You can find the article here http://www.syntone.ru/library/books/content/3095.html 

It’s in Russian, but I’ll write here the main ideas that are related to the topic.

Main characteristics distinguishing Russian family business from the world one:

• lack of family corporations and big family firms;
• existing family firms are comparatively young;
• family business is mainly focused on trade and service sectors;

History of family business in Russia:

The history of Russian family business starts from times of Kievan Russia. It’s related to the process of trade development.

First famous family dynasties of Russian entrepreneurs started to form in times of Ivan the Terrible.

New stage of family business development is related to the the reign of Peter the First, when there was a range of support programs for family business. Mainly, family enterprises were established in trade sector.

The year 1917 was fatal for Russian family business. Started revolution stopped its development more then for 70 years.

In later 80s some families managed to establish their small cooperatives and then start again their family business.

Hello Ed, I am not sure if we are allowed to create a post on an individual basis, but this is something I thought would be interesting to discuss and it didn’t seem to fit within the existing posts.

While doing some research about women in family businesses I came across the following Abstract:

“Psychological contract theory (Rousseau, 1995) suggests that women and those with family responsibilities may negotiate new psychological contracts that include family-responsive benefits such as flexible work hours. Relationships of gender, family responsibility, and flexible work hours to organizational commitment and job satisfaction were examined among 160 matched male and female managers in a cross-organizational study. Results revealed that women who perceived their organizations offered flexible work hours reported higher levels of organizational commitment and job satisfaction than women who did not. Also, flexible work hours were related to higher organizational commitment and job satisfaction for those having family responsibilities. Implications of these results for future research and organizational policy are discussed”

http://www.jstor.org/pss/3100183

I was wondering if any of you agree that in a family business context, a “psychological contract” that includes family-responsive benefits is relevant or if you think that this is normally taken for granted. Perhaps this is something family businesses need to consider when hiring or integrating new family members in the business.

This is a graph that clearly states how the psychological contract fulfillment affects motivation and therefore job satisfaction

From the source: http://www.emeraldinsight.com/fig/0500230101001.png

__________________________________________________________________________________________________

Since this post talks about Physiological contracts I was drawn to do some reading on the subject. In doing so I came a across a book by Denise M. Rousseau titled Psychological Contracts in Organizations: Understanding Written and Unwritten agreements. From a quick skim, the book looks into these contracts in organizations in general rather than just family businesses.

Key point from the article:

1) Contracts both written and unwritten tend to change when put to the test

2) Contracts are thought to be a pervasive aspect of organizational life

3) Contracts are not well understood because of their intuitive nature

4) Psychological contract is individual belief, shaped by the organization

5) Psychological contracts have the power of self-fulfilling prophecies

Read More Here

Hey all!

I’ve had this article with me for quite a while but hadnt been able to find it. As everyone knows, the definition of family is different for many cultures. And with that difference, the basis of a family business also becomes different.

The article is one which analyses and assesses the definition of family in Dubai as well as explaining what sort of industries family businesses are attracted to.

hope u enjoy the read! its quite long but it gives a picture of what family businesses are like in the middle east!

Thanks Shaan, the article really makes a picture of family businesses in middle east, though as they say, imformation was limited. Well, for Russia it’s also would be difficult to gather proper info for an in-depth research.

________________________________________________________________________________________________

The Article was way to long to fully read! Check out the this abstract I found of another article on family business in the Middle East.

The results in this paper on non-family business argues that that mandating gender quotas for directors can reduce firm value for well-governed firms. Drag your cursor over my avatars to see my inline remarks. Learn to place your inline remarks throughout these blogs

Is it the same for family businesses?

Discuss and debate the above here, develop arguments in the following blogs and generate your own contentious blog on the role of women in Family Businesses, always back up your case with evidence, reason and truth; do not provide mere anecdotes as this is the foundation of poor quality dialogue:

Go here to answer: What value do women bring to Family Businesses?

Go here to answer: What values do both genders destroy in Family Businesses?

Go here to answer: What have the roles of women been in your Family Businesses?

Contribute here for: Women-Owned Family Business- The Story so far?

Under what conditions should Women participants in Family Businesses be Family or Non-Family Members? e.g. does size of firm, generational phase of business, sector, etc effect the respective gender contributions to performance?

Do the roles of women in Family Businesses differ across nations? What is the current policy and legislation regarding the role of women in Family Businesses in your nation?

WARNING NOTE: The papers below are not based on Family Business research, you are required to search and share your research on Women in Family Businesses through the various blogs above and your own blogs.

1. ‘Despite the fact that female directors have a significant impact on board inputs and firm outcomes. In a sample of US firms, we find that female directors have better attendance records than male directors, male directors have fewer attendance problems the more gender-diverse the board is, and women are more likely to join monitoring committees. These results suggest that gender-diverse boards allocate more effort to monitoring. Accordingly, we find that CEO turnover is more sensitive to stock performance and directors receive more equity-based compensation in firms with more gender-diverse boards. However, the average effect of gender diversity on firm performance is negative. This negative effect is driven by companies with fewer takeover defenses.’ Adams and Ferreira (2009).Women in the Boardroom and Their Impact on Governance and Performance, Journal of Financial Economics, December 2009, 94(2), 291-309

2. This article examines whether and how the participation of women in the firm’s board of directors and senior management enhances financial performance. We use the Fama and French (1992, 1993) valuation framework to take the level of risk into consideration, when comparing firm performances, whereas previous studies used either raw stock returns or accounting ratios. Our results indicate that firms operating in complex environments do generate positive and significant abnormal returns when they have a high proportion of women officers. Although the participation of women as directors does not seem to make a difference in this regard, firms with a high proportion of women in both their management and governance systems generate enough value to keep up with normal stock-market returns. These findings tend to support the policies currently being discussed or implemented in some countries and organizations to foster the advancement of women in business.Francoeur, Labelle, and Sinclair-Desgagne (2008) Gender Diversity in Corporate Governance and Top Management . Journal of Business Ethics, Vol. 81, 2008

Prada case. Although Miuccia didn’t set up the business she made an empire from small family business. (I am sorry I only found German webpages about this but goole it if you want to know more about the two successful business women)

“Mario Prada started the Prada label in 1913. He designed and sold handbags, shoes, trunks, and suitcases though two boutiques in Milan, and had clients across Europe and the US.

In 1978, Mario’s granddaughter, Miuccia Prada, took over the company. Miuccia was a former mime who had spent five years studying at Milan’s Teatro Piccolo, and had a PhD in political science. Although her qualifications didn’t seem appropriate, her sense of fashion was unmistakable. The label was still mainly a leather goods manufacturer at that point, and had been struggling financially for several years. Competition from other fashion houses like Gucci had taken its toll. Miuccia turned things around and steered the House of Prada towards the world of haute couture.

About the same time as she took the helm of the Prada label, Miuccia married Patrizio Bertelli. Bertelli took on the role of business manager, allowing Miuccia to focus on designing and perfecting the new Prada look.

American financial newspaper, The Wall Street Journal, has named Miuccia one of the thirty most powerful women in Europe. From fabulous runway shows to gracing the bodies of actresses like Uma Thurman and Cameron Diaz, Miuccia Prada has taken her grandfather’s struggling leather goods business and created a true empire.”

source: http://www.lifeinitaly.com/fashion/prada.asp

“There is an emergent and growing presence of women in U.S. family-owned businesses. As their
presence changes the face of family business in America, some areas deserve particular focus:
• Female-owned firms exhibit greater productivity than male-owned firms. Since both types of firms operate in the same top five business sectors, clearly something is happening in the management style of female-owned firms to garner these results. Learning from the management
approaches of female owners may be an important future step for family business success.
• Familiarity with women on the ownership-management team seems to breed their acceptance.
Once family-owned firms include women as either owners or CEOs, the level of full-time
participation by women family members and female leadership on the board or as CEO rises.
• Family-owned businesses have long been looked to as philanthropic donors to causes and
their communities. As female owners bring an increased emphasis on charitable giving to their
family businesses, philanthropic organizations can expect to benefit.
• Families seeking to shore up family involvement and satisfaction in their businesses might look to the model of woman-owned firms. Woman-owned family firms experience higher levels of family loyalty, business goal agreement, and business pride, and benefit from lower rates of family
member departure from the business.”

“Overall, female-owned firms have fared less well in terms of revenue growth than those owned by males. Again, this may be linked to the relative youthfulness of their firms. Less experience in the marketplace may make it harder to rely on an established business base to generate new sales opportunities.

On the other hand, it is also the case that woman owned firms tend to be more fiscally conservative. More of these firms carry no debt, other than trade payables, compared to male-owned firms. Such fiscal conservatism may give them greater ability to weather adversity, but it foregoes the opportunity to use debt to finance growth. It is a matter of investigation whether the reduced use of long-term debt by woman-owned firms is due to barriers to access for credit, which have in the past been reported by women business owners and entrepreneurs, or simply a slightly more risk-averse financial posture on the part of these owners. The use of financial leverage could be an important variable for the future growth of woman-owned family businesses. Femaleowned firms may benefit by funding future growth through levels of debt comparable to those at male-owned firms.”

WOMEN IN FAMILY-OWNED BUSINESSES
I. ELAINE ALLEN, PHD NAN S. LANGOWITZ, DBA
From the Center for Women’s leadership at Babson College

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“More women stepping into roles in family business”

“Glory Dolphin became executive director of a business that distributes air purifiers in 2000 in part because of family ties: Her fiance was the son of the company’s founder. But during the Silicon Valley native’s first years at the Southern California company, IQAir North America, Dolphin so impressed the company’s sceptical patriarch that she recently was promoted to chief executive officer of U.S. operations for the firm — replacing her husband. Dolphin, 29, assumed her CEO post earlier this week.

She is among a new generation of women succeeding male relatives in top jobs at family-owned enterprises. The trend is expected to escalate as more women secure business degrees and management experience while gender-biased attitudes of the past fall.It wasn’t a given that Dolphin, a Milpitas native, would get such a powerful position at her husband’s family company. But she had the education, savvy and drive to get the support of the company’s founder.

“It’s not automatic. I don’t think today that there is some inheritance right,” Dolphin said. “Even within the family, you’ve got to prove yourself.’ About 34 percent of family-controlled firms projected in 2002 that their next CEO would be a woman, up from 25 percent in 1997,according to a survey by the Centre for Women’s Leadership at Babson College and MassMutual Financial Group, which jointly released a report on the subject late last year.The growing number of female-owned businesses is contributing to the change. Nearly half of all privately held companies in the United States — 10.6 million — are 50percent or more female-owned, according to a study conducted by the Center for Women’s Business Research. Those numbers are up 17 percent compared to 1997, the group found.“As more and more women start their own firms, it becomes much more acceptable to consider that a woman in your family might be the most appropriate person to be included in the business and to have succeed the owner over time,” said Nan Langowitz, director of Babson’s Center for Women’s Leadership. While apparently on the rise, the number of women taking the reins at family-owned firms remains more of a trickle than a flood. “The tide is starting to turn, although we’re probably 10 to 20 years away from it being a major trend,” said Andrew Keyt, executive director of the Loyola University Chicago Family Business Center. About 100 colleges nationwide have launched family business programs to assist companies with everything from helping young family members decide whether they want to work in a family firm and developing a succession plan to defuse sibling rivalry.”

In the article “More daughters get keys to family firm” by Jim Hopkins, I found an interesting fact, which relates to the above post by Dimitris - which I have highlighted. “Half of all business bachelor’s degrees now go to women — up from 34% in 1980. Among master’s degrees, it’s 40% vs. 22%. “As women became more qualified … they became a potential (CEO) candidate,” says Lee Hausner, a family firm consultant and psychologist.” This shows a direct correlation between the business degrees earned and the CEO positions filled by women. The author attributes the proliferation of top-notch women CEO’s to 3 factors: 1) high profile women role models (such as Tami Longaberger, who succeeded her fathers basket-making business in Ohio, achieving $1 bn in revenues, and controlling over 7,000 employees), 2) changing values (such as businesses shifting from autocratic/military type management to communicative and coordination type management, which women are better at) and finally 3) better backgrounds, such as the increase of business degrees from women. You can check the article out here.

By Michele Chandler, Mercury news

Link: http://www.usfca.edu/fbc/More_women_in_family_bus.pdf

Hi,

Found some charts outlining the major industries with the most women-owned.

Link: http://www2.census.gov/econ/sbo/02/womencharts.pdf

“Over the past five years, woman-owned family businesses have increased by 37%. There is also evidence to indicate that women-owned family businesses are better prepared for transition scenarios and have higher success rates than businesses controlled by their male counterparts. A recent trend worth noting is the increasing number of family businesses that are being passed down to daughters.”

“Women in family Business: an Untapped Resource” (Lyman et al,  Women in Family Business Program, warton Applied research Center, University of Pensilvania 2001)

” Women facing the pressures of family business life often think that they are the only ones in the predicament”

This article advises women to develop networks with other women working within family business environments in order to share experiencesand to evolve. The author believes that there are few groups of this sort but by creating more women will be provided with better ideas and constructive advice as to how they can enhance their professional life.

BLUE TEAM - “WOMEN IN FAMILY BUSINESS” SKIT SCRIPT. CHECK IT OUT!

http://www.slideshare.net/alidhanji/women-in-family-biz-skit

The following source is basically a website “the greater Cambridge partnership” where I found a myriad of links to women in business-related websites. I think it is quite useful for those of you who are interested in exploring the topic in more detail… perhaps for your dissertation?

http://images.google.co.uk/imgres?imgurl=http://www.gcp.uk.net/images/women.gif&imgrefurl=http://www.gcp.uk.net/women-websites.php&usg=__UdrqLqYv_dQRhewQ-PyetfXF2zM=&h=333&w=390&sz=17&hl=en&start=3&um=1&itbs=1&tbnid=wdRfJIzDrw68PM:&tbnh=105&tbnw=123&prev=/images%3Fq%3Dwomen%2Bin%2Bbusiness%26um%3D1%26hl%3Den%26client%3Dfirefox-a%26sa%3DN%26rls%3Dorg.mozilla:en-US:official%26tbs%3Disch:1

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Most of the selected articles paint a pretty picture of women-owned business. For arguments sake I decided to look up articled with an alternative view.

Changanti .R: From the abstract of her article titled ‘ Management in Women-Owned Enterprises,’ the author discusses the ‘feminine model,’ which explains that women enjoy success in “female-dominated service businesses.” Furthermore adding that the businesses would “tend to initiate in sectors which are generally accepted as being “appropriate” for women, e.g. personal services.” Read More Here

Nancy & Allen: In their article acknowledge that ‘women-owned businesses’ is one of the fastest growing segments of the US economy. However it states that women owned business are still small in terms of sales and income. It goes on to explain reasons due to characteristics of women. These characteristics have also come up in some of our other blogs. Read More Here

MSN Lifestyle’s Most Influential Women of 2009

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Gold team Skit and sildes

Women in business SCRIPT

5 women meet after class for lunch at a restaurant in London. They start drinking, and start talking about their families.

Woman 1(eshanka): she is an Indian, who is most educated in her family which has 2 more brothers, who do nothing yet the father is planning on transferring the business to the sons, instead of her. Even though, they are younger and not as educated and academically stimulated as her. So she is complaining about her situation. Her father believes that women have no say and no place in business in India, thus she should get married and take care of her family, contrary to what she believes.

Woman 2, 3, 4, 5 are all in SHOCK!!!

Woman 2 (Monique): in my family, we believe that women are important part of any business or family business.  When I am older I will definitely add value to my business and be an integral part of it just as my mother is!

All women are talking about the benefits and support her

Woman 3 (Maxi): although my mother did not have any part in the family business, times have changes now, and I am already interning with my father as he wants me to learn everything from scratch and will only promote me if he believes that I have the knowledge, education and experience to be the director of the company.

After all, 64% of all graduates are Now WOMEN!!!

Man 1 (yousef): well we have a flourishing business and both the sons (himself and his elder brother) work with his father in the family business, and his mother is the one who communicates, and plays the most important role even though she isn’t formally involved in the business and without her, our family and our family business would fall apart and would not exist. There are many conflicts and differences in opinions between him, his brother and his father which are all articulated through one medium: His MOTHER!!!! She bridges the business and the family and helps encourage family relationships, has been centrally involved In times of conflicts between the 3 and has hence, resolved all!

Woman 4 (Inga): I feel that women definitely have an important part in the business. For eg: they can often use their sensitivity and intuition and can multitask at all levels. Further more, in the family they can communicate and also help in the stewardship in family culture. In my family, my mother organizes a formal dinner every Friday where all family members and extended family members need to be present., which keeps us going.

At the end, Eshanka read the powerpoint saying she has learned from the discussion and will take the points to her father to help in her argument that she should be part of the family business.

http://www.slideshare.net/maximhq/women-in-family-business