Thicker than water: Family Enterprise Management
A family business can be anything from a single mom-and-pop store to a global corporation like Red Bull, BMW or Mittal Steel. What marks them out from other businesses is the family dynamics going on within the company and in the boardroom, which can sometimes lead to quirky management styles and unique cultures and procedures. All this is very old-school, but today’s family-run companies include some of the most innovative and successful business around. Wal-Mart, anyone? Ford? Toyota? The Tata Group? Samsung? All multi-generational family-run businesses. And they are not uncommon – far from it; family businesses generate more than 50% of global GDP and contribute to the creation of 60% of new jobs.
So what are the secrets to their success, and how have they overcome the obvious problem inherent in family businesses: the fact that personal and family interests and business interests do not always coincide? Families often find it difficult to decide on which film to watch or where to go on vacation, so how do they reach business decisions that suit all involved and are good for the business too?
Such processes are usually hidden from public view in the boardroom, and we don’t know how much desk-pounding, tears and acting out goes on behind closed doors, just as we are not normally privy to the domestic matters of other families unless they tell us. And there are usually many non-family stakeholders involved as well, seeing as a family business can have as few as two related people with a controlling stake in the business, and be otherwise staffed and run by hired hands.
Given the unique nature of all family businesses, how does one go about setting up, running or passing on the baton of a family concern? Are there certain rules and best practices that apply to all such scenarios? If so, where are they to be found?
Help is at hand in the form of a course from Florida’s Stetson University called Family Enterprise Management. It can be taken as a major or minor as part of the Bachelor of Business Administration, and covers Company Operations, Family Foundation Management, Consulting, Legal Services and Financial Advising. Graduates tend to become managers, employees, owners of and advisors to family enterprises.