MGT 4550 Family Business Management

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MGT 4550 - Family Business Management

• MULTIPLE GENERATIONS - ROLES IN THE FAMILY
  BUSINESS
• Chapter 3
• Family Business Management,
• Concepts and Practice
• by A. Bakr Ibrahim Willard H. Ellis

Instructor Dr. Irene Duhaime
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Class Schedule - Week 3

• MULTIPLE GENERATIONS - ROLES IN THE FAMILY
  BUSINESS
• Reading Chapter 3 Dual Relationship
• Case
• The Steinberg Family, FBM, p.57
• Precista Tools, FBM, p.157
• Questions 73, 74, 78, 90, 91 from FBAB
• PROJECT TEAMS TO BE ASSIGNED

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Content

• The Social and Business Functions
• The Overlap between Functions
• The Problem of Carry-over
• Forming Ones Own Identity - Daddys Little Girl
• The Path of Self-evaluation
• continued .

4
Content

• . continued
• Expectations and Exploitations
• Zone of Comfort
• Nepotism
• Confusion
• Supervising Family Members
• The Art of Disengagement

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The Social and Business Functions

• Dual Relationship
• Social Function (Family)
• Decision-making based on emotional and biological
  imperatives
• Business Function (Family Business)
• Decision-making based on objective, rational
  economic model

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The overlap between functions

• Value Conflict
• Consists of different sub-systems of the family
  and the business
• Each sub-system affects and is affected by the
  other parts of the system
• Overlaps cause dysfunction

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The Overlap between Functions
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The Problem of Carry-over

• Create situations of
• no-win
• transfer of family problems to non-family
  employees
• disruption due to family feuds
• difficulty in distinguishing between roles in
  family roles in the business

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Forming Ones Own Identity - Daddys Little Girl

• Suppression of identity for offspring
• Tendency for gender biases to influence
  decision-making

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The Path of Self-evaluation

• Offspring often
• crave autonomy
• are not prepared for succeeding the founder

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Expectations and Exploitations

• Offspring are often required to meet family
  expectations
• Elder family members may exploit younger family
  members
• difficult to say no
• working long hours
• little compensation

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Zone of Comfort

• ...establishing well-defined inter-personal
  boundaries is critical in family firms
• to avoid negative impact on family life

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Nepotism

• The advancement of family members on the basis
  of their relationship in the social function
  rather than on their qualifications...
• Causes some family businesses to lose talented
  staff

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Confusion

• Confusion over
• Rules and Roles
• Acceptable practices e.g. in succession or hiring

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Supervising Family Members

• Hard to criticize elder
• Hard to evaluate close family members
• Family members must learn the art of
  constructive criticism.
• Senior family members must take the lead to
  explain the benefits of being open and candid.

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The Art of Disengagement

• Box 3.2 The Art of Disengagement
• Formulate clear organizational goals, objectives
  and strategy.
• Design job descriptions.
• Establish policy and procedure guide.
• Design the organization chart.
• Develop the strategic plan.
• Prepare a code of conduct.
• Establish performance evaluation measures.
• Develop a succession plan.

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Cases

• THE FOUNDER AND MULTIPLE GENERATIONS
• Cases
• The Steinberg Family, FBM, p.57
• Precista Tools, FBM, p.157
• Questions
• 73, 74, 78, 90, 91 from FBAB

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Project Topics

• PROJECT TOPICS DUE THIS WEEK !!!

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Class Schedule - Week 5

• CONFLICT MANAGEMENT IN FAMILY BUSINESS
• Reading Chapter 4
• Case Northern Construction Inc., FBM, P.203
• Questions 9, 24, 59, 70, 77, 85, 86, 90 FBAB

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Question 73

• Is it a good idea to spend time together away
  from the business?
• Can you ever really have a separation between
  family and business?

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Question 74

• When you and your sibling are contemplating
  joining the family business, what should you,
  your sibling and your parents have in mind
  concerning sibling relationships and roles?

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Question 83

• Should advisors be or become personal friends ?

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Question 90

• What are the different types of company cultures
  that can exist in a family business and does it
  matter for family harmony and good business ?
• What can you do to emphasize more, the cultures
  good points and change its negative ones?

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Question 91

• How do you get management and employees to buy in
  to culture?
• How do you also market that culture to attract
  employees and customers plus impress others in
  the industry?