Abusiness can be described as an entity that provisions goods andservices to consumers. It is also defined as an enterprise, firm oragency. In that respect a family business can be described as acommercial organization whereby decision making is determined by afamily generation. The family can be related by marriage or blood andare recognized with the organization through ownership or leadership.Though family businesses are widely considered to have positiveimpacts, they also have numerous drawbacks that tend to affect it.The drawbacks include family conflicts as well as incompetent familymembers over the generations. Some family members tend to likeflamboyant lifestyles hence having continuous criticism. This paperwill look to outline the successes and failures of a family business.Describing how a family business helps in the growth of a country’seconomy is also a major undertaking within this paper. By elaboratingon the different aspects of family business, this paper will outlinethe criticism facing this kind of business.
Familybusinesses are globally regarded as the mainstay in any countrieseconomy. They develop wealth, provide jobs, and are rooted withintheir society hence tend to stick around for long periods. Stickingaround for long period means that most of them are inherited byfamily over the years. Stability of a family business depends mostlywith the stability of the family. Success of any business requiresstability over longer years. That is the main reason why familybusiness are regarded as a mainstay. Since they are deeply rootedwithin the family, members are able to get jobs and improve therelifestyles. In that respect, an heir to the family business alreadyknows what to study before he/she takes over the business [ CITATION Joa10 l 1033 ].
Afamily business in some aspect ensures the economic gains encirclewithin the family members. A country’s economy is improved from thefamily perspective before involving the whole country. This meansthat, the lifestyles of family members are improved hence leading tothe general improvement of the country’s living lifestyles. Thiscan be further illustrated by the assumption that a country is madeup of many families related by either blood or marriage. In thatrespect, any activity to improve a particular family leads to thegeneral improvement of the country.
Familybusiness is also advantageous to children or rather students who haveissues deciding their courses of preference. Owning a businesstherefore helps such students to decide more effectively theircourses of preference. For instance, if a family business entails thehotel industry, there are many aspects of hotel services which onecan partake i.e. administration courses, hotelier, receptionist andICT among others. One can venture in a course that relates to theirfamily business.
Anotherimportant aspect of family businesses entails creation of wealth aswell as employment opportunities. Whenever a business is inoperation, various kinds of opportunities open up. It thereforeemploys other personnel that are not necessarily family membersthereby improving the country’s economy. Family businesses alsocreate wealth in various ways that boost the living standards ofdifferent people. Creation of wealth can experienced across thefamily members and personnel involved with the company. With thelimited opportunities in the job market, family businesses play amajor role in ensuring a country’s economy is improved providingemployment hence improving living standards of numerous people.
Thoughfamily businesses are quite influential in the nation’s economy, italso face various criticism and challenges across the globe. Onemajor challenge entail family conflicts. Whenever there is handoverprocess, numerous challenges tend to erupt. A common challenge in theconflict entails the heir to the company. Coming to an agreementtends to be a huge problem in most cases especially if the owner isinvolved with more than one wife. For instance, if a man who happensto be the owner has more than wife, who also have children, itbecomes difficult to decide the heir to the company. In someinstances, it forces the business to be subdivided so as to satisfyall parties involved. Subdivision may lead to instability thataffects profits and impacts negatively on the economy.
Anotherfeature of conflict involves different behavioral aspects of membersinvolved. When finally new members have to take over the business, achallenge may arise when the new members find it hard to accommodateeach other. This leads to quarrels that may hinder the progress ofthe company. Peaceful coexistence becomes a hard task leading to slowprogress or even fall of the company. Bad blood among family membersis also a common feature among family businesses. In many cases thismay lead to events that cause harm to each other that may result todeath. For instance, if an individual to become the company’s chiefoperation officer (C.E.O), he/she may resort to injuring or evenkilling the current C.E.O so as to get the chance.
Whenevera family grows, the shareholders tend to exponentially increase.Though the growth can be advantageous, it also possess threatswhenever costly divorces are involved. Money is therefore used to paythe family impacting negatively on the company’s growth.
Criticismis also directed to family businesses in the aspect of nepotism.Family businesses tend to employ members from the same family withoutnecessarily looking at the qualifications. For example, a person maybe well qualified to get a certain post within a company but does notget it due to a family member targeting the same post. Additionally,promotions within the company tend to be biased on family members. Itis hard for a member who does not share a family link to get promotedwhen a family member is aiming the same docket [ CITATION Joa10 l 1033 ].
Currentresearch indicates that family businesses have adopted a newtechnique of employing CEOs who are not from the same family lineage.This ensures management and running of the company is done with ease.This is because it is easier for a non-family boss to manage andgovern a family business than a family member. In fact, as a CEOstated that working with family members is quite enjoyable since theyseem to be devoted to their jobs. They are committed and tend to workmuch harder since they want to uphold family values [ CITATION Joa10 l 1033 ].
Ingeneral therefore, a family business can be regarded by many to be anintricate issue whose advantages cannot be entirely described. Thisis because the criticism such as nepotism, family conflicts tend toportray it as a bad venture. However, the positive impacts are alsoquite vast. Family businesses are quite vital in the existence andprogress of any country’s economy. From the definition andfunctionality of family businesses, they quite essential and fruitfulif well handled.
Schwass, J. (2010). es: Successes and Failures. Family Businesses: Successes and Failures, 1-10.