FAMILY OWN BUSINESS

Family Own Business



Family Own Business

Introduction

The concept of family business is often associated with small businesses, although this is not entirely true, family businesses are part of the "club of small, medium or large companies," so they have the same problems and conditions of the SME and care. The family business has great advantages as simplicity, speed, trust and agreement between the partners but also have a high level of economic demands that require their members. In essence, the family business is a system of three circles, which overlap (completely or partially) the company, family and property. The degree and direction of movement of each of the three circles define the maturity or rate of business growth and the level of understanding (or not) of family members involved.

Family businesses are dynamic entities. As they mature, the number of people involved in each of these three circles increases and thereby enhances the degree of complexity in their relationships. Consistent with this, material and immaterial needs of the sum of these people are more divergent and difficult to handle, and with it, the stage of life when each is determined to see the reality of differently (Verser, 2004,pp 9). For many other circumstances, family businesses remain in force for at least decades to come, continue to evolve, grow and be profitable. Family businesses, especially medium and large, have been working on strategies to ensure their competitiveness in the long term so that both the interest of the family as the company is met. It is here where the concept of corporate governance is gaining ever-increasing importance as a pillar to strengthen the management of family's company. The paper will discuss a case study of a flower shop as a family business. Moreover, it will discuss all the challenges and opportunities associated to that particular family business.

Discussion

Succession in family businesses

This is an extremely complex problem that must be treated carefully. Aspects can be seen as diverse as the internal conflicts of the family power, mass resignations as a result of dissatisfaction with the transition process, and so on. What is absolutely true is that the transition of power is no longer the company will not be the same. The first option, which is very common, is to grow the company as a result of internal changes, this is the best that can happen, and occurs when the successor is a capable person who knows the business, and a new vision, manages the development of the company. Another possibility is that the company pond, their growth trends disappear or even be back, due to the lack of ability or experience, the new administrators. A poor sequence leads the company to lose its drive and can be combined with discontent or dissatisfaction with the new administration, which is reflected in the performance of the company as a whole (Smallbone, 2008, pp 267).

Centralization of power

On the centralization of power means that there is too much responsibility and authority for a single person ...