Chapter 5: The Family Business Flashcards
What is the family’s primary function?
The care and nurturing of family members
What is the business concerned with?
The production and distribution of goods and/or services
The family’s focus is on what?
Creating value for family members
What does the family emphasize?
Cooperation, unity, and stability
What is the business’ goal?
To create value for customers
What does the business emphasize?
Competition, diversity, and flexibility
What can complicate the management process?
Competing interests
Competing interests can create what?
Tension and conflict
Business Success is also
Family success
Family businesses can convey a sense of this
Tradition and achievement
Everyone who accepts a position with the business should learn what
the heritage and accomplishments of those who created and grew the company
Employees and executives may show favoritism toward their relatives regardless of this
Competence or performance
Many family businesses provide employment to relatives regardless of what
Qualifications
The continuity of a family business depends in large part on this
The next generation family members and their level of commitment to the business
What are the 5 dimensions of socioemotional commitment
Family control Identification with the firm Binding social ties Emotional attachment Renewal of family bonds through dynastic succession
What are typical types of fears
Fear of failure Fear of success Fear of commitment Fear of disappointing your parents Fear of disappointing others
Describe the predator/parasite conflict
Family members working in the firm are seen as predators, extracting money from the business that the outsiders believe is rightfully theirs
From the inside, family members external to the firm are seen as parasites, having ownership rights, receive dividends, or make other claims without contributing to its success
The relatives who form your world in your childhood
Family of origin
The new, separate relationship when you partner with another individual, as well as family connections you acquire from your partner
Family of attachment
The spouse of the entrepreneur helps to do what?
Prepare the children for possible careers in the family business, and mediate between the entrepreneur and the children
Nonfamily members often discover that they have what?
Limited opportunities in a family firm
When hiring nonfamily employees, what should be made clear?
The extent of opportunities available to them and the positions that are reserved for family members
This provides the framework for a family’s system of governance of the firm
Family Creed
A family creed could involve what
Core values
Process for decision making
Benefits that family members may receive
Mechanism for introducing younger members to a business
Dispute resolution process
Philanthropic ambitions of family members
