Managing a growing Family Business: A Case of Tracom Stock Brokers Pvt. Ltd (original) (raw)

The Dream of Continuity of a Family Business across Generations

Today, the family business companies are an important subject of study and research. They form the backbone of the economy and represent 80% of worldwide companies according to the Institute for Family Business (IFB). These companies surf from a significant problem the conflicts between the family and the style of management. The different phases of business Development as the transmission are dominated by emotions. This is why the learning Institutes and consultants as IEF, OSEO, INSEE, IFA, KMPG and INSEAD were founded to help entrepreneurs and family businesses and to support their families regarding conflicts, transmission, funds transfer, properties. The main objective of this paper is to shed light on the common factors and characteristics that contribute into the success of family business companies.

RUNNING IN THE FAMILY - PATERNALISM AND FAMILINESS IN THE DEVELOPMENT OF FAMILY BUSINESS

Family businesses are special in many respects. By examining their financial characteristics one can come to unique results. This paper explores the general characteristics of the financial behaviour of family businesses, presents the main findings of the INSIST project’s company case studies concerning the financing issues and strategies, and intends to identify the financial characteristics of company succession. As the parallelism of the family and business dimensions characterize the whole existence of family businesses, it is also present in their financial affairs. The financial decisions in family businesses (especially SMEs) are affected by the following factors:  the primary goal of business decisions is not exclusively profitability,  the simultaneous presence of family and business financial needs requires careful coordination,  preferential handling of family needs at the expense of business needs - though there is evidence of postponing family investments for the sake of business, too. Family businesses, beyond their actual effectiveness, are guided by individual goals like securing living standards, ensuring workplaces for family members, stability of operation, preservation of the company's good reputation, and keeping the company's size at a level that the immediate family can control and manage. The INSIST project’s company case studies revealed some interesting traits of family business finances like the importance of financial support from the founder’s family at the establishement of the company, use of bootstrapping techniques, financial characteristics of succession, and the role of family members in financial management. Keywords: Family Business, family business finances, succession, bootstrapping.

Succeeding Generations: Realizing the Dream of Families in Businessby Ivan Lansberg

2000

Specific Features of Family Businesses: A Contribution to Literature

Financial Environment and Business Development, 2016

The family business represents a subset of the whole range of enterprises, and, therefore, it has all the essential requisites of them. However, it is characterized by the strong relationship with one or more families which, by providing the risk capital, constitute it. Consequently, its functionality strictly depends on the evolution through which these family units go and on the decisions that they make inside of them. Italian and international scholars had devoted particular attention to small-and medium-sized businesses, often considered as transitional phases for a dimensional development of the enterprise. The empirical evidence has actually disproved these assumptions, leading to the conclusion that even small-and medium-sized businesses can achieve high levels of success without necessarily increasing their dimensions. Starting from the eighties of the last century, business studies have considerably developed in this respect. The family business has now assumed an important role in the national and international scene, thus attracting an increasing interest in the theoretical and empirical research. The wide and rich literature on family businesses has highlighted a variety of topics, such as the understanding of the success and development factors of family businesses, the peculiarities of their management models, their corporate governance, their valuation, and, generally, the specificity of small-and mediumsized businesses. Today, a definition of a family business, which is unanimously accepted by the scholars of the field, is nonexistent. Therefore, this work aims at identifying those aspects, which are typical of a family business. Moreover, the abovesaid paper highlights too some other aspects, useful to identify family businesses from nonfamily ones. Finally, the paper wishes to examine how the identified variables (such as the ownership, dimensions, succession, and involvement of family members) affect the family business performance.

Governance in the Family Businesses

Entrepreneurial Family Businesses, 2020

The key factor distinguishing family firms from others is the family’s involvement in the governance of their firm through participation in ownership, management, and board (if any) along with their intentions for maintaining family control over the firm across generations. Firma Roleski in the profile of this chapter is an example. The level of family involvement in governance depends on a firm’s being private or publicly traded, firm age, firm size, industry in which it operates, and family size as well as other family dynamics. In the profile firm Firma Roleski, aside from 100% family ownership and involvement in management, a family constitution is in place not only to ensure the continuity of the family business success but also to facilitate the succession to future generations.

THE INFLUENCE OF FAMILY RELATIONS ON DECISION MAKING IN FAMILY BUSINESSES

The peculiarity and uniqueness of family businesses set them apart from other businesses in many things. Natural need of man to survive in these harsh circumstances forces him to constantly seek new sources of funding or simply tries to improve the existing. Secure existence is difficult to ensure. The successful family business provides many benefits: reliable operation, to be your own boss, flexible working hours, family members are taken care of, to become successful with your own strengths. Also this kind of business brings a range of difficulties that have to be overcomed. Apart from the daily struggle for enterprise development in the complex conditions of tough competition and rapid changes in the environment, family businesses face problems of internal character. Namely, the parents are thorn between the family relations, the love towards their children and the consistence in the decision making processes. Although this is a modern and very present theme however owners of family businesses rarely dare to speak publicly on the subject. This paper presents an action research conducted on a sample of 26 family businesses in FYROM. This research study is primarily exploratory in nature, and the research instruments include survey through questionnaires with family member and employees that are not family members. Key words: family businesses, family relations, decision making, family members, non-family members.

Managing continuity in the family-owned business

Organizational Dynamics, 1983

Family Business is a dominant form of corporate ownership in the world. Their fame and size differ grandly, where some of the world most famous companies and brand names are Family Owned Business (FOB). FOBs characterizes in seeing extreme longevity in the tenure of their CEO, with a not uncommon reign of 20-25 years, and a total commitment to their businesses. Further to that, the unique bundle of resources created through the complex interactions between family members, the family unit, and the business, the "familiness of the firm", constitutes a unique competitive advantage. Yet, what may constitute their superior strength can also prove their strongest weakness. Family businesses are highly idiosyncratic. Unlike in other firms, the institutionalization of the idiosyncratic knowledge of the business tends to be lacking in family businesses. Transmitting it, is a complex 4phase process (initiation, integration, joint reign and withdrawal), during which the roles of the predecessor and successor evolve in an interdependent way. At time of transferring, the incumbent shall learn to move away from the role of being the "abusive father" toward being the "protective father" and learn to "let go". What constituted her/his unique management skills (leadership) can becomes an obstacle to founders who possess only start-up skills and can eventually become a "burden for a growing family firm, when other types of skills are needed (management), such as skills to delegate". Indeed, average life expectancy of family firms is estimated to be 24 years, which is also equivalent to the average tenure of their founders. It is thus alarming to note than less than one-third of family businesses survive the transition from the first to the second generation. In order to provide with a multi-dimensional answer to the question; "what may constitute the main categories of risks to be managed in Family Owned Business (FOB), at time of first generational shift?", I have selected to identify and gather the different magnitudes of risks facing a FOB, while categorizing them, linking each to their main owner/s, and assessing their impacts on the transfer appropriateness and business consequences. Twelve risks were identified as follows: No succession planning, Generational shadow, No contingency plans, Improper selection process, No grooming Process, a Weak Management Board, an Even shares split scheme, a Monarchial Management, an Absolute CEO, a Non-functional family council, Family feuding and Family public disavowing. Out of these, I have then chosen to draw a "Risk Identification Map", positioned, weighted and successively detailed each risk on a modified "Risk Heat Map", with the final aim of filling a modified "Riskiness Index" for Family Owned Business at time of first generational shift. Of the 12 identified risks, 7 were assessed as either being Major or Significant risks, while 8 to 10 were to be found in the "(risk) heat zone", where 8 of them, were associated as being under the whole, or shared, ownership of the incumbent. It is therefore of prime importance that the incumbent understands the need to grow a business by "managing" it as well, that is preparing concurrently for the future's future. Incumbents are tantamount to the success but also to the failure of their business, often avoiding any strong counterweighting scheme to their overall reaches in the business. Learning to let go, planning for its succession, while growing a business and a family may in itself appear as a paradox. Yet in the absence of such a forward thinking, statistics will keep showing a 70% death rate of Family Owned Business at time of first generational shift. ________________________________ 9 "Complete loss of an important service area for a short period or a significant effect on services in one or more area for a period of weeks with significant impact on achievement of a key target or objective". 10 "Moderate effect of an important service area for a short period and/or adverse effect on services in one or more area for a period of weeks with moderate impact on achievement of one or more targets or objectives". 11 "Brief disruption of an important service area and/or minor effect on non-crucial service area resulting in disruption for less than one day with minor impact on achievement of targets". 12 "Empirical data or observable phenomenon supported by evidence". 13 "Combination of fact and interpretation of people and activities". 14 "Emotions that intensify or diminish facts or beliefs". 15 "Judgments masked as facts, beliefs and feelings". 16 "Beliefs without reflection". 17 "A pre-judgment that interferes with an objective perspective".

Succeeding Generations: Realizing the Dream of Families in Business

Administrative Science Quarterly, 2000

Growth Processes of Mid-Sized Family Firms

This research note on a family-controlled firm in Singapore suggests how such businesses, in competitive industries, may grow and survive. Located in the literature on small firm growth, we explore a corporate incident that threatened the survival of the firm under study. An analysis of the manner in which the firm's managers responded to this threat by developing and launching a new core business, without external intervention, forms the basis of the scholarly contribution of the case. It illustrates how a corporate incident can draw the attention of core shareholders to their need to address specific business and management issues and make subtle organizational changes that ensure the firm's survival under close control.

Managing a growing Family Business: A Case of Tracom Stock Brokers Pvt. Ltd (original) (raw)

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