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Family business issues and challenges.

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Introduction

Family business issues and challenges A family business is a company in which family members are directly involved in the ownership and/or functioning of the business. While family-owned businesses provide a living and personal satisfaction for many people, they must be managed just like any other small firm if they are to succeed. We usually think of family businesses as being started, owned, and operated by the parents, with children helping out and later taking over. Now, though, two contrary trends are developing. First, many young people are going into business for themselves- and tapping their parents for funds to finance their ventures. In return, the children often give one or both parents an executive position in the company, including a seat on the company's board. Also, many retirees want to work part-time for the children's businesses, without assuming a lot of responsibility. Another trend is the large number of spouses doing business together. We used to think of married couples running a small neighborhood store, toiling long hours for a modest living. Now, though, a new breed of husband- and-wife entrepreneurs has emerged. They typically run a service enterprise out of their home and use computers, modems, and phone lines as the tools of their trade. ...read more.

Middle

Unfortunately, their quarrels and ill feeling may spread to include non-family employees. One possible solution is to convince family members, as well as non-family employees, that their interests are can serve by a profitable leadership. Some members want to become chief executive officer of the business but do not have the talents or training needed. Some others may have the talents, but because of their youth or inexperience, these talents may not be recognized. Family members with little ability to contribute to the firm can be placed in jobs where they do not disturb other employees. Sometimes, though, relatives can loaf on the job, avoiding unpleasant tasks, or taking special privileges. They may be responsible for the high turnover rate of top-notch non-family managers and employees. Such relatives should be assigned to jobs allowing minimal contact with other employees. In some cases, attitudes may be changed by formal or informal education. Compensating family members and dividing profits among them can also be difficult because some of them may feel they contribute more to the success of the firm than others. Compensation should therefore be based on job performance, not family position. Fringe benefits can be useful as financial rewards, but they must conform to those given to non-family employees. ...read more.

Conclusion

The last problem that related with family is a growing problem facing many small businesses today is apathy on the part of offspring. Often, children who are reared in a small business become bored or uninterested, or simply lack the drive and desire to succeed that their parents displayed. They may feel that since the business has supported them in the past, it will continue to do so in the future. One way to prepare children to take over the family business is to let them work on simple jobs, or on a part-time basis, which provides insights that may influence them into-or away from the business. Another form of preparation is working for another company in order to broaden their training and background. Such experience helps justify moving a family member into the family business at a higher level. Summarizing all above we can say that family business high risky with his core problems as above mentioned. But also gives to people feel freedom and responsibility for his any action. Reference: 1.William L. Megginson, Mary J. Byrd, Charles R. Scott, Leon C. Megginson Small Business Management 2001 year 2.Thomas W. Zimmerer, Norman M.Scarborough Essentials of Entrepreneurship and Small business Management 2002 year 3.Charles R. Kuehl, Peggy A. Lambing Small Business; Planning and Management 1997 year 4.Longnecker, Moore, Petty and Donlevy Small Business Management 1998 year 1 ...read more.

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