• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Family business issues and challenges.

Extracts from this document...


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.


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.


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.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level ICT in Business section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level ICT in Business essays

  1. In this coursework I need to produce a detailed business report on one medium-sized ...

    As a student from Russia (I live in Kazakstan) I would like to see Tesco further expand its activities in Eastern Europe, and therefore why not Russia? At the present time there is nothing similar to Tesco on the Russian market, so I think Tesco won't have any problems to get into it.

  2. Effective blending of Entrepreneurship and Professionalism.

    We face a period of innovation such as the one in which the modern industrial economy was born in the last half of the nineteenth century. Practically, all the industries that we consider modern today including aircraft and electronics grew out of these innovations in the late 19th and early 20th centuries.

  1. Business planning

    sheet is a financial statement that shows assets, liabilities and capital of my business at a particular date. Balance sheet shows the state of my business at one moment in time and things that could be different tomorrow. A balance sheet lists assets which are amounts owned by my business such as premises, vehicles, stock, cash and bank.

  2. E1- The classification of the business according to its ownership, and an explanation of ...

    and therefore is extremely vulnerable to investors' and bankers' perceptions about its progress and success. Following on from this, a PLC is also at risk from a take-over from an outside body, if they manage to build up over 50% of the shares in the PLC.

  1. Chinese Entrepreneurs in Singapore: Paths to Success

    As such, family connections were an important factor for obtaining employment opportunities. (Chan & Chiang, 93) When Ng first arrived in Singapore, he was not received by a relative or passage broker.

  2. The spirit of entrepreneurship

    There is no constant in business, markets, and tastes, as circumstances change exponentially. The amount of time and effort that goes into the business plan only takes away from the tasks that require the real attention of the entrepreneur, the decisions that may have a greater bearing on the success of ones venture (Carter, Gartner & Reynolds, 1996).

  1. There is a high percentage of family business in Europe but only one third ...

    For the family-owned business, good governance makes all the difference. Family firms with effective governance practices are more likely to carry out strategic and succession planning. On average they will grow faster and live longer. Management would not have to defend its strategy to outside investors and securities analysts.

  2. How IT Departments Are Responding to the Challenges of E-Commerce

    As distribution channels become electronic, business processes become systems-dependent, products become digital and information becomes the source of innovation and future value creation, the fixed fabric of e-business is IT. The platform of e-commerce is technology; thus IT is not only on the critical path of business development, it is the critical path.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work