Entrepreneurship in Family firms

Advantages of Family firms

Ownership is controlled by family members (Direct supervision) Absentee owner family firms Latent family firms (only 1 member is involved)

Specific advantages
Financial resource advantage Human resource advantage

Family business advantage

Organizational resource advantage Reputational resource advantage

Family life cycle

Stage 1 Founding by Entrepreneur Stage 2 Growth and Development : First generation Stage 3 Maturity and success: Second generation Stage 4 Introduction of professional management: Third generation

Culture of family firms

Paternalism Participative (group decision making, collateral and no favoritism) Professional management (not oriented to family, contribution based)

Issue facing family firms

Succession Participation Compensation and ownership Family relationship Nonfamily relationship Personal obligation Business responsibility

Guidelines for Success

Succession has to be handled consciously Rules of entry should be properly designed Handle family relationships in an effective manner Transition (Planning) Guidelines for next generation