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Why is Family Business Different?
Why is Family Business Different?
Family businesses are inherently complex: in addition to dealing with business issues, they must also deal with ownership and family issues. This complexity confers tremendous strength - families have values and look towards future generations and sustainability; ownership is independent and long-term; and the company can adopt unconventional business models. Because of this, family businesses can, and often do, outperform publicly held corporations.
However, conflicts stemming from the three dimensions can make this complexity an inherent weakness: each dimension may move in a different direction, causing tensions to rise between family members and even the business to fall apart.
How can family businesses minimize their inherent weakness and leverage their inherent strengths? Our research indicates that successful family businesses do this by - both deeply and broadly - understanding their complexity and preparing for proactively dealing with particular issues that arise at different stages.
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