Summary of Family Businesses

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Rating

8

Qualities

  • Applicable

Recommendation

Planning, starting, operating and retiring from a family business can be difficult. Issues such as succession and pay, corporate governance and recruiting top talent pose special problems for these kinds of organizations. Rivalry among siblings who inherit a family firm is often the kiss of death for even the strongest family business. Nonfamily members, even those who are senior executives or directors, often feel that the family treats them unfairly or fails to listen to them. In this new book, Peter Leach analyzes and provides excellent advice about how to solve such seemingly intractable problems. His suggestions come out of his long experience successfully advising family-run businesses in the United Kingdom. getAbstract recommends this sage and savvy book to family-business founders, successors, inheritors and nonfamily executives or directors.

About the Author

Peter Leach is the founder and chair of the Stoy Centre for Family Business. He is also a partner at a British firm that specializes in advising family businesses.

 

Summary

Family Businesses Are Everywhere

The family business is by far the most dominant business structure worldwide, representing 65% to 80% of all firms around the globe. Ubiquitous, family businesses are also unique. For example, many place a high premium on idealistic values and possess a strong sense of mission.

Family firms have experienced major changes in recent years. At one time, eldest sons almost automatically inherited control when founders retired or died. This is no longer the case. Whereas all family members used to receive the same pay, most family businesses now use more conventional pay systems that take into consideration merit and performance.

Family-Run Companies’ Unique Challenges

Family businesses face unique challenges on many fronts, including ownership, maintaining harmonious relationships within the family and with nonfamily executives, planning for succession and corporate governance. The problems fall into three categories:

  1. Personality – Especially that of the owner or his or her successor.
  2. Structure – The family’s relationship with the business.

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