8.1 Strategic management in family businesses
Except for the strategy of a firm as such (see previous chapters) family businesses have to pay attention to certain strategic aspects, which “non-family” businesses do not have to deal with. These namely include:
- Managing inter-generation transfer – i.e. the process of overtaking the business by the next generation.
- Addressing other issues emanating from close interconnection of functioning of the family and the business:
- Finding ways how to address the issues of growing complexity of ownership relations (typical for the second generation) and interests of particular members of a growing family, arrangement of business management and influence (formal and informal) of particular family members on functioning of a business, namely on decision making on strategic issues. This can be facilitated through a number of more or less formalized bodies (within the so called corporate governance) etc.
- Finding ways how to balance the long term (strategic) needs of the family and the business (financial – e.g. distribution of profits between the firm and the family; time – distribution of time of parents between the firm and children and their education, specifically regarding their healthy personal development, self-realization and interests; relational – employing and rewarding family members etc.).
Strategic management of family businesses is therefore more complex and complicated compared to the “non-family” businesses.
