Family Business
1.0 Introduction and definition of family business Family businesses may have owners who are not family members. Family businesses may also be managed by individuals who are not members of the family. However, family members are often involved in the operations of their family business in some capacity and, in smaller companies, usually one or more family members are the senior officers and managers. Many businesses that are now public companies were family businesses.
2.0 Importance Of Family Business According to the Institute of Family Owned Business’s website, over ninety five per cent of all businesses in the United States are family-owned. Although many family firms are small, many are major corporations including one third of the Fortune 500. Family businesses produce about half of the US gross national product and generate half of the wages paid in this country. Those are impressive statistics. They underscore the importance of family businesses to US economy as well as to our world economy.
Besides, family businesses are reckoned as one of the engines of the post-industrial growth process since they are credited for nurturing across generations entrepreneurial talent, a sense of loyalty to business success, long-term strategic commitment, and corporate independence (Poutziouris, 2001).
Ram (1993) notes that it is the family business that lie at the heart of firms’ social networks. Family business provides the entrepreneur with a unique form of “social capital” that has been shown to be important to the establishment, development and “competitive advantage” of businesses. Family businesses are encouraged to do because it can “break out” of traditional sectors and diversify or move into more profitable areas where markets are not so competitive and economic returns for the entrepreneur and the local economy can be improved. This issue is particularly important given the current interest in the perceived link between diversity and city competitiveness
2.0 Importance Of Family Business According to the Institute of Family Owned Business’s website, over ninety five per cent of all businesses in the United States are family-owned. Although many family firms are small, many are major corporations including one third of the Fortune 500. Family businesses produce about half of the US gross national product and generate half of the wages paid in this country. Those are impressive statistics. They underscore the importance of family businesses to US economy as well as to our world economy.
Besides, family businesses are reckoned as one of the engines of the post-industrial growth process since they are credited for nurturing across generations entrepreneurial talent, a sense of loyalty to business success, long-term strategic commitment, and corporate independence (Poutziouris, 2001).
Ram (1993) notes that it is the family business that lie at the heart of firms’ social networks. Family business provides the entrepreneur with a unique form of “social capital” that has been shown to be important to the establishment, development and “competitive advantage” of businesses. Family businesses are encouraged to do because it can “break out” of traditional sectors and diversify or move into more profitable areas where markets are not so competitive and economic returns for the entrepreneur and the local economy can be improved. This issue is particularly important given the current interest in the perceived link between diversity and city competitiveness