Challenges And Issues in Managing Family Firms

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Challenges And Issues in Managing Family Firms
Richard Beckhard
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Generally, the family is only interested in the business in regards to the return they are receiving from the business, however there are times when the family might become more involved if their interests are threatened.
Family firms may change fron one pattern to another -- usually in the direction of giving more management responsibility to professional managers. Hence, the "royalist" firm could become a "family owned-mixed management" firm and eventually evolve into a "family-owned-professi
...onally managed" company.
Developmental Stages Organizations go through developmental stages commonly referred to as the "life cycle" of organizations (Greiner, 1972). Our colleague at MIT, Edgar H. Schein, in an unpublished paper, outlines the various stages in the evolution of a family enterprise. These stages are closely related to the management patterns just described and are intended to highlight the fact that "succession" is a complex multi-stage process.
(1) Birth and Early Development (2) Growth -- the period where the entrepreneur realizes that he or she has a going concern and begins to hire a substantial number of people to help the organization to develop: the entrepreneur is still totally in control and functions as everyone's boss with only one or at most two additional layers of management present and probably no more than one hundred or so employees.


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