Family Business Essay Example | Topics and Well Written Essays - 2000 words - 1

Family Business - Essay Example Family businesses are observed and viewed as a crucial part of an economy in any country, as they supply substantial contributions to economic growth and revenue development for those countries. Because of this, family businesses can be seen as part of the reason that the world has developed economically as the same families then sell stocks of the companies, which consolidates the businesses even further. It is as a result that family businesses have become some of the world's largest multinationals and conglomerates. Assessing these businesses is a crucial part for any economy in order to look into how these businesses can be made successful, or even fail based on different criteria as mentioned earlier. Family Governance Family governance is the first criteria through which family businesses relative success is measured, in which the measure lies in how the wealth of a family keeps growing or deteriorating in relation to proper management and poor management respectively. This mea sure manifests itself from one generation to the next, in which case it is based on economic factors of different generations and their prevailing economic conditions, which then allow academics to judge how well the businesses are doing (Davis, 2001). It is as a result of this that every generation is expected to play its own key role in running the family businesses and ensure that it does not regress, and should this regression occur, there should be adequate means to bring it back up. Should this family governance criterion fail, it means that a family is under a relative slump, where the business could never recover or is just in a dormant state. Other than this, the concept of family governance looks into ensuring that there is integration between different familial generations in the management of a business, which is just a measure of how the future looks for the company after the current older generation relinquishes its management rights. Looking along the lines of this fa mily governance concept of success determination brings in an aspect of corporate governance, which is similar to how central and federal governments work. As such, there is the question of authority in the business, where there are family gatherings that are focused on the wellbeing of the business and its expansion. This is aimed at the development of policies that are friendly to expansion of assets and communication, as well as revenues, in which there is another aspect of familial values and beliefs that act as guides towards how different members of the family direct and relate to one another in the business (The Sloan Brothers, n.d). This can be defined as the definition of roles for all family members involved in the business, which primarily serves to ensure that there is harmony in different roles, as well as lowering the possibility of familial wrangles over hegemony and authority. Responsibility is fostered in these aspects of assessment, where all family members are exp ected to reflect on their conduct and how it affects the business, which could be positive or negative, but the main feature of assessment is how the organization of the family works (Walsh 2011, p.7). This is as evident in the