Why can a family-owned business fail?
It so happens that a very large percentage of automotive dealerships around the world happen to be family-owned businesses. Having said that, there are a great many issues concerning family-owned companies, mainly regarding succession and management, which must be dealt with so that the company can accomplish the goals that the family sets.
Autologica presents a series of articles titled "Common Problems in Family-owned Businesses" based on an interview between J.C. Aimetta, an expert and coach who specializes in family-owned companies, and Al McClymont, CEO of Autologica Dealer Management Systems (www.autologica.net).
J.C. Aimetta is 46 years old and has dedicated the past 15 to helping owners and directors of over 65 family-owned small and medium-sized businesses manage growth, professionalize their management and prevent problems with succession. He has been a negotiator in family conflicts and in the sale of family-owned businesses. Mr. Aimetta teaches the subject in graduate and post-graduate courses in 3 Argentine universities, and has given conferences in Panama, Guatemala, El Salvador, Costa Rica, Colombia, Ecuador and Venezuela.
Here are some thoughts that emerged from the interview.
Al McClymont: I know this is a broad subject to be treated in such a short time, but I hope we can go through some of the main points. The first thing I would like to ask you is: What do you think are the main reasons a family-owned business can fail?
J.C. Aimetta: Well, the main reason is that the owner and manager roles get mixed up. Thus, an endless number of confusions occur as regards to who is the owner and who is the manager, the administrator.
For most family businesses the role is only one. Therefore, whenever you ask someone, Why do you run this business?, the answer is: Because it is mine. And what empowers you to run the business? The fact that it is mine.
Al McClymont: It's also important to analyze this from a management and operational point of view side, for example, when the sons and daughters of the owners reach an age appropriate for them to work in the company.
J.C. Aimetta: Well, what happens is that the new generations evolve and the children inherit the same notion, and believe that they can manage the business simply because they own it. As the children are generally more, two, three, four... a company cannot have four managers. And it is at this moment that most confusions arise.
Another thing to bear in mind is that in the long run the family always grows more than the company. In other words, there are more people intending to live from a business that is not growing as fast as the family. If we also consider the in-laws that sometimes, not always, want to work in the family business, conflicts may arise.
Furthermore, we have to bear in mind that job evaluations are done under emotional parameters. That is to say, whenever a relative is hired, it is very difficult to punish lackluster performance, a poor job. Because an emotional cost is paid, a "happiness" cost.
In a nutshell, a family-owned business maintains a delicate balance between happiness and efficiency, profitability and affection. As the business grows, its owners must try to gently tip the balance to one side. Because it is impossible to simultaneously achieve maximum profitability and maximum happiness, and make the growing family's entire happiness depend on one particular business.
In the next part of this interview, we'll talk about problems that may arise in a family-owned business when one family member wants to sell their share of the company.
Author Bio
Al McClymont is founder and CEO of Autologica S.A.
J.C. Aimetta is a consultant to more than 65 small and medium family-owned businesses.
Article Source: http://www.ArticleGeek.com - Free Website Content
More Resources
Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exitingMore Management Information:
- Group 1
- Group 2
- Group 3
- Group 4
- Group 5
- Group 6
- Group 7
- Group 8
- Group 9
- Group 10
- Group 11
- Group 12
- Group 13
- Group 14
- Group 15
- Group 16
- Group 17
- Group 18
- Group 19
- Group 20
- Group 21
- Group 22
- Group 23
- Group 24
- Group 25
- Group 26
- Group 27
- Group 28
- Group 29
- Group 30
- Group 31
- Group 32
- Group 33
- Group 34
- Group 35
- Group 36
- Group 37
- Group 38
- Group 39
- Group 40
- Group 41
- Group 42
- Group 43
- Group 44
- Group 45
- Group 46
- Group 47
- Group 48
- Group 49
- Group 50
- Group 51
- Group 52
- Group 53
- Group 54
- Group 55
- Group 56
- Group 57
- Group 58
- Group 59
- Group 60
- Group 61
- Group 62
- Group 63
- Group 64
- Group 65
- Group 66
- Group 67
- Group 68
- Group 69
- Group 70
- Group 71
- Group 72
- Group 73
- Group 74
- Group 75
- Group 76
- Group 77
- Group 78
- Group 79
- Group 80
- Group 81
- Group 82
- Group 83
- Group 84
- Group 85
- Group 86
- Group 87
- Group 88
- Group 89
- Group 90
Related Articles
Quick Tip - Effective Meetings Have SMART Goals
The first step in planning an agenda is to identify the goals for the meeting. Properly done, goals have five S M A R T characteristics.
How to Keep a Good Employee: Look, Listen, Learn
Recently a client told me a wonderful story about how a change of attitude helped her to keep a valued employee.Angry and grumbling about one of the provisions in the company policy, the employee asked for a private meeting with my client, the owner of a small sales company, and began to tell her in direct terms what was wrong.
Supplier Sees 53% Reduction in Out-of-Spec Orders Case Study
The goal of perfection is a challenge. It is often viewed as an expensive process requiring large investments.
Creativity and Innovation Management - Feasibility
Creativity can be defined as problem identification and idea generation whilst innovation can be defined as idea selection, development and commercialisation.There are other useful definitions in this field, for example, creativity can be defined as consisting of a number of ideas, a number of diverse ideas and a number of novel ideas.
5 Steps to Continuous Process Improvement
Part One of Creating Well-Defined Processes SeriesWhat if your sales increased from $100,000 to $110,000 per day and your profit increased from $10,000 to $11,000 - did you improve by 10%? The answer might shock you..
3 Steps You Can Use Developing Leaders In Your Industry
With the economy bordering on a recession, every company is looking for ways to increase revenues while decreasing costs. Some companies believe one of the easiest ways to do this is to cut their employee training budget.
Recycling, Reverse Logistics and?..Candy
The candy box is a container for all your favourite chew bars, gum and all your other favourite candy. A must-have for all kids and a great fashion accessory! The marketers are desperate for kids to user their box - so much so that they will soon be giving them away! There will be more about this new development later in this article, but before we get there, please consider HOW we get there: Pressure to Recycle The pressure for us to recycle and reuse goods has been steadily building these past few years and shows no sign of abating.
Learn How To Get The Most From Your Team
Being a leader isn't easy. Every one looks to you to make decisions, resolve disputes, and to carry all the responsibility.
Innovation Management - smart people dont necessarily produce great ideas
Creativity can be defined as problem identification and idea generation whilst innovation can be defined as idea selection, development and commercialisation.There are distinct processes that enhance problem identification and idea generation and, similarly, distinct processes that enhance idea selection, development and commercialisation.
How To Manage A Difficult Employee
Having to manage a difficult employee is never fun and can be the most challenging part of your responsibilities as a business owner/executive. While never easy, this article will address a step-by-step way to consistently and confidently handle the most challenging employee situations.
7 Strategies for Sustained Innovation
The need for constant reinvention is a given in today's business environment. And while a breakthrough product or concept can catapult an organization ahead of its competitors, in these fast-paced times, that advantage is often short-lived.
Change Management: Avoid Havoc In Very Uncertain Times
Escalating gas prices..
Meetings: Don't Just Show Up, Stand Out and Shine
Meetings, whether they're regularly scheduled routines in your company or now-and-then get-togethers, can be a place for you to gain positive visibility and to showcase your capabilities. Here are three strategies that will help you stand out and shine.
Quick Tip - Effective Meetings Earn a Profit
Most people treat meetings as a free resource that can be used to deal with any issue. As a result, huge amounts of time and money are wasted on trivia.
Writing and Revising Your Life Story
Change is not simple. Why do we repeat behavior that doesn't work? Those actions that lead to stifling debt, disappointing careers, or stuck relationships? Then do it harder, yet expect a different result? Why is it not obvious that trying to exit an old story by simply writing a "better ending" only recreates the same story, and ensures that we remain in it? That a thousand better endings to an old story don't create a new story? That the past cannot be changed and is a settled matter? That too often, we see ourselves as the victims of the stories that we author and the feelings we create?We actively construct what we think, feel, and experience.
HRM: Contributing to Well-being or Ill-being at Work?
If you were to take the people out of an organisation you would be left with some stock and machinery that would be of little value, and possibly some property. It is the people that make an organisation function, so having the people functioning to the best of their ability must surely be best for an organisation.
How to Get the Best from Outsourcing
There's a great little article ('Business Lifeforms') on the back pages of the UK's leading management magazine, Management Today each month. It's a spoof (at least I think it is!) about some fictitious key player in a fictitious organisation.
Maximizing Sales through the Ultimate Tracking Software
Every small to mid-sized business owner would love to know how to effectively keep a pulse on their marketing and customer service efforts. The common barrier that all companies run into is how to cost effectively measure and control this process.
Knowledge Management - Lessons Learned and How To Identify Them
Many organisations use the term "lessons learned" to describe the way in which they avoid repeating mistakes, or ensure that they build on past successes, yet a lesson can only be applied if it has been successfully identified, and captured first. Even in "learning organisations" who profess to be good at knowledge management and knowledge sharing, the process for identifying lessons learned can lacks rigour or depth.
Sharing the Reins: 10 Reasons To Sell Your Company To Your Employees
In 1987 I sold my business, South Mountain Company, to my employees (and myself). My sole proprietorship became an employee-owned cooperative corporation.