EMBA 530 initial post week 9 Essay Example | Topics and Well Written Essays - 500 words

EMBA 530 initial post week 9 - Essay Example One important factor is the use of participative decision making involving all the family members led by the senior members – i.e., the parents in a nuclear unit. This means that family meetings are held on most vital matters, and there is a generally liberal attitude in these collaborations. This factor was linked specifically to the longevity and success of the business (Fahed-Sreih & Djoundourian, 2006). A second important factor in successful family businesses is a resistance to institutionalization (Ayranci, 2010). This does not mean opposition to professionalism, because many of these firms are succeeded by younger family members who have obtained MBAs and formal training. What the family business resists is the formalization of procedures which many call bureaucracy. Family members prefer to maintain a level of informality where they could talk to each other simply and directly despite the difference in their position in the hierarchy. A third factor is ownership preferences, pertaining specifically to higher degrees of ownership concentration in successful family businesses (Hoopes & Miller, 2006). As mentioned earlier, the family business is not necessarily one which is wholly owned by one family; in some cases, those organizations referred to as family business may simply be majority-owned, and some not. Successful family businesses, however, have a higher concentration of ownership held within the family, and the more the ownership is held by family members, the more focused the firm’s strategy is and the more successful it becomes. The fourth important factor is the family’s commitment to change (Davis, 1983). In this rather dated article, a timeless observation was made that family businesses tended to be of two types – those which placed an emphasis on the way things had been done in the family business for decades and would not want to change them, and those which are keen on the changes