EntrepreneurshipStrengths and weaknesses of family businesses

Entrepreneurship- Strengths and weaknesses of family business Various forms of business patterns exist in market and are practiced throughout the world. While some are purely corporate and no kin relationship based, others are explicitly family oriented businesses where the chain of command and disciplinary authority is transferred within the family generation after generation. Such businesses have their own peculiarities, trends, strengths and weaknesses.
Strengths:
Various features are attributed to the family businesses which primarily include the informal means of conducting the daily operations. Another feature that is often tagged to this kind of business includes the loyalty factor and long term relationship between the company and its employees. The degree of control over inter departmental affairs is relatively strongly managed in family businesses. The culture is considerably flexible, informal and occasional use of local language might be seen in practice. Long term dependencies and affiliations are another feature of family businesses.
Such businesses are not total loss. rather have lots of positives to them. The first and foremost advantage being enjoyed in such cultures is that of trust, reliability and endurance. The chemistry amongst the members of the kin creates a benevolent atmosphere in itself which is very fruitful for the overall working environment.
For many, the family businesses perform much better than other kinds of businesses and evidences have been seen where the throughputs have been far better compared to their non allegiance based enterprises. Weaknesses:
The weak links in any family business often starts with the succession of an individual by a family member which might be compromising in context of the merit and requirements of professional operations. The resistance to change is relatively more deep routed in the company as personal biases are involved directly or indirectly.
The family business environment is often termed as closed loop business atmosphere, since it in contrast to the conventional form of business environment, has relatively related faces around that are more loosely in the organization and business because of personal belonging and affiliations.
The existence of obligation to transfer the power amongst family member regardless of the capabilities and professional experience, this serves as serious draw back in this concept of business world. Meritocracy is often believed to be compromised in such forms of business. Personal enmity and competition in a negative way can be another damning factor in the working environment of an industry.
Factor of consideration, ability to understand the strengths and weaknesses of an individual are easily manageable in cases of family oriented businesses.
Experts view on Family Business:
The exponents of quality and marketing success believe that a professional paradigm is often compromised in this kind of business setup. Since the rules and obligations of professional business norms are not followed and are compromised to some extent due to the family factor, such businesses might not make it to the top of list due to the reasons characteristic of this model of business.
Bottom Line:
A competent company member who has been in the organization for many years might not be able to reach the top rank and be the decision maker just because he is not from the family. Hence this is one of the serious drawbacks in such systems. The doors of transparent and without any hurdle promotion to the highest rank might not be possible. On the other hand, a realistic approach would invite introduction of entrepreneurship in the organization by giving space to the non family member to nurture and come up with his own possibilities that benefit the incumbent business.
Conclusion:
Having discussed the strengths and weakness of family business, certain pre requisites may be advised to such businesses because it can be easily said that the margin for growth, excellence and achieving the degree of entrepreneurship are relatively constrained due to the family hierarchy.
References:
Moores, K amp. Barrett, M 2002, Learning Family Business: Paradoxes and Pathways, Ashgate Publishing, Ltd, Hampshire.
Stewart, A, Lumpkin, GT amp. Katz, JA 2010, Entrepreneurship and Family Business, 12th edn, Emerald Group Publishing.Press.