This research proposal deals with gaining a clearer understanding of the aspect of family businesses and its relationship with entrepreneurship. The paper will define the concept of family businesses and cover the historical aspect of family businesses by providing a background of how and when this concept began. The research proposal will also cover the issue of succession planning and its challenges as well as the economical and societal value of family businesses to the society and the world at large.
A family business is one where one or more members of the family have an ownership interest and commitment in the business. A business is said to be a family business if one person is the controlling shareholder of the assets or shares of the company. Individuals who are not members of the family can run family businesses but family members make major decisions concerning the operations of the business. Davis and Taguiri (as cited by Bellet et al, 2005) have provided a more detailed definition of this term.
They define a family business as an organization where two or more extended family members influence the direction of the business by using their family links in management and ownership roles. In the U. S. , Europe, South and Central America, family businesses play an important part in the economy of the country. Families run Ninety percent of businesses in the U. S. Such businesses embody the entrepreneurial spirit of a country.
There have been many misconceptions about family run businesses with many assuming it is a father and mother affair. Although many small micro businesses are family owned there is evidence that many of the large and successful firms emerging in the market are family owned. Examples of successful family businesses that are well known around the world include Ford Motors Company, Gucci, Estee Lauder, Wal-mart stores, Hyundai motors, BMW (Bayerische Motoren Werke), Samsung, Motorola and LG companies (external environment analysis of nestle 2005).
Colli (2002, p. 9), views family businesses as only one of the initial stages in the life cycle of an organization. His definition of the family business is that it is a firm in which property and control are firmly entwined and where family members are involved in both the strategic and day-to-day decision-making activities and operations of the business. Background of the concept of Family Business From a historian’s point of view, family businesses are not that new.
The concept first emerged in the manufacturing industry of the United States between the 1870s and the 1890s. It stimulated by the technological advancements and innovations in the transport and production sector, which referred to as the second industrial revolution. Chandler and Hikino (as cited by Colli, 2002) noted that the family business concept then spread to the capital intensive industries that dealt with transport, chemicals production, electrical products, petroleum refinery and some areas of the food and beverage industry.
A family business is one where one or more members of the family have an ownership interest and commitment in the business. A business is said to be a family business if one person is the controlling shareholder of the assets or shares of the company. Individuals who are not members of the family can run family businesses but family members make major decisions concerning the operations of the business. Davis and Taguiri (as cited by Bellet et al, 2005) have provided a more detailed definition of this term.
They define a family business as an organization where two or more extended family members influence the direction of the business by using their family links in management and ownership roles. In the U. S. , Europe, South and Central America, family businesses play an important part in the economy of the country. Families run Ninety percent of businesses in the U. S. Such businesses embody the entrepreneurial spirit of a country.
There have been many misconceptions about family run businesses with many assuming it is a father and mother affair. Although many small micro businesses are family owned there is evidence that many of the large and successful firms emerging in the market are family owned. Examples of successful family businesses that are well known around the world include Ford Motors Company, Gucci, Estee Lauder, Wal-mart stores, Hyundai motors, BMW (Bayerische Motoren Werke), Samsung, Motorola and LG companies (external environment analysis of nestle 2005).
Colli (2002, p. 9), views family businesses as only one of the initial stages in the life cycle of an organization. His definition of the family business is that it is a firm in which property and control are firmly entwined and where family members are involved in both the strategic and day-to-day decision-making activities and operations of the business. Background of the concept of Family Business From a historian’s point of view, family businesses are not that new.
The concept first emerged in the manufacturing industry of the United States between the 1870s and the 1890s. It stimulated by the technological advancements and innovations in the transport and production sector, which referred to as the second industrial revolution. Chandler and Hikino (as cited by Colli, 2002) noted that the family business concept then spread to the capital intensive industries that dealt with transport, chemicals production, electrical products, petroleum refinery and some areas of the food and beverage industry.
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