Family businesses have been controlled differently by varying groups of people. The way the previous generations run the business is different from the way it is run after succession. To get a clear understanding of the issue, one hundred Canadian family businesses were studied following their inheritance. The study indicated that every the way the businesses were run differed from one generation to the next. The factors that affected the variations were the readiness to inherit and run the business and the outcome of the venture, in this case, the profits or the loss.
The way different generations run the family businesses is relevant since it helps determine how functional or dysfunctional these ventures are and the effect they have on the economy. The issue helps learn the different things which people should do away with such as bias as it has an adverse effect on the business. A manager may decide to copy the previous family leaders which may not function for the business considering the economic conditions in which the business is operating (Pontet, 2007).
The meaningful of the issue of the family-operated business issue is their success level after they have been inherited. The control measures are variant among generations. It is necessary to learn the previous strategies that were used by the previous businesses to help establish what was successful and what went long. The issue of family business is interesting as it helps compare the performance of a family venture versus a regular business, how the two are run and which is likely to be successful in the real world. To identify the managerial problem, a survey of 100 Canadian family businesses was done to help how they have performed in different generations.
The academic purpose of the article is the establishment of businesses strategies that are inherited from generation to generation and how successful they have been. It helps create a theory on the best strategies that should be passed down for generations to ensure the success of a business. The interesting thing about the issue is that the interests of the successors cannot be established and the impacts it will have on the business. Though the people who take over the business have the expertise, it is hard to establish whether the same competence as the previous owners will be exhibited. In the identification of the academic importance, a study of generational difference was conducted.
The research was conducted using the Levinson's theory of developmental stages. It was determined that age is one of the factors which influence the experience of different generations to the business. Other factors discovered were receptivity to advice and the lessons offered by the elders who previously run the business. Age is a factor that should be tested since not all successors age will affect how they run the family company or influence the outcomes. Using the developmental stages theory was the best as it helped in establishing how the age of the managers affected the outcome of the business at different levels (Pontet, 2007). There are different stages which are passed through when it comes to considering the development of generations in relation to business succession. The knowledge helps in understanding the best stage which a family-business should be passed on to make sure that it does not fail but grows on for the next generation.
Pontet, S. B. (2007). An Exploration of the Generational Differences in Levels of Control Held Among Family Businesses Approaching Succession. Family Business Review, 337-354.
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