Family Business: Challanges and Opportunities

2682 words 11 pages

A family business is an enterprise owned, managed, and operated by members of one or several families. Many companies, which were established as family businesses, are now publicly held. Numerous family businesses have non-family members as workforce, but, predominantly in smaller companies, the top positions are frequently allocated to family members.
Family partaking in a business can reinforce the business because family members are very reliable and devoted to the family enterprise. On the other hand managing a family business, and especially succession planning, can cause some unique problems. Frequently family interests clash with business interests, for instance hiring a family member who is less skilled than a
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The survey found no difference between a family-run company and the typical one.


Investing trends come and go. Public ownership has been often condemned for not serving the wellbeing of all shareholders. Currently, investors are being encouraged to think about the benefits of family-owned companies. On the word of the Maine-based Institute for Family-Owned Business, over a third of the listed companies in the Fortune 500 are family-controlled, the same as are nearly half of Italy's 100 biggest companies and a quarter of France's.
There are plenty of examples of successful family-owned businesses. Wal-Mart is still chaired by the eldest son of originator Sam Walton. At the retail giant, the family of the deceased Sam Walton holds around 40 per cent of the shares but its power goes considerably beyond the stake. Under the attentive eye of the family, Wal-Mart has dwarfed the competition, turning into the world's largest retailer thanks to bold acquisitions and innovative strategies. The company's growth has translated into large rewards for both the family and outside investors in the stock, which has more than trebled in price ever since Sam's death in 1992. Another successful company is Cargill, which is a large, family-owned food business with its roots in the pioneer farming lands of America's Midwest. It was established in 1865, and has grown into


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