CALVINDOL
VIP Contributor
In as much as managing and establishing a family business is more like managing and establishing a normal business however there are some pros and cons involved in managing and establishing a family-owned business or company. Let us briefly considered some of these pros and cons involved in managing a family-owned business or company:
PROS
* Trust: unlike a normal established business organisation, trust in a family business or company is considered to be very strong and reliable. And that is because majority of the employees and workers in the family business are relatives and family members, however it is very hard for mistrust and fraudulent activities to take place.
* Understanding: in a family business, the business manager or director is more likely to understand each and every employee as they are related by blood. The business manager is more likely to assign to each and every employee task and duties fitting to his or her capability and ability.
* Effective communication: unlike normal businesses institutions where communication is kind of restricted between employees and employers. In a family business communication is never restricted as each and every employees as well as superiors are related. Most of the times the business is being operated based on family tradition.
CONS:
* Conflict: this is definitely one of the major disadvantage or demerits of family businesses. As a result of each employee related to each other, conflict is assured to happen, as one family member is likely to say something that belittles the trust as well as the happiness of another employee. Another cause of conflict in a family business is when there is no rules and regulations as a result of each member related to one another.
* Succession planning: unlike normal businesses where is succession is done based on election or appointment. Most times in a family business succession is done based on age, seniority, and headship. This could definitely be a big problem as quarrel and heated arguments are more likely emanate during succession planning.
* Pressure: pressure from family members is definitely the worst thing that can happen to a business manager. And most times in the management and establishment of family businesses, each family member can interfere with the headship of the business. And also each member are more likely to influence the the decision of the business head. Pressure from family members can lead to wrong decision making by the business head.
PROS
* Trust: unlike a normal established business organisation, trust in a family business or company is considered to be very strong and reliable. And that is because majority of the employees and workers in the family business are relatives and family members, however it is very hard for mistrust and fraudulent activities to take place.
* Understanding: in a family business, the business manager or director is more likely to understand each and every employee as they are related by blood. The business manager is more likely to assign to each and every employee task and duties fitting to his or her capability and ability.
* Effective communication: unlike normal businesses institutions where communication is kind of restricted between employees and employers. In a family business communication is never restricted as each and every employees as well as superiors are related. Most of the times the business is being operated based on family tradition.
CONS:
* Conflict: this is definitely one of the major disadvantage or demerits of family businesses. As a result of each employee related to each other, conflict is assured to happen, as one family member is likely to say something that belittles the trust as well as the happiness of another employee. Another cause of conflict in a family business is when there is no rules and regulations as a result of each member related to one another.
* Succession planning: unlike normal businesses where is succession is done based on election or appointment. Most times in a family business succession is done based on age, seniority, and headship. This could definitely be a big problem as quarrel and heated arguments are more likely emanate during succession planning.
* Pressure: pressure from family members is definitely the worst thing that can happen to a business manager. And most times in the management and establishment of family businesses, each family member can interfere with the headship of the business. And also each member are more likely to influence the the decision of the business head. Pressure from family members can lead to wrong decision making by the business head.
