Advantages and Disadvantages of Family Business

Added on - 16 Sep 2019

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FAMILY BUSINESS
1Table of ContentsIntroduction.................................................................................................................................................2Family businesses........................................................................................................................................2How family businesses affect the company?...............................................................................................2Advantages of family business................................................................................................................3Disadvantages of family business............................................................................................................3Conclusion...................................................................................................................................................3References...................................................................................................................................................5
2IntroductionFamily businesses are considered as those businesses which are unique in shape and structureand are run by people having different personalities, knowledge, values and relationships butwho are members of the same family.Family businessesFamily businesses are generally structured and operate in any of the following ways;1.Owned and operated by only a single individual who is known to be as the founder. It ispossible here that the other family members are later employed by the company.2.Owned and run by many family members, but operated only by the one selected familymembers.3.Owned by many family members who may or may not be involved in the management ofthe business.How family businesses affect the company?It has been observed that the interest of the family members sometimes go contrary to the interestof the company as a whole and this often creates an issue. This issue generally requires both theunderstanding as well as an ongoing communication between the members in order to bring abalance between their personal interest and the interest of the company as a whole (De, 2014).It is worth noting that the family businesses usually involve many combinations of differenttypes of relationships that exist in a family, for example, parent-child relationship, siblings,husband-wife relationship, and these family members may also be involved in the board.