1. Discuss the merits and demerits of family businesses?
An enterprise which in practice, is controlled by members of a single family.
(Barry 1975)
A family business is a business in which one or more members of one or more families have a significant ownership interest and significant commitments toward the business’ overall well-being. A Family-owned business is one that is owned and managed (that is controlled) by one or more family members.
1 Family-owned firms are – “organizations where two or more extended family members influence the directions of the business through the exercise of kinship ties, management roles, or ownership rights.”
2 A family – owned business is any business in which a majority of the ownership or control lies within a family. It is also a complex, dual system consisting of the family and the business. Members involved in the business are part of a task system and also a part of a family system and these two systems may overlap.
3 Family – owned businesses exist all over the world and some of the world’s oldest firms are family- owned eg. Kongo Gumi of Japan was founded in 578 AD and is currently managed by the 30th generation. Some of the largest wealth creators and businesses are family owned like Wal Mart.
4 In India too, the highest generator and creator of wealth are family – owned businesses. The issues faced and the interests involved by family-owned businesses all over the world are more or less the same.
In a family business, one or more members within the management team are drawn from the owning family. Family businesses can have owners who are not family members. Family businesses may also be managed by individuals who are not members of the family. However, family members are often involved in the operations of their family business in some capacity and, in smaller companies, usually one or more family members are the senior officers and managers. Many businesses that are now public companies were family...