Answer to Question #318136 in Management for Pema

Question

What are the differences between the workings of a family business, such as Bikanervala, and those of a typical non-family-owned professionally managed business?

Answer 1

Ability to adapt and change more effectively. Family businesses tend to be far more adaptable and can change more swiftly and effectively to changes in the economic climate, within the industries they work within and tune into what their customers want by ensuring they are 'relevant'. management in family firms is less formalized, rational, and standardized than in nonfamily firms. Insofar as professionalism means moving toward a nonfamily business in these senses it entails bureaucratizing. the greatest difference between a family firm and a nonfamily firm is the addition of the family unit. The involvement of family is both an advantage and a disadvantage. It not only can lead to a tremendous competitive advantage but also can be the cause for serious dysfunction and complications.