Answer to Question #98492 in Management for Shusha

Question

Using illustrative examples distinguish between family - first and business - first family businesses and explain the administrative and managerial challenges associated with these enterprises

Answer 1

Family-first businesses prioritize family needs over the productivity and efficiency of a business while Business-first businesses prioritize the productivity and efficiency of a business over the needs of the family. Some of the administrative and managerial challenges that face family-first businesses include non-competent family successors and conflict avoidance. In most cases, the older family members succeed top positions in the businesses despite their competence and qualifications, which lowers the overall performance and productivity of a company. Besides, when family members are in charge of the business they ignore the conflicts that arise from their department and prefer to do what makes them happy and comfortable. Some of the administrative and managerial challenges that business-first business are unhealthy competition and increased risk of losing control of the business. Business-first value competence, which creates imbalanced competition and distrust among family members. It also incorporates qualified successors from outsiders or family members. When top positions are passed to outsiders, a family risks losing control of the business and creates fear among the members.