Advantages and Disadvantages of Running a Family Business (Essay Sample)

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Advantages and Disadvantages of Running a Family Business
A huge number of worlds companies are either family owned or controlled. According to (Alderson, 2011) family businesses are the commonest forms of business in the world. Eighty to ninety percent of American businesses are family owned. Family businesses contribute a huge percentage to the global economy, yet they are the least researched by scholars regarding management sciences. As a result, according to (Die Casting Engineer, 1999) less than ten percent of the family businesses survive past the third generation, and less than ten percent of the owners of these businesses are financially independent by the time they retire from the family businesses. Family businesses offer unique sets of advantages and disadvantages to the people who take part in running them.
A foremost advantage to running a family business is the sense of stability the ownership offers to its participants. According to (Kenyon-Rouvinez & Ward, 2005) family business is loyal to the ideals that were set up by its founder. Even in the absence of the founder, there remains an enduring legacy that the founder leaves behind. In times of crisis, his/her ideals act as a guiding light to the people who succeed him/her. Their dreams are always respected and honoured, and whenever they are contravened, the whole family acts as checks and balances to ensuring their vision and mission are achieved and most often surpassed. Leadership roles are shared according to your position in the family. This results in longevity and as a direct result, stability over a long period.
Running a family business is supported by the loyalty and commitment of the entire family members. This sense of commitment is as a result of family pride and unity being at stake. Family businesses thrive on levels of commitment that are not available to other forms of business entities. By the family businesses being run by a stable workforce and an almost zero employee turnover, the experience and in-depth understanding of the industry the business enjoys enables the business to thrive through good and bad times. Words like, "sorry that is not in my job description," are never heard in a family business setting.
For every action, there is a reaction. No matter how good running a family business and all the advantages that come with it, the disadvantages are just as galvanizing as the advantages are empowering. Family conflicts are the biggest challenges to running a family business. According to (Gordon & Nicholson, 2010) conflict in family businesses settings is often subtle. It manifests itself in different forms such as between parents against their children. The children might feel their parents are not taking them seriously because of their age and inexperience....