Smith Family Hardware Est. 1935. Welcome. What Is a Family Business?. Family Business A company in whose ownership and/or functioning two or more members of the same family are directly involved. A firm whose ownership passes from one generation of a family to another. Family Concerns
Smith Family HardwareEst. 1935
Care and nurturing of family members
Employment and advancement in the firm
Loyalty to the family
Production and distribution of goods and/or services
Need for professional management
Effective and efficient operation of the firm
Source: Adapted from W. Gibb Dyer, Jr., Cultural Change in Family Firms (San Francisco: Jossey-Bass, 1986), p. 22.
Child becomes aware of facets of firm and/or industry. Orientation of child by family member is informal.
Child is exposed to business jargon, employees, and the business environment.
Child works as part-time employee. Work becomes more difficult. Includes education and work for other firms.
Entry of Successor
Stage VAdvanced Functional
Potential successor begins work as full-time employee. Includes all nonmanagerial positions.
Potential successor assumes managerial position. Includes all management positions prior to becoming president.
Transfer of Leadership
Stage VIIMature Succession
Successor assumes presidency.
Includes period in which the successor becomes dejure head of company.
Successor becomes defacto head of company.