AA1:Work experience, news story
Student 601
Module1PPT.pptxSmall Business, Entrepreneurship, & Family Business
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Lecture 1 Outline
What relationship exists between small firms and family firms?
What are the factors for successful succession in family firms?
Do family firms exhibit an entrepreneurial orientation?
What is social entrepreneurship?
Who are social entrepreneurs?
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Small Firms and Family Firms
Many startups are sole proprietorships founded by a single person
If we define family firms as firms where a single family owns over 50% of the firm, the majority of small firms are family businesses.
The primary objective within family firms is to ensure the ongoing job security of employees who are family members.
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Family Business Succession
Succession occurs when the founder hands over the firm to another family member or appoints a professional manager to run the family business.
Factors for successful succession
-- Well-prepared successors
-- Succession planning
-- An open-minded, flexible attitude toward the succession process
-- Mutual trust and a friendly attitude between family members
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Entrepreneurial Orientation within a Family Firm
A recognition or identification of new opportunities
An ability to acquire the resources needed to exploit these opportunities.
The key for family firms being entrepreneurial is the leader.
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Social Entrepreneurship/Entrepreneurs
Social entrepreneurship refers to the work of community, volunteer, public, and private organizations that address unmet social needs within a community.
Social entrepreneurs
-- excel at spotting unmet needs and mobilizing underutilized resources to meet those needs.
-- are driven, determined, ambitious, and charismatic.
-- are driven by a mission rather than profit or shareholder value.
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Lecture 2 Outline
What is a family business?
Who are the family businesses?
What is their economic impact?
What makes family businesses different?
Family Business
Ownership control (15%-20+) by two or more members of a family or a partnership of families
Influence by family members over important decisions related to management of the firm
Focus on family relationships
Vision of continuity across generations
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High profile family businesses
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Family Businesses…
Worldwide:
Represent 80–98% of all businesses in free economies
Generate 64-75% of GDP in most other countries
Employ 50-75% of global working population
Country-Specific:
Represent over 88% of firms in Switzerland and over 95% of firms in Asia and the Middle East
Account for 80% of employment in Italy and India
Number over 17 million businesses in the U.S.
Create about 85% of all new jobs in the U.S.
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The Family Firm Difference
Performance
Generate excess returns on investments
Culture
Business “Capitalistic System”
Family “Socialistic System”
Philanthropic Commitment
Stronger commitment than non-family firms
Family foundations represent 56% of annual giving
Family Presence
Family everywhere, continuity dream, overlap, competitive advantage of family and business interaction
Leadership Stability
Decades vs. less than five years for Fortune 500 companies
Average tenure family business CEO is 18 years vs. 18 months to 3 years for average S&P 500 company CEO
1 Deniz-Deniz, M. & Cabrera-Suarez, K. Journal of Business Ethics, 2005.
2 Lungenana, R. & Ward, J. Family Business Review, 2012.
3 Bain & Co., C. Zook, 2007.
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