Family Business Systems, Highly Self-Demanding


Family business systems are a complex system. Generally, family businesses having large group of people means diverse views and relationships. The differences of interests, age, life situation and also occasional disagreement from time to time may be seen in such systems.

Family businesses have a structural development and a set of norms. They set forums for the entire family in business to follow. This structure exists, regardless of the fact that it is created implicitly or explicitly.

The structural dimensions of a family become insufficient as the business institutions grow beyond a size. To regulate the relationship, it is a must to create spaces to establish rules and for decision making to tackle immediate actions. Thus a family business system considers the family council as the main decision making body and it includes board of directors, corporate governance, management committee, a management body and family constitution, a set of formal rules.

In a family business, the existence of the business is given more importance. Hence the effectiveness depends on the extent to which it satisfies its task. Here, the family develops or maintains an identity and develops systems to provide legitimizing and cohesion roles, thereby defining spheres to take action, make decisions and to establish rules.

In family businesses, the board of directors governs the business. However, specific functions that they do are to lend support to senior management, maintain, develop and control resources and capabilities, monitor senior management, guarantee succession and impose restrictions on the family. They ensure right strategy in developing the resources of the firm and in maintaining family control over the business and its systems.

The family business work is handed over to the next family members who actively participate and involve in the business management. This is due to their professional ability and because they are a family member. Greater is the family presence in decisions, they consider it stronger. This is because this is manifested in aspects such as the top management posts that are owned by a family member and so promotion of family members in the management and executive posts is rewarding.

Family businesses also have accountability. They are a part of all important decisions and have the right to economic returns and in the liquidity of the property. Family accountability depends on the family member who has a post in the company and how he or she exercises the power and this also include the performance level.  There is no doubt that family business systems are always highly self-demanding and hence they develop their business beyond expectations.



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