Exam 5: The Family Business

People with higher levels of desire- and _____ based commitment are more likely to support efforts to promote change, which is common in small businesses and very important to their performance and survival.

Family retreats are best handled by an outside facilitator, who can help develop an agenda and establish ground rules for discussion.

Describe five features of a family firm that can lead to superior performance of a business.

Family members with a desire-based commitment in the family firm are the least likely to work hard because of their lack of passion for the business.

A family member who believes that joining the business may be the best way to benefit from what the family firm has to offer is revealing a _____ - based commitment.

Discuss the problem of reluctant parents and ambitious children in a family business. Propose solutions.

You Make the Call-Situation 2 Harrison Stevens, second-generation president of a family owned heating and air conditioning business, was concerned about his 19-year-old son, Barry, who worked as a full-time employee in the firm. Although Barry had made it through high school, he had not distinguished himself as a student or shown interest in further education. He was somewhat indifferent in his attitude toward his work, although he did reasonably-or at least minimally-satisfactory work. His father saw Barry as immature and more interested in riding motorcycles than in building a business. Stevens wanted to provide his son with an opportunity for personal development. As he saw it, the process should begin with learning to work hard. If Barry liked the work and showed promise, he might eventually be groomed to take over the business. His father also held a faint hope that hard work might eventually inspire him to get a college education. In trying to achieve these goals, Stevens sensed two problems. The first problem was that Barry obviously lacked proper motivation. The second problem related to his supervision. Supervisors seemed reluctant to be exacting in their demands on Barry. Possibly because they feared antagonizing the boss by being too hard on his son, they allowed Barry to get by with marginal performance.

In Stage I of leadership succession, the pre-business stage, the child begins part-time work in the business.

One weakness of a family business is the tendency of family members to leave quickly when the business "falls on hard times."

Family members with an obligation-based commitment may see their participation in the family business as a birthright that provides great job security.

When a parent retires completely and turns the firm over to a son or daughter, the firm ceases to be a family business.

A document that states the principles intended to guide a family firm through times of crisis and change, including the succession process is called the

Sibling rivalry in a family business

From the children's standpoint, one common reason that they may be reluctant to join the family firm is

_____based commitment may motivate a person to go "beyond the call of duty" to protect or extend his/her financial interests in the company.

One of the "best practices" for the family firm is to promote family members above other, more skilled employees, so that the workers will understand who is really in charge.

The Empyrean Management Group example cited in the text provides an excellent model for how families and their in-laws can work harmoniously, growing a company and a family together.

Those with a _____based commitment, a deep-seated sense of identity with the enterprise, are the most likely to work hard because of their passion for the business.

Family retreats, which open lines of communication,

In Stage II of leadership succession, the introductory stage, the successor becomes acquainted with the family business by playing on the business's premises or around its equipment.