Embed Size (px)
Citation preview
BA 365 - Family Business Management
E-campus, Spring 2010
Instructor: Robin Klemm, Ph.D.
A. E. Coleman Chair in Family Business
Director, Austin Family Business Program
Bio: http://www.bus.oregonstate.edu/faculty/bio.htm?UserName=robin.klemm
541-737-6017
GTA: Sean M. Krause 541-207-3136
Office: Austin Family Business Program
201 Bexell Hall, OSU
Corvallis, OR 97331-2603
Melissa Elmore, Office Manager 541-737-3326
Dear Students:
Welcome to BA 365 – Family Business Management. Family businesses make up 80 to 95% of businesses worldwide. In the United States we generally use the figure over 80% and in the Northwest the figure is over 90%. That means that almost every student will experience one or more of the following:
Own a family business Work for a family business Have a family business as a customer, client Have a family business as a supplier, distributer Experience competition with a family business
For this reason I have crafted a resource-rich experience that will take you
well beyond the boundaries of a 4 credit course. Long after the grade is on your
transcript, you will be connected to learning resources that will offer constant
value.
The readings are as diverse as the subject, packed with expertise, and range
from classic publications to some that have just become available in the last few
weeks. I have structured this course to actively engage your ever-expanding
capacity to understand family businesses. The quizzes are an essential
housekeeping element.
The discussions offer an opportunity to share your understanding and
experience with your fellow students. This course is available nationally and
is especially valuable for future family business leaders and family business
advisors (accountants, lawyers, financial advisors, insurance agents,
management consultants, and family therapists).
Finally, the Applications were designed to challenge you to apply the concepts
you have learned and discussed to make a difference for family businesses. I
hope you will find these Applications interesting.
Sean Krause, your first point of contact in this course, is an MBA candidate at
OSU College of Business. He was an honors graduate in Business
Administration from OSU, and has over a decade of experience in
Management positions.
Please do not hesitate to share with us how this course is working for you.
Best regards,
Robin Klemm
Family Business Management
Family businesses are characterized by distinct core competencies that can result in unique
competitive advantages. They take a long run view of the business—across generations, rather
than publicly traded quarterly reports. Their capital can be very patient, owners will sacrifice
their salaries in order to make payroll, and they are an integral part of their communities, unlike
publicly traded counterparts that might abandon a community at the blink of a budget. They can
engender a great deal of loyalty on the part of employees, and the existence of family may reduce
agency problems.
Family Businesses also face challenges that threaten their continuity. The challenges are
primarily the result of issues presented by the interaction of family, management, and
ownership—particularly where the family wishes to perpetuate its influence and/or control from
generation to generation. Family firms seem to be as agile in one generation as they are fragile
across generations.
Family businesses start with an owner-managed first generation (usually an entrepreneur).
The next generation—G2—is the sibling generation, and G3 is the cousins era. The probability
of passing the company to the next generation diminishes significantly, with fewer than half
making it to G2 and only about 12% making it to G3. So, despite the benefits of family, there
can be some significant issues.
The course explores and analyzes family business continuity challenges and best
management practices. The focus of this course is on pragmatic, action-oriented, management,
governance, and family/business leadership skills.
Learning Outcomes
The course addresses the management of established family business. It examines succession,
values, life cycles, marketing strategies, conflict resolution, communications, legal, and financial
aspects, estate planning, governance, philanthropy and other topics that uniquely touch family
business management. It will convey the characteristics that differentiate family businesses from
other businesses.
Upon completion of this course, students should understand:
the unique assets and vulnerabilities of family enterprises.
the role of the CEO in governance, management, and the transfer of power
the relationship between the role of the board, the family council, and top management in
providing effective governance for family business continuity
key family dynamics
and be able to:
Identify the various stakeholders and the role of trust among family members and their
impact on succession and continuity
Discuss the developmental needs and challenges of next generation leaders
Analyze the effect of estate taxes on ownership transfer across generations of family
business owners and the implications of ownership structures on the competitive
advantages of family businesses
Explain the importance of strategic planning to family business continuity
Explore the critical role and challenges that non-family managers play in family-owned
operations
Analyze the impact of family culture, family communication, family conflict, and family
unity and explore their interaction effects on the family business
Course Topics:
Week 1: Family Business System
Week 2: Structure and Life Cycles
Week 3: Communication & Conflict I
Week 4: Communication & Conflict II
Week 5: Succession
Week 6: Strategy, Innovation, and Planning
Week 7: Leadership, Management, and Non-family Personnel
Week 8: Financial and Estate planning
Week 9: Governance, Boards, and Stewardship
Week 10: Family offices, Resources, Research, and Future
Professional Resources:
The Family Firm Institute, http://ffi.org , is the major professional association for those in the
family business field. It certifies family business advisors and sets standards through their Book
of Knowledge. In their words: ―The Family Firm Institute (FFI) is an international professional
membership organization dedicated to providing interdisciplinary education and networking
opportunities for family business advisors, consultants, educators, and researchers and to raising
public awareness about trends and developments in the family business field.‖ FFI published the
Family Business Review.
The Family Enterprise Research Conference (FERC) http://johnmolson.concordia.ca/faculty-
research/research-centres/family-enterprise-rsrch-conference was co-founded by the Austin
Family Business Program. ―The Family Enterprise Research Conference is dedicated to
developing a community of scholars interested in conducting research into understanding family
firms and creating usable knowledge in this field. ―
COURSE REQUIREMENTS
I. Readings
2. Discussions
3. Quizzes
4. Applications
I. Readings
Textbooks--Primary
Hoover, E.A. and Hoover, C.L. Getting Along in Family Business; The Relationship
Intelligence Handbook, New York, NY: Routledge, 1999.
Aronoff, C.E., Ward, J.L. Family Business Governance: Maximizing Family and
Business Potential, Marietta, GA: Family Enterprise Publishers, 1996.
Aronoff, C.E., McClure, S. L., and Ward, J.L. Family Business Succession: The Final
Test of Greatness, Second Edition. Marietta, GA: Family Enterprise Publishers, 2003.
deVisscher, F.M., Aronoff, C.E., and Ward. J.L. Financing Transitions: Managing
Capital and Liquidity in the Family Business, Second Edition. Marietta, GA: Family
Enterprise Publishers, 2008.
Schuman, A.M. Nuturing the Talent to Nurture the Legacy: Career Development in the
Family Business, Marietta, GA: Family Enterprise Publishers, 2004.
Hartley, B.B. and Griffith, G. Family Wealth Transition Planning; Advising Families
with Small Businesses, New York: Bloomberg Press, 2009.
Hausner, L. and Freeman, D.K. The Legacy Family: The definitive guide to creating a
successful multigenerational family, New York: Palgrave, 2009.
Textbooks—Secondary
Readings will be assigned from each of the following texts. While these readings will be
available to you on blackboard for your convenience, I have included the references below. I
encourage those students who are from family businesses and those students advising family
businesses (accountants, lawyers, financial advisors, bankers, insurance agents, consultants) to
read more in each of these excellent texts.
Aronoff, C.E. and Ward, J.L. From Siblings to Cousins: Prospering in the Third Generation
and Beyond, Marietta, GA: Family Enterprise Publishers, 2007.
Aronoff, C.E., Astrachan, J.H., et.al. Making Sibling Teams Work: the Next Generation.
Marietta, GA: Family Enterprise Publishers, 1997.
Bork, D., Jaffe, D.T., Lane, S.H., et.al. (Aspen Family Business Group). Working with
Family Businesses: A Guide for Professionals, San Francisco, CA: Jossey-Bass, Inc., 1996.
Carlock, R.S., and Ward, J.L. Strategic Planning for the Family Business: Parallel
Planning to Unify the Family and Business, New York, NY: Palgrave, 2001.
Fishman, A.E. 9 Elements of Family Success: A proven formula for improving leadership &
relationships in family business, New York, NY: McGraw Hill, 2009.
Gersick, K. E., Davis, J. A., Hampton, M. M., and Lansberg, I. Generation to Generation:
Life Cycles of the Family Business. Boston, MA: Harvard Business School Press, 1997.
Gordon, G. and Nicholson, N. Family Wars: Classic conflicts in family business and how to
deal with them, Philadelphia, PA: Kogan Page, 2008.
Jaffe, D. T. Working with the Ones You Love: Strategies for a Successful Family Business.
Berkeley, CA: Conari Press, 1991.
Kaslow, Florence W., editor. Handbook of Family Business and Family Business
Consultation; A Global Perspective, New York: International Business Press, 2006.
Kets de Vries, M.F.R. and Carlock, R.S. Family Business on the Couch: A psychological
perscpective, West Sussex, England: John Wiley & Sons, Ltd., 2007.
Lansberg, I. Succeeding Generations: Realizing the Dream of Families in Business. Boston,
MA: Harvard Business School Press, 1999.
Poza, E. J. Family Business, Second Edition. Mason, OH: Thomson South-Western, 2006.
Ward, J.L. Creating Effective Boards for Private enterprises: meeting the challenges of
continuity and competition. San Francisco, CA: Jossey-Bass, Inc., 1991.
Ward, J.L. Perpetuating the Family Business: 50 Lessons Learned from Long-Lasting,
Successful Families in business. New York, NY: Palgrave Macmillan, 2004.
Ward, J.L., editor. Unconventional Wisdom; Counterintuitive Insights for Family Business
Success, West Sussex, England: John Wiley and Sons, Ltd., 2005.
Woodman, B.E. and Hartley, M.T. Master Plan: The magic of integrating your financial,
legal, and life planning, Venice, FL: Cambio Press LLC, 2006.
Reference Periodicals
Family Business and Family Business Agenda - each published quarterly. Philadelphia, PA:
Family Business Publishing Company. (e newsletter available 2x monthly)
Families in Business – published 6x year. UK: Campden Publishing Ltd. (supported by the
Family Business Network)
Family Business Review – published quarterly. Boston, MA: Family Firm Institute, Inc.
2. Discussions
You will be assigned a discussion group of no more than 10 students. Discussions will be in two parts; a
posting to a topic/question (due by 10 pm Wednesday), and response to another student’s posting (due
by 10 pm Saturday). You can earn up to 20 points total for each discussion (up to 10 points for your
posting, and up to 10 points for your reply to another student’s posting). The criterion for earning points
is listed below.
Each week, you are responsible to post a reply to a discussion topic/question. The discussion
topic/question will be based on the readings assignments for the week. You will need to complete the
readings and then post a response to the week’s discussion topic/question, which should include reference
to the readings, by 10 pm Wednesday.
For the second part of the weekly discussions, you are responsible for replying to a minimum of one other
student’s posting within your discussion group. You will be required to provide thoughtful feedback to
the other student’s posting as well as referring to the weekly readings. Your reply will be due by 10 pm
Saturday.
Posting Points:
Points Criteria
8-10 The student’s posting is well developed and shows evidence of understanding the discussion
topic. The student uses concepts presented in the readings within their posting. The student’s
posting provides clear evidence of critical thinking and their observations/questions add to the
discussion by providing new ideas to the discussion topic/question.
6-8 The student’s posting shows some development and evidence of understanding the readings and
discussion topic. The posting shows some evidence of critical thinking. The student’s posting
adds to the discussion topic/question.
3-6 The student’s posting shows nominal understanding of the readings and discussion topic. The
contribution does not add to the discussion topic/question.
0-3 The student’s posting does not show an understanding of the readings or discussion topic. The
student reiterates ideas/concepts presented in the readings, with lack of critical thinking. The
thoughts and ideas presented detract from the discussion topic/question.
Reply Points:
Points Criteria
8-10 The student’s reply to another student’s posting provides thoughtful insight of the concepts
presented in the readings. The student’s reply shows evidence of critical thinking about the
discussion topic/question. The student uses concepts presented in the readings to add clarification
to the other student’s questions or thoughts. The student’s reply adds to the discussion by
providing new ideas.
6-8 The student’s reply to another student’s posting shows some evidence of critical thinking about
the discussion topic/question. The student’s reply minimally helps to clarify the other student’s
questions or thoughts posted. The reply shows some evidence of critical thinking. The student’s
3. Quizzes
4. Applications
reply minimally adds to the discussion topic/question.
3-6 The student’s reply to another student’s posting shows nominal understanding of the readings
and discussion topic. The contribution does not add to the discussion topic/question.
0-3 The student’s reply to another student’s posting does not show an understanding of the readings
or discussion topic. The student reiterates ideas/concepts presented in the readings, with lack of
critical thinking. The thoughts and ideas presented detract from the discussion topic/question.
Each week, you are required to complete a quiz over that week’s reading assignments. You are expected
to have read and thought about the material before you take the quiz. The quizzes will consist of 10
questions, 7 multiple choice and 3 short answer. Each question will be worth 2 points for a total of 20
points per quiz.
The quizzes may or may not be timed. You will not know if the quiz is timed until you log in to take the
quiz. For those quizzes that are timed, you will have 30 minutes to complete the quiz.
You will have only one attempt per quiz. The quizzes will be open to the student beginning at 8 am on
Thursday. You must complete the quiz by 10 pm on Sunday. If you have an issue while taking the
quiz, it is your responsibility to contact the instructor/graduate assistant via email as soon as possible.
*Note: At the end of the term, we will drop your lowest grade for the
discussion postings and quiz.
Applications:
Applications are assigned on a Friday and are due two weeks later on Friday at 10:00 pm.
Applications #1 is assigned on Monday and is due the second Friday at 10:00 pm (see the Course
Schedule for dates). All Applications are available at the end of this syllabus.
Course Mechanics
And Evaluation
Grading
Quizzes--10 180 points (lowest grade dropped)
Online discussion—10/10 180 points (lowest grade dropped)
Applications--5 900 (180 each)
Grading Scale
A 1159 - 1260 B 1033 - 1089 C 907- 927 D 781- 855
A- 1134 - 1158 B- 1008 - 1032 C- 882 - 906 D- 756 - 780
B+ 1090 - 1133 C+ 928 - 1007 D+ 856 - 881 F Lower than 755
_____________________________________________________________________________________
INCOMPLETE WORK:
By taking this course, you have implicitly agreed to do the readings each week, engage in two
online discussions per week, answer one quiz per week, and to send in one Application every
two weeks. There is some latitude in accomplishing these tasks and dropping the lowest weekly
discussion and quiz grades will create additional flexibility, if you use it wisely. The
Applications have a two week time frame and require planning on your part.
Flus, colds, pets passing away, skiing accidents, vacations, missed planes, your birthday, noisy
roommates, and cranky computers are part of everyday living and do not constitute a reason for
anyone to be given extra time to complete work. Only verifiable emergencies and catastrophes,
communicated in a timely manner and with work-to-date submitted at the time, will be
considered. Incompletes are given after review and agreement by a team of outside faculty
members) that the situation warrants an incomplete.
ACADEMIC INTEGRITY AND CHEATING POLICY:
Any case of academic dishonesty will result in a grade of F for the course. If you have any
questions about what constitutes academic dishonesty, review the Academic Dishonesty section
under Student Conduct Regulations on the OSU Student Conduct & Community Standards web
site (http://oregonstate.edu/admin/stucon/achon.htm).
STUDENTS WITH DISABILITIES:
Accommodations are collaborative efforts between students, faculty and Disability Access
Services (DAS). Students with accommodations approved through DAS are responsible for
contacting the faculty member in charge of the course prior to or during the first week of the
term to discuss accommodations. Students who believe they are eligible for accommodations but
who have not yet obtained approval through DAS should contact DAS immediately at 737-4098.
Course Schedule
Note: Additions and changes to this schedule may be made during the quarter.
Information will be posted on Blackboard.
Mar 29 –
Apr 4
Family Business Systems Week 1
Readings (Textbook)
Hoover & Hoover, Getting Along in Family Business, pp 1-60
Hausner & Freeman, The Legacy Family, pp vii-ix, 1-23, and Appendix 2 pp 168-
175
Readings (Blackboard)
Ward, Perpetuating…, pp 1-30
―Family Charter‖, Family Business Magazine, Autumn 2008, pp 30-31
Discussion Post Due by 10 pm Mar 31
Discussion topic: ―Family businesses add complexity to managing in some areas and
decrease uncertainty in other areas.‖ Discuss the potential advantages and
disadvantages inherent in a family business structure. Cite your readings
Discussion Reply Due by 10 pm Apr 3
Quiz Available 8 am Apr 1 to 10 pm Apr 4
Application #1 Assigned
Apr 5 –
Apr 11
Structure and Life Cycles Week 2
Readings (Textbook)
Hoover & Hoover, Getting Along in Family Business, pp. 123-163
Hartley & Griffith, Family Wealth Transition Planning, Chapter 1 pp 5-28
Readings (Blackboard)
Ward, Perpetuating…, pp. 31-39, 156-160
http://ffi.org/default.asp?id=323, click on ―America’s 150 largest businesses‖ and
peruse the list
Discussion Post Due by 10 pm Apr 7
Discussion topic: Click on the link in the assignments tab and examine the list of
America’s 150 largest businesses. Take a look at the different companies and detail
the similarities that you find. How does the structure of these companies resemble
the structure presented within the readings for this week? Cite your readings.
Discussion Reply Due by 10 pm Apr 10
Quiz Available 8 am Apr 8 to 10 pm Apr 11
Application #1 Due Due by 10 pm Apr 9
Application #2 Assigned
Apr 12 –
Apr 18
Communication & Conflict I Week 3
Readings (Blackboard)
Family Wars… Ch. 1 & 2 and Ch. 9
―Best Foot Forward‖, Time Style & Design, Winter 2007, pp. 60-63
―Sibling Compensation‖, Family Business Agenda, 2007, pp. 24, 26-27
Paul, Joseph. ―Glossary of Family Systems Concepts Applied to Family
Businesses.‖ in Kaslow, Handbook of Family Business.., pp. 419-425
―The Disruptive In-law‖, Families in Business, May/June 2006, pp. 58-59
Kets de Vries, Family Business on the Couch, Ch. 9, ―Diagnosing Family
Entanglements‖, pp. 165-186.
Discussion Post Due by 10 pm Apr 14
Discussion topic: "A spouse is a visitor to the family--necessary to the process of
creating a new generation of the family--but not really part of it." Dennis Jaffe.
Please comment on this statement as it relates to this week's readings.
Discussion Reply Due by 10 pm Apr 17
Quiz Available 8 am Apr 15 to 10 pm Apr 18
Apr 19 –
Apr 25
Communication & Conflict II Week 4
Readings (Blackboard)
Jaffee, Working with… pp. 84-118
Making Sibling Teams… pp. 1-11, 21-27
From Siblings to Cousins… pp. 1-18
―Chief Emotional Officer‖, Family Business Magazine, Summer 2008, pp. 30-31 &
36
―At the Helm: Rick Smith‖, Family Business Magazine, Winter 2008, p.14
―Cultivating Ownership in the Next Generation‖, Family Business Magazine,
Winter 2008, pp. 38-39
Discussion Post Due by 10 pm Apr 21
Discussion topic: Extreme conflict in a family business is often a death knell for the
business. For the businesses fortunate enough to recover, what does it take to
recover from extreme conflict? What can all family businesses learn from the
extremes of others? Please sight examples from your reading when addressing the
issue of recovery and learning.
Discussion Reply Due by 10 pm Apr 24
Quiz Available 8 am Apr 22 to 10 pm Apr 25
Application #2 Due Due by 10 pm Jan Apr 23
Application #3 Assigned
Apr 26 –
May 2
Succession Week 5
Readings (Textbook)
Aronoff, et. al, Family Business Succession… pp. 1-61
Hausner & Freeman The Legacy Family Chapter 11 pp 123-136
Schuman, Nurturing the Talent… pp. 1-38 & 49-57
Readings (Blackboard)
―Succession Challenges‖, Family Business Magazine, Summer 2008, pp. 70-73
Leif, Colleen and John L. Ward, ―Counterintuitive Insights‖ in Ward,
Unconventional Wisdom. Pp. 231-237
Discussion Post Due by 10 pm Apr 28
Discussion topic: Two of the toughest issues in succession planning are the transfer of
authority (when, to whom, how) and the complete revelation of the financials.
Why would these be such sticky points? How do family businesses work through
these issues?
Discussion Reply Due by 10 pm May 1
Quiz Available 8 am Apr 29 to 10 pm May 2
May 3 –
May 9
Strategy, Innovation, and Planning Week 6
Readings (Blackboard)
Borke, Jaffee, Working with.. pp. 163-182 (carryover from last week)
Gersick, Generation to…, pp. 103-131
―The Reinvigoration of Gallo‖, Family Business Magazine, Autumn 2008, pp. 42-
45.
―Leaving Our House in Order‖, Family Business Magazine, Winter2008, pp. 65-67.
Ward, Strategic Planning..., Chapter 1, pp3-23
Discussion Post Due by 10 pm May 5
Discussion topic: Trace the role of innovation through the family business life cycle.
Given the necessity for innovation, how does each generation foster innovation?
How does a family business insure innovation?
Discussion Reply Due by 10 pm May 8
Quiz Available 8 am May 6 to 10 pm May 9
Application #3 Due Due by 10 pm May 7
Application #4 Assigned
May 10 –
May 16
Leadership, Management, and Non-family
Personnel
Week 7
Readings (Textbook)
Hoover & Hoover, Getting Along in Family Business, pp. 183-201
Readings (Blackboard)
Poza, Family Business…, pp. 207-222
―At the Helm: Gert Boyle‖, Family Business Magazine, Winter 2009, p. 14
―Deep-seated commitment‖, Family Business Agenda, Autumn 2007, pp. 38-41
Fishman, 9 Elements of Family… ‖Retaining non-family employees‖, pp. 199-227
Discussion Post Due by 10 pm May 12
Discussion topic: Leadership in a family business is more challenging than in a non-
family business. This is true for both family executives and non-family executives.
Discuss the challenges that family business leaders in a family business and non-
family business leaders in a family business face. Please refer to your readings in
your comments.
Discussion Reply Due by 10 pm May 15
Quiz Available 8 am May 13 to 10 pm May 16
May 17 –
May 23
Financial and Estate planning Week 8
Readings (Textbook)
deVisscher, et. al, Financing Transitions…pp. 1-79
Hausner & Freeman, The Legacy Family, Ch 6 & 7 pp59 – 83 & Appendix 9
pp195-197
Readings (Blackboard)
―Banking on Family Ownership‖, Family Business Magazine, Autumn 2008, pp.
53-56
―Relatives and liquidity‖, Family Business Magazine, Winter 2008, pp. 30-31, 37
Discussion Post Due by 10 pm May 19
Discussion topic: Capital and Liquidity are particularly tough issues as the family
business matures, because they are so often in conflict. Identify and explain points
of conflict and multiple solutions for each.
Discussion Reply Due by 10 pm May 22
Quiz Available 8 am May 20 to 10 pm May 23
Application #4 Due Due by 10 pm May 21
Application #5 Assigned
May 24 –
May 30
Governance, Boards, and Stewardship Week 9
Readings (Textbook)
Hoover & Hoover, Getting Along in Family Business, pp. 165-173
Aronoff, et. al, Family Business Governance…pp. 1-54
Hartley & Griffith, Family Wealth Transition Planning,, Chapter 9 pp. 203-232
Readings (Blackboard)
―Family Council‖, Family Business Magazine, Winter 2009, pp. 48-51
―Keeping Shareholders Happy‖, Family Business Magazine, Autumn 2008, pp. 68-
71
Discussion Post Due by 10 pm May 26
Discussion topic: For some Next Generation family members, the siren of the wide
world is compelling. But after a number of years (sometimes as many as 10 or 15),
Next Generation members ask themselves ―Why am I working to make profits for
someone else when I could be working to make profits for my family and me?‖ For
the family business, profits are a source of capital for new ventures, buffer for
challenging times, and a means to reward dedicated employees (both family and
non family). For non-working family business owners, profits are a source of
income.
Please discuss the complex interplay of Governance, Boards, Stewardship, and
profits in the family business.
Discussion Reply Due by 10 pm May 29
Quiz Available 8 am May 27 to 10 pm May 30
May 31 –
June 6
Family offices, Resources, Research, and Future Week 10
Readings (Textbook)
Hartley & Griffith, Family Wealth Transition Planning, Chapters 3 & 4 pp. 47-96
Readings (Blackboard)
―Continuity Through Change‖, Family Business Magazine, Summer 2008, pp. 48-
52
Wealth Management ―A process for managing wealth and well being‖, Family
Business Magazine, Winter 2008, pp. 32-33
―Top 10 mistakes to avoid when selling your family firm‖, Family Business
Agenda, Autumn 2008, pp. 32-33, 36
Lansberg, Succeeding…, ―Letting Go‖, pp. 249-273
Woodman, Master Plan, Ch 4, pp 33-41
Readings (Optional Blackboard)
Gersick, Generation to…pp 251-272 (consulting to family businesses)
Discussion Post Due by 10 pm June 2
Discussion topic: The sale or the transfer of the family business to the next generation
brings about many issues of emotions and money.
Examine these two variables from the point of view of the exiting generation and
the next generation.
Discussion Reply Due by 10 pm June 5
Quiz Available 8 am June 3 to 10 pm June 6
Application #5 Due Due by 10 pm June 4
Family Charter Application #1
A Family Charter ―is a written statement about the guiding philosophy and values of the family,
its priorities, principles and aspirations‖ according to Hoover and Hoover. The family business
charter provides a distinction between the family and the business while providing objectives and
rules that govern the business.
For this first application, please invent a family business. In a few brief paragraphs describe the
business – size, industry, products or
services, current generation, family
participants, ect.
Next, using a charter format, please write an
appropriate Family Charter. For the family
charter, use the information from this week’s
readings, the article from Temperton and
Associates, LTD, and the article ―The family
charter: A GPS to guide your firm’s future‖
by Frankenberg from week one’s readings.
(Use the article by Frankenberg to answer
questions that HELP to develop the family
charter.) When writing the Family Charter,
use sections to separate the different parts of
the charter. Provide a Works Cited page at
the end of your paper.
Link to Temperton Article
Reliance Industries Application # 2
For our second application, we turn to the analysis of a case—
Reliance Industries. The Ambani family is the richest family
business in the world. Unfortunately, all that money does not
insure best practices in family business. I have provided two write-
ups of this case—one from a family business management text and
one from Family Wars, a recent Billionaires ranking for the two
brothers—5th
and 6th
, and a picture of Mukesh’s new house (to the
left).
1. Please examine the role of the parents in Reliance Industries.
Using your readings to date, analyze the communication,
relationships, culture, communication styles, and other appropriate
topics. Consider the successor development and the succession
plan. This is a very complex situation with sometimes subtle
messaging. Please do not be superficial in your treatment of the
issues.
2. Was the succession to the next generation successful or not?
…From a family point of view?
…From a business point of view? Please elaborate on your
opinions, citing facts from the case and lessons from your assigned
readings. Would Dhirubhai be proud of his boys? Why or why
not?
3. Please sum your analysis, and then cite your ―take-aways‖ from
this case.
Succession Plan Application # 3
In order for family businesses to continue to grow beyond the first
generation, a succession plan needs to be developed. According to
the Encyclopedia of Small Business, ―A succession plan is a
written document that provides for the continued operation of a
business in the event that the owner—or a key member of the
management team—leaves the company, is terminated, retires, or
dies. It details the changes that will take place as leadership is
transferred from one generation to the next‖
(http://www.referenceforbusiness.com/small/Sm-Z/Succession-
Plans.html). But succession planning is more than just a written document. ―Succession is a lifelong
process of planning and management that encompasses a wide range of steps aimed at ensuring the
continuity of the business through the generations‖ (Ward and Aronoff). Developing a succession plan is
not something that is done overnight. Instead, according to Ward and Aronoff, a succession plan should
be developed 5-15 years prior to the actual transfer of ownership.
For Application #3, you are to develop a succession plan for the family business that you used in
Application #1. Using the information presented in the readings, develop a succession plan that identifies
the different steps required for a smooth transition of ownership from one generation to the next. This
includes having a contingency plan for untimely emergencies. In your succession plan, make sure you
identify how to prepare the CEO, the business, the family, and the ownership team for the transfer along
with the development of the successor. Use your readings and the websites listed below to help you
develop your succession plan.
When writing you paper, begin by giving a brief description of the business. What does the business do?
How many employees (family & non-family)? What generation is the business in? When writing the
actual succession plan, use sections within your paper to separate the different parts of the plan. Please
provide a Works Cited page at the end of your paper.
Succession Planning Websites:
Encyclopedia of Small Business
Smart Business
About.com: Family Business Succession Planning
Sigma Motion Inc. Application #4
Is the family a resource or a cost to an enterprise needing to remain healthy and competitive?
This is a vital question for any family owned business that wants to remain competitive in their respective
industries. For this application, you will be reading about an established family business that has seen
some significant growth and is close to approaching the time for succession. You will be exploring the
overlaps between family, ownership, and management subsystems. Present in this case are the
competitive dynamics in the industry, general transition in management, sibling rivalry, and ownership
transition.
For this application, you will read the Sigma Motion, Inc. case study. After reading the case study, you
will need to write up a case analysis while answering the questions listed at the end of the case. When
writing up your case analysis, refer to your readings and lessons. Make sure that you cite your sources and
provide a Works Cited page at the end of your paper.
Interview a Family Business Leader Application #5
Throughout the term you have been studying a variety of best practices for family businesses. Now, we
want to see how family businesses utilize these best practices. For this application, you will interview a
CEO/President of a family business that is in the second or greater generation.
Prepare questions on a dozen best practices in family business that you have learned about in your
readings. Anticipate follow-up questions to help clarify points that come up during the interview.
Arrange to interview a CEO or President of a second generation (or greater) family business. (Please
contact Sean if you cannot find a second generation firm in your area, and we will work with you to
locate one.)
Check out the company’s website and any recent articles about the company.
In the interview, learn a brief history of the company, what they do now, what they are most proud of,
what their values are, and which of the best practices you have cited they use or have considered using.
How do these best practices work for this company?
Write up your interview.
At the top of your paper, identify the company, who you interview (including title), location of the
company, the company’s industry, and what generation the company currently is in. Next, give a brief
description of the business that you learned about during the interview. For the interview questions, you
can provide a Q&A section in which you provide the questions and answers from the interview, or you
can summarize the interview and what you learned. If you summarize the interview, you will also need to
provide a section with your questions listed. Conclude your write-up with suggestions for the business.
These suggestions should come from the best practices that you have learned throughout the term.
