How to Support Family Business? About Family Business NetworkArtur CHABERSKI, IFR

How to Support Family Business? About Family Business Network

Family Business Role

1. FB play a very important role in it economy of Poland, the European Union and the rest of the world. In the EU, they are about 60 - 75% of all operating companies (Italy 90 %) In USA it is about 75-90 % (Astrachan,

2001). They form about 60% of GDP in the U.S . Most of them, the micro and small firms.

2. A family-owned company shall be construed as an undertaking with any form of legal entity or person engaged in business activities, capital

which, in whole or in part is crucial in the possession of the family, at least one member has a decisive influence on the direction or

management function, with the intention of maintaining a sustainable enterprise in the hands of the family (Frishkoff, 1995).

3. The mutual penetration of the business of the rational and emotional family (Jaffe, 1990). Three circle model – Family Business Ownership.

FB - threats and chances

• Threats: First generation creates the company, second continues its existence, the third leads to collapse. Studies show that 1 in 30% of

generation companies will survive, the other 8%, the third of 3%

• Most companies in the world are family businesses or companies controlled by families (Journal of Finance, La Porta et al, 1999).

• In Poland : about 1 million family businesses, with many features in common, which shows their identity, values, specific advantages and

problems.

• Family Business are also more than the ability to longevity. For the current generation of owners are a natural hedge because they are retired

pension, and for their children's future job.

• In family firms naturally embedded in the values for which the building of a modern business deal with the host of managers and consultants -Tantow. Family relationships may be the source of the ethical action,

sensitivity to the needs of another human , the skills of teamwork, leadership, knowledge, and above all a sense of community and loyalty.

Family Business - few remarks

• The logic of the functioning of family businesses is set for a longer time horizon, so they attach greater importance to ensure the welfare of the family and future generations (Jaffe) which sometimes can be more important than innovation.

• Family businesses have a better ability to use the properties associated with its natural environment for the better functioning of innovation (Craig, 2006).

• Family firms have over the last decade outperformed their non-family counterparts, both on ROA accounting and stock market measures (Miller, 2004,

Anderson and Reeb, 2003).

• Family & non family firms have been found to differ with respect to influence patterns, organizational climate and organizational processes (File, Prince & Rankin,

1994).

•Family firms have been determined to be more stable, conservative (Doncles & Frohlich, 1991).

• Family Business show slower growth and slower participation in global markets (Gallo, 1993).

Family Business Issue

• Maturation process and willingness to be more and more independent of the younger generation – conflict managment.

• It may be the cause of poor communication.

• Despite government slogans and declarations in favor of entrepreneurship, we do not have uniform support political, economic or experts.

• Advantage for family businesses is the possibility of a rapid response to change.

• In Poland, family businesses often identified with farm or small shops with food run by husband and wife where help the children or a company from first industrial revolution with lower form of management – all in the hand of owner.

• Are the family owned business model of past or a model for future?

Networking

• Concept of networking - Generally speaking, the network may be focused on achieving business goals, education (the focus on the university), or both.

• An interesting example of business network - a network of education may be a non-profit Family Business Network (Family Business Network), based in Lausanne (Switzerland).

• Wondering on how to implement models of education and research in the field of family. Swiss Family Business Network (FBN) operates on the basis of the three dominant models:

• 1. Academic Model (USA, Ireland),

• 2. Education model developed by FBN (Sweden, United Kingdom, Brazil, Switzerland, Mexico, Netherlands, Belgium and Austria),

• 3. Lobbing and education model (Spain, Italy, France, Finland, Germany, Poland).

The different Chapter Models within FBN

USA,

Ireland,

Chile

Academic model

Sweden, UK,

Brazil

Swiss,

Mexico,Netherland

s,

Belgium,World,

Denmark, Austria,

Colombia,

Bulgaria, Asia-

Pacific, Japan

Model based

on education model

Spain, Italy,

France,

Finland,

Germany,

India,

Australia

Model with official

National association status

covering education and

lobbying

FBN Benefits

Benefits that the company develops a family belonging to the network are therefore multi-dimensional:

• To address specific problems in the family business,

• Access to the platform for the exchange of contacts and experience (able to develop business in another country),

• Access to the list of family businesses in the world,

• access to the latest global research and business family

• the opportunity to participate in international events,

• receiving the magazine Families in Business (Family Business)

• an opportunity to exchange experience "live" (eg Henkel, Lego, Peugeot, Bonnier Puls publisher of Business in Poland), • the opportunity to participate in world conferences.

Family Business in Poland

• Report provides examples of 100 richest Poles and 500 most innovative companies. Examples of such companies as ITI, TVN, Blikle, Konspol, FAKRO, Dr. Eris, Solaris, New Style, Mokate, Comarch, ADAMED or are leaders in their domains to stimulate interest in polish family businesses.

• Issues FB in Poland: Succesion, Taxes, Leadership, governance and management,Strategy, planning and globalization, Relationship internal and external, Capitaland investment, Profesionalization, Change and conflict management, Nepotism

• This requires bringing the training to increase efficiency by incorporating proven active forms of learning such as learning by doing, tutoring and learning specific skills.

• Rapidly changing situation on the labor market in Poland, teaching applied economics and management should be changed towards a greater orientation to the existing educational needs of the economy in Family Business field.

• In this model, the formal requirements of educational standards should be combined with the ability to respond to educational needs.

IFR - Family Business Incentive

• The Initiative of Family Firms was conceived in February 2008 and registered in June 2008.

• Relation – education – change Our motto: Let’s give ourselves the chance nobody will give to us.

• Our activities so far u-Rodziny 2008, Stop graffiti, Participation in the World Week of Entrepreneurship, Cooperation with PARP. u-Rodziny 2008 an all-Poland Family Businesses Meeting, Honorary Patron: Poland’s Deputy Prime Minister Waldemar Pawlak, Panel with Euro Deputies Jerzy Buzek, Janusz Steinhoff , Lectures by expert psychologists, communiation experts, training stars , an attractive artistic program.

• What we offer to business in general, Consultancy and training in, management - knowledge and skills , a common platform for exchange, extended business contacts , an opportunity to impact the economy, Inspiration, good time join in The Incentive of Family Firms let’s take the chance, nobody will give to us .

Family Business Meeting, 2008

IFR Membership

• Who can join IFR? any one …,

• We draw no lines between family and non-family business

• However … we want to act as a platform of development and support for family firms, however they are defined

• What we offer to family firms: Counseling on solving problems pertaining to family business: succession – a child or an external CEO, cross-generation communication, career path for non-family employees, how to separate family form company life and why ,

• How do we differ from other organizations: we provide a platform for family businesses, we are not a branch organization , we are not a union of employers, nor a union of employees, we do not divide company community into employers and employees, a distinction we consider harmful to all,

• We intend to be o mass organisation: low fee with a variety of activities

Scientific Division of IFR

Proposal to the Program of Action for IFR 2009 - 2012 "in the first leg of the Family Firm in Kedzierzyn Kozle on 9 November 2008, the research team :

Research projects on the national family

European Projects

Basic research

Relationship Research Institute of eg.: FFI, IFERA and Family Business Network

Monographic studies of companies

The dissemination of research results

Research projects on the national family development of basic research

Support for institutional cooperation

Encourage research on their own private and public

The development of integrated programs of research universities

Supporting research and multidisciplinary domains as: Psychology , Sociology, Political Law, Economics, Management.

Scientific Division of IFR Program

• Integration of the results of research projects and educational advisory : The open platform of IFR Integration Study in Diversity, Forum communication, Many participants, Accumulation of knowledge, Development of methodology, Research on the Internet, Dissemination of knowledge, Being open to new media and information technology, Orientation for entrepreneurs

• The creation of the Scientific Council of the Heads of research that supports IFR Board of Directions strong links with the practice of the board by: The Council of the research firm, The Council of State agencies and offices: PARP, CSO, Patent Office, the Office of Competition and Consumer Protection, Polish Committee for Standardization, Association, Chambers of commerce, clubs m.in.ZBP, Consultation and expertise National,

IFR Program

• Family Firms, Executives IFR, Universities, Educational Companies, Consulting Firms, Family to gather opinions, Nursing Research and Development Foundation Development of scientific foundations: The organization calls for research, Starts of projects, Consultation research coverage, Methodology of the research, Creating databases and knowledge, Dissemination of knowledge, Mobilization of public surveys, Develop a business scratch register, The theoretical basis for research , Examination of the position and family ties.

• Succession, taxation, innovation, The case studies for educational purposes, Polish Family Firms Foreign Companies, The history of family businesses in Poland, Dissemination of results, Action in the connection of centers of scientific and research companies and Translation of research results, Seminars and conferences, Taking into account the results of research on educational programs and manuals Scientific Circle, Trips to conferences, Communicating.

FB Example - BLIKLE

FB Case - BLIKLE• Blikle sp o.o. represents the industry, confectionery, in which the

important role played by tradition and efforts for the continuation of five generations of the company.

• In this way, it is a company which is the symbol of Warsaw's art confectionery and as a unique business model of the family.

• Cult of fairness and kindness.

• TQM in 1996: Andrzej Blikle implement methods E. Deming and P. Drucker of permanent improvement and building open relationships based on cooperation.

• The effects of the use of TQM: to improve working conditions, elimination of waste, increase productivity and product quality.

• The company conducted training courses on these methods of management.

• The dynamic increase in the number of sales outlets in the past 18 years in the company, and thus also of production, the number of employees and productivity.

FB Example - BLIKLE• In 1990 the company had one cafe, studio production with an area of 150

m2 and a workforce of 42 employees.

• In the year 2009 has 23 facilities, 1800 m2 production area and employs approximately 250 employees.

• Professionalization of management in the company A. Blikle admitted to the board at the highest level of experts from outside the family, which constitutes the criterion of competence rather than blood ties and professional management.

• The company has developed and constantly improved the organizational structure of the vertical and horizontal.

• Family firm's organizational culture, Andrzej Blikle scientist at the same time as a professor of mathematics IPI PAN, the owner and confectioner, with precision and effectively created and implemented a set of rules and procedures, organizational, which is constantly improved through a comprehensive quality management TQM.

Are the family owned business model of past or a model for future? BLIKLE

• This represents an excellent example of innovation and modernization that began in 1990, comprehensively changing 140 years of business today.

IFR• Through researches, exchange and transfer of knowledge to help

understand and learn how successfully balancing the differing interests of family members and/or the interests of one or more family members on the one hand and the interests of the business on the other hand require the people involved to have the competencies, character and commitment to do this work.

Thank you and join us