Many family owned businesses are bound to lose creativity and innovation with every subsequent generation. According to the article, upholding the competence and creativity required to keep a family business alive takes a lot of will and commitment (Jaskiewicz and Combs). In many cases, family businesses that survive competition and manage to keep the fire burning in many subsequent generations are usually endowed with ownership and management that is characteristically hungry for success. The authors go ahead to say that management carries out its responsibility with passion and usually obsesses over the quality of products produced (Rothwell, 83). This paper will give insights on an article written by Peter Jaskiewicz and James G. Combs on a study they conducted on 21 family wineries in Germany which have successfully made generational transitions gives several insights on what is needed to maintain a family business. Moreover, there are also insights on what does not work when it comes to upholding a family business highlighted in this very paper.
According to the authors, passing along family history is an important part of making businesses succeed from one generation to the next. Most innovative family businesses are in possession of what can be deemed as an “Entrepreneurial Legacy” that is passed down via oral tradition from one generation to the other. These families have the elderly narrate to the young; tomorrow’s business leaders; of the achievements of the family and how it succeeded when times were tough. When the generation that is supposed to take up the business get to learn about how their great grandparents kept the business alive amidst much difficulty, they become inspired and much obliged to succeed. On the other hand, generations in the not as much of commercial “traditional” businesses either do not have facts about their past or downplay it as a result of probability. They do not have pride in the achievements of their ancestors.
Families that have been successful in their businesses get the children started at an early age and insist on practical education. When children are given tasks related to the family business e.g. pruning vines and bottling (in case of a winery), they develop emotional attachment to the business and are likely to be committed to its success in the future. The authors also mention that in the event that an older generation deems it harmful or unproductive to make children work in the family business, emotional attachment to the business is not realized on the part of the younger generation (Jaskiewicz and Combs).
On matters concerning practicality, the article notes that both traditional and entrepreneurial families encouraged their younger generations to acquire a secondary education; however, the difference comes when these generations attend colleges and universities. Traditional families vouch for children finding their own paths and careers whereas entrepreneurial families encourage their children to pursue courses that fall in line with the family establishment; courses like law and business management. What’s more, entrepreneurial families prefer that the ownership of the entire business is granted to one member of a younger generation; this prevents the business from being split up or sold.
In a family business setting, foundations realized through the stewardship theory make family members trusting of one another; this makes the business devoid of fights and wrangles. The stewardship theory would have it that one family member is handed the reins of the business while the others position themselves as stakeholders; have different factions of family members within the management team has never been productive; it creates oscillations on who has the authority and also confuses workers in the event that differing delegations are given.
Works Cited
Chekoas, G. In Their Own Words: How Does the Succession Experience of Second Generation Family Business Owners Influence Future Approaches to Succession? Business Administration. Georgia State University, 2013. Print.
Jaskiewicz, Peter and James G Combs. How To Keep A Family Business Alive For Generations. 2015. Web. 5 Sept. 2016.
Rothwell, William J. Effective Succession Planning. New York: AMACOM, 2010. Print.
