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Family Business, Its Philosophy and Strategy Research Paper

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Updated: May 4th, 2021

Importance of Versatility

When family business encounters challenges, it may be difficult for leaders to choose between the roles of a CEO, a manager, a father or mother, and so on. One may, for example, note the situation when both of managers who are the daughters of the company’s CEO are sick, while their work is needed within two hours. In this regard, the leader may be confused because of the need to react in the most proper way to benefit both the family and business.

Ransburg (2014) considers that the concept of versatility as “the ability to do many different things well” is critical for strategic and operational decisions (para. 6). It is pivotal for a leader to manage several roles simultaneously, acting as a parent, a supervisor, or taking any other required position. The combination of several roles is likely to lead to greater collaboration of family members based on openness and mutual respect.

Among the advantages of versatility implemented in family business, there are increased effectiveness of management, short- and long-term planning, and growth opportunities. It is important to find a balance between the mentioned roles. As noted by Ransburg (2014), leaders in family business should involve others in the process of decision-making yet take the decisions based on objective facts.

At the same time, the author claims that family members may need feedback on their performance, while excessive guidance may disturb the company’s performance. In other words, empowerment and delegation are two core elements that need to be integrated into family business, focusing on versatility. It is also rather significant to point out the fact that a good leader needs to adequately perceive others’ responsibilities and performance, thus treating them not only as a parent or manager but as a versatile CEO.

Building Family Harmony Starts with Living Our Values

Strong commitment of all family members involved in business is one of the cornerstones in successful perpetuation. Family harmony implies that their ideas and perceptions may be different, yet family members are able to find a compromise (Houden, 2015). In particular, the situation when they may communicate their differences in a constructive manner and prevent misunderstanding may be regarded as family business balance. Houden (2015) cites the structure suggestion in the book “When Family Businesses are Best: The Parallel Planning Process for Family Harmony and Business Success” by Randel Carlock and John Ward. This structure unites family values and cultures, thus promoting such vital issues as vision, strategy, investment, and governance.

Most importantly, a leader should ensure that actions taken in terms of family business are based on values. Integrity, honesty, support, care, respect, and togetherness are mentioned among the qualities, the application of which is helpful in achieving family harmony (Houden, 2015). To create the cooperation of all family members, it is possible to organize meetings and share assumptions and differences.

The mismatch in vision may lead to great misunderstanding and family imbalance. The specificity of family business makes it consider the connection with the future generation. Since modern business environment tends to change rapidly, values of the upcoming generations may also be altered with time. Therefore, leaders should plan in long-term and align values with potential changes. Harmony maintenance should be assigned a top priority if family business wants to preserve its integrity and effectiveness. All in all, family harmony acts as a competitive advantage that distinguishes it from non-family owned firms and, probably, from other family companies that fail to achieve and maintain common vision.

Infusing Innovation into Family Business Strategy

The contemporary ever-developing world sets new opportunities in business area that are largely associated with innovation. Schmieder (2015) states that the search for the best innovation starts with the identification of the family company’s current economic conditions, and the high growth period is relevant to initiating changes. Another option is innovation at the extremes that proved to be good for infusing innovation.

Such a decision is aimed at increasing the production or improving its quality. For example, it is possible to introduce more automation in processes or consider the use of technology in logistics. In other words, both difficulties and success may drive innovation in family firms as a way to address challenges and accomplish better performance.

Innovation at midrange refers to more irresolution since business runs well, and changes seem to be not so necessary as everything goes traditional. In this connection, Schmieder (2015) claims that proper questions should be posed and asked to determine the innovation that can benefit the family company. In particular, the questions about further development, production, and adaptation to digital world may be considered.

In addition, the improvement of the existing strategies may also be the focus of the questions. When pondering over infusing innovation, a leader should engage all family members in the processes of decision-making and creative thinking, as stressed by Schmieder (2015). There are various approaches to implement innovation, each of which should compose critical questions, family member involvement, and personal best practices. The strategic planning may be taken as a framework for elaborating and infusing innovation in family business.

References

Houden, D. (2015). Building family harmony starts with living our values. Web.

Ransburg, D. (2014). Family business leadership: The importance of versatility. Web.

Schmieder, J. (2015). Infusing innovation into family business strategy. Web.

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