Week 1 - Concept of Family Business - PDF

FAMEBUS Family and SME Business Management Prepared by CIC-Branding and Creative Services Assoc. Professor: Angel Martin S. Manalansan D...

FAMEBUS Family and SME Business Management Prepared by CIC-Branding and Creative Services Assoc. Professor: Angel Martin S. Manalansan Data Privacy Notice De La Salle-College of Saint Benilde (DLS-CSB) respects your right to privacy and is committed to protect the confidentiality of your personal information thus has adapted necessary organizational, technical and physical measures to secure it. DLS-CSB is bound to comply with the Data Privacy Act of 2012 (RA 10173), its implementing Rules and Regulations and relevant issuances of the National Privacy Commission. By participating in this video meeting/conference/webinar, you are consenting to our collection(including recording) in accordance with this Privacy Notice. Information is also processed via this video conferencing platform. Please refer to the privacy policy found in their website. The information processed: name, email address, your image, video and audio will be used for attendance, documentation, communication and systems administration purposes. Only authorised individuals of Department/Office/Unit organizing the event and other offices authorized will have have access to this information and will not be disclosed to third parties without your approval. We also use information gathered from you for abuse prevention and privacy protection. DLS-CSB shall only retain the said personal information until it serves its purpose, after which it shall be securely disposed of. Queries and complaints can be directed to the Data Protection Officer at [email protected].  Opening Prayer Let us all remember that we are in the most holy presence of God, in the name of the Father, the Son and the Holy Spirit. I will continue oh my God, to do all my actions for the love of you. Saint John Baptist de La Salle - pray for us Saint Benilde Romanzon - pray for us Leave Jesus in our hearts - forever. in the name of the Father, the Son and the Holy Spirit. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved.  Introduction WEEK 1 Concept of Family Definitions Business Types of Family Businesses Business Governance and Management This Photo by Unknown Author is licensed under CC BY-SA-NC Author: Associate Professor Angel Martin S. Manalansan Introduction Private and Public Companies A privately held company is a firm that is privately owned, meaning the owners (i.e., the founders, managers, or private investors) own the firm but their shares are not traded publicly. The most common types of privately held companies are sole proprietorships, limited liability firms, and corporations with shareholders but whose shares are not traded on the stock market Founded by Ragde Falcis and Nico Nicomedes, ChatGenie was among four Filipino startups included in Forbes Asia’s 100 To Watch in 2021. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Private and Public Companies On the other hand, a publicly held company is a firm whose ownership is fully or partially formed of shares freely traded on the stock exchange. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Importance Knowing the Difference Both categories differ in ownership structure, governance complexity, tax regulations, transparency, and obligation to disclose financial information, among other attributes. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. So what makes a family business? Key Characteristics of a Family Business: Family Ownership and Control: A significant portion of the company’s ownership is held by one or more family members. The family typically has control over the decision- making process. The family may hold key management positions or control the board of directors. Multiple Generations: A family business often spans multiple generations, with the intention of passing ownership and leadership down to the next generation. This succession planning is a defining feature of family businesses. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. So what makes a family business? Key Characteristics of a Family Business: Family Involvement in Management: Family members often play a central role in the management of the business, holding positions from the executive level down to operational roles. This involvement can vary in degree, from direct day-to-day management to more strategic oversight. Long-term Vision and Values: Family businesses often emphasize long-term stability and growth over short-term profits. The business is seen as a legacy to be preserved for future generations, leading to a focus on sustainability, reputation, and community relationships. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. So what makes a family business? Key Characteristics of a Family Business: Succession Planning: A key element of family businesses is planning for the transfer of leadership from one generation to the next. Succession planning can be complex, involving not just the selection of a successor but also considerations of family dynamics, skills, and continuity. Challenges Specific to Family Dynamics: Family businesses can face unique challenges, such as conflicts between family members, issues related to nepotism, and the difficulty of balancing family interests with business needs. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. So what makes a family business? Key Characteristics of a Family Business: Succession Planning: A key element of family businesses is planning for the transfer of leadership from one generation to the next. Succession planning can be complex, involving not just the selection of a successor but also considerations of family dynamics, skills, and continuity. Challenges Specific to Family Dynamics: Family businesses can face unique challenges, such as conflicts between family members, issues related to nepotism, and the difficulty of balancing family interests with business needs. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Examples of Family Businesses Walmart: Founded by Sam Walton, Walmart is now one of the largest retailers in the world, with the Walton family still maintaining significant control. Ford Motor Company: Founded by Henry Ford, the company has been led by multiple generations of the Ford family. Samsung: A South Korean conglomerate that has been led by the Lee family for several generations. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Common Ownership and Management Structures The ownership and management roles overlap in one or more individuals, giving them the authority to strongly influence the firm. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Common Ownership and Management Structures Family business arises when two or more family members own and/ or manage an organization. In the figure above, family businesses are graphically represented with the addition of a new circle for the family entity alongside the existing ownership and management entities. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Family Business Definitions So what makes a family business? To define family business in simple terms, we need to consider two different entities: the family and the business. The overlap of these two entities forms a family business. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Family and Business Entity The Business entity is composed of individuals who organize and integrate a set of economic activities to achieve specific economic and social goals within the boundaries of a profit- oriented organization. The Family entity is formed by individuals who are related to each other by blood or affinity and who develop social and economic activities to care for each other. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Dimension in Family Involvement Ownership This dimension refers to when a family owns a firm and the family, through its family members, controls the firm. Governance This dimension refers to when a family controls a firm’s governance and can thus alter its long- term and critical strategic decision- making. Management This dimension refers to when there is active family participation in the top management team of a firm. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Dimension in Family Involvement Generational involvement This dimension refers to when family members from different generations (founder and subsequent generations) own, govern, and/ or manage a firm. Preserve as family firm This dimension refers to the family intention to pass the family involvement at ownership, governance, and/ or management level from one family generation to the next generation. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Family and Business Logics Applied to Family Business Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Family and Business Logics Applied to Family Business Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Family and Business Logics Quadrant Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Types of Family Businesses Dimension in Family Involvement Family-first firms Family businesses in the family- first firm group show strong family orientation. The family logic prevails over the business logic, and family values are embedded in the firm. Business-first firm Family businesses in the business- first family firm group show a strong business orientation. The business logic prevails over the family logic. A business- first family firm makes decisions based on what it needs to do to compete successfully in the marketplace. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Dimension in Family Involvement Family business-first firms Family businesses in the family business– first family firm group show a strong intention to balance business and family orientations and preserve both the business and family logics within the family business system. Family business– first family firms make decisions based on both family and business goals. Immature family firm Immature family firms are those without a dominant family or business logic. These firms are typically traditional “mom- and- pop” businesses, which have a very specific niche of local consumers. Family members act in their own interests, providing their skills and knowledge to keep the business alive. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Business Governance and Management Importance of Studying Family Business Governance and Management Family involvement in businesses imposes additional goals related to the family— namely family- oriented goals, such as having money available for the family, creating job opportunities for family members, and maintaining the family legacy across generations, among others. Combining business and family- oriented goals implies that family businesses have a different reference point when evaluating their decision- making. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Origins of Family Business Competitive Advantage Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. Group Activity 1 Due on Sept. 11, 2024 Questions to Answer (Group Work - 1) 1. What is your perception of family business? 2. What are the most common dimensions that define a firm as a family business? 3. Are family businesses homogenous? What are the most common types of family businesses? 4. Do you think all types of family businesses are successful organizations? 5. What are the competitive advantages of family businesses? Instructions: Answer each item as a group. A minimum of 3 paragraphs and a maximum of 5 paragraphs for each item. You must include references and citations from authoritative books, journal, or research papers. Use APA 7.0. Use the paper template that I will provide and at the last page, insert your references. Submit to BigSky Dropbox – GW-1. Only Team Leaders will submit on behalf of the team. Deadline is on Sept. 11, 2024, 12:00 PM. Late papers will not be accepted. Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. FAMEBUS Project Documentation Group Project Documentation Research on a local family-owned company. Requirements: 1) Executive Summary (Objective, Background, Key recommendation) 2) Introduction (Purpose, Scope, Framework) 3) Situational Analysis (Internal & External –SWOT) 4) Strategic Goals (Long-Term & Short-Term) 5) Strategic Options (ACA 1 – Details, Pros, Cons, ACA2…, ACA3…) 6) Recommendation 7) Implementation Plan (McKinsey 7S) Submit on BigSky DropBox as Project Documentation – Mid-Term Project Use Microsoft Word Template Only Group Leaders will submit. Submission is Mid-Terms Week  End of Week 1 FAMEBUS Copyright © 2020 De La Salle-College of Saint Benilde. All rights reserved. What’s next? 3-Circle Model Evolution Perspective of WEEK 2 3-Circle Model Family Business Emotions in Family Business Dynamics This Photo by Unknown Author is licensed under CC BY-SA-NC