Paulino, RN, MBA Definition of Family Firm or Family Business : (1) a familys influence over the strategic direction of a firm (Davis & Tagiuri, 1989); (2) the intention of the family to keep control (Litz, 1995); (3) family firm behavior (Chua et al., 1999); and (4) unique, inseparable, synergistic resources and capabilities arising from family involvement and interactions (Habbershon, Williams, & MacMillan, 2003).1 1) A familys influence over the strategic direction of a firm (Davis & Tagiuri, 1989); based on the belief that familys influence is strong in terms of influence on the strategic direction of a firm (thrusts, directions, mission, vision). 2) The intention of the family to keep control (Litz, 1995); . based on the belief that family involvement is only a necessary condition; family involvement must be directed toward behaviors that produce certain distinctiveness before it can be considered a family firm. 3) Family firm behavior (Chua et al., 1999); a business governed and/or managed with the intention to shape and pursue the vision of the business held by a dominant coalition controlled by members of the same family or a small number of families in a manner that is potentially sustainable across generations of the family or families. 4) Unique, inseparable, synergistic resources and capabilities arising from family involvement and interactions (Habbershon, Williams, & MacMillan, 2003).
a business governed and/or managed with the
intention to shape and pursue the vision of the business held by a dominant coalition controlled by members of the same family or a small number of families in a manner that is potentially sustainable across generations of the family or families. GUIDE QUESTIONS: 1) Based on the definition of Family firm (FF) or Family Business (FB), which definition has an impact on you? Pls. explain further. 2) Is it possible that family businesses are not different from nonfamily ones? Pls. explain your answer. Difference between family business and non-family business: No, there is little or no Yes, it differs difference Goals Sources of debt financing Ethics Strategic orientation Size Management and Financial structure governance characteristics International structures Problems and assistance and strategies needs Corporate governance risks ACTIVITY: Assume that you are seeking for a new family business or family firm. You have been advised to choose one (1) of the following: 1. Food business 2. Real estate business 3. Convenience stores On the next slide, pls. read the requirements for each. Questions: 1. Which of the 3 business would you choose? 2. What specific business based on your answer in no. 1 will you focus on? Why? 3. Make a list of 5 factors you would consider in making a decision on which business to accept. 4. Write a brief 1 to 2 paragraphs in which you discuss your decision and the basis for it. ACTIVITY: 1. Group yourselves into 3. 2. Do a role play good for 10 minutes. 3. Scenario: As an owner of a family business, how are you going to set your directions, thrusts in your company. NEXT MEETING: August 25, 2017 REMINDER: 1. FA1 schedule: August 30, 2017 2. No. of items: 40 3. Scope of FA1 exams: to be discussed on August 25 THANK YOU FOR LISTENING!!