Financial Characteristics of Family Businesses and Financial Aspects of Succession

Family businesses are special in many respects. By examining their financial characteristics one can come to unique conclusions/results. This paper explores the general characteristics of the financial behaviour of family businesses, presents the main findings of the INSIST project’s company case studies concerning financing issues and strategies, and intends to identify the financial characteristics of company succession. The whole existence of family businesses is characterized by a duality of the family and business dimensions and this remains the case in their financial affairs. The financial decisions in family businesses (especially SMEs) are affected by aspects involving a duality of goals rather than exclusively profitability, the simultaneous presence of family and business financial needs, and the preferential handling of family needs at the expense of business needs (although it has to be said that there is evidence of family investments being postponed for the sake of business, too. Family businesses, beyond their actual effectiveness, are guided by individual goals like securing living standards, ensuring workplaces for family members, stability of operation, preservation of the company’s good reputation, and keeping the company’s size at a level that the immediate family can control and manage. The INSIST project’s company case studies revealed some interesting traits of family business finances like the importance of financial support from the founder’s family during the establishment of the company, the use of bootstrapping techniques, the financial characteristics of succession, and the role of family members in financial management.

Managing Succession and Knowledge Transfer in Family Businesses: Lessons from a Comparative Research

The most natural mode of family firm succession is the intergenerational ownership transfer. Statistical evidence, however, suggests that in most cases the succession process fails. There can be several reasons as a lot of personal, emotional and structural factors can act as an inhibitor to succession. The effectiveness of the implementation of any succession strategy is strongly dependent on the efficiency of intergenerational knowledge transfer, which is related to the parties’ absorptive capacity and willingness to learn. The paper is based on the experiences learned from the INSIST project. In the framework of the project different aspects of family business succession have been investigated in three participating countries (Hungary, Poland and the United Kingdom). The aim of the paper is to identify the patterns of management, succession, knowledge transfer and learning in family businesses. Issues will be examined in detail such as the succession strategies of companies investigated and the efforts family businesses and their managers make in order to harmonize family goals (such as emotional stability, harmony, and reputation) with business- related objectives (e.g. survival, growth or profitability).

Behavioural outcomes of next-generation family members’ commitment to their firm

Are there variations in behaviours and leadership styles of next-generation family members or descendants who join their family business due to different forms of commitment? Evidence from a dual respondent study of 109 Canadian and Swiss family firms suggests that descendants with affective commitment to their family firms are more likely to engage in discretionary activities going beyond the job description, thereby contributing to organizational performance. Next-generation members with normative commitment are more likely to engage in transformational leadership behaviours. Both affectively and normatively motivated next-generation members use contingent reward forms of leadership. A surprising finding of this study is the binding force of normative commitment on positive leadership behaviours of next-generation members. This study empirically tests the generalizability of the three-component model of commitment to family businesses, a context in which different forms of commitment may play a unique role.

The new lows : representing Asian-Australians on television

This project utilises creative practice as research, and involves writing and discussing four sample episodes of a proposed six-part dramatic, black-comedy1 television mini-series titled The New Lows. Combined, the creative project and accompanying exegesis seeks to illuminate and interrogate some of the inherent concerns, pitfalls and politics encountered in writing original Asian-Australian characters for television. Moreover, this thesis seeks to develop and deliberate on characters that would expand, shift and extend concepts of stereotyping and authenticity as they are used in creative writing for television. The protagonists of The New Lows are the contemporary and dysfunctional Asian-Australian Lo family: the Hong Kong immigrants John and Dorothy, and their Australian-born children Wendy, Simon and Tommy. Collectively, they struggle to manage the family business: a decaying suburban Chinese restaurant called Sunny Days, which is stumbling towards imminent commercial death. At the same time, each of the characters must negotiate their own personal catastrophes, which they hide from fellow family members out of shame and fear. Although there is a narrative arc to the series, I have also endeavoured to write each episode as a selfcontained story. Written alongside the creative works is an exegetical component. Through the paradigm of Asian-Australian studies, the exegesis examines the writing process and narrative content of The New Lows, alongside previous representations of Asians on Australian and international television and screen. Concepts discussed include stereotype, ethnicity, otherness, hybridity and authenticity. However, the exegesis also seeks to question the dominant cultural paradigms through which these issues are predominantly discussed. These investigations are particularly relevant, since The New Lows draws upon a suite of characters commonly considered to be stereotypical in Asian-Australian representations.

Death : is it fatal?

Death is a common occurrence in the world of today and impacts upon families in a variety of ways, depending upon a range of circumstances. This paper examines the impact that a sudden, unexpected death of the founder of a family business had on both the business and the family. The basis for the research is a single case study of a family business operating in regional Victoria. At the time of the death of the family founder (from a fatal motorcycle accident) his adult children had not been prepared to take over the company. The paper examines if the death of the founder proved fatal to the family business.

Incremental entrepreneurship : best practice professionalization across generations

This chapter will introduce Australia’s Dennis family – a case of ‘incremental entrepreneurship’ in the business transition from the first to the second generation. Following the second generation’s formal involvement and ownership in the business, Dennis Family Corporation (DFC) undertook a major professionalization process to formalize the family business and ensure its continued success. The members of the second generation have successfully sustained the entrepreneurial spirit of their family business (albeit in a different style), adding value to the firm in an ‘incremental’ manner. Throughout the chapter there will be a strong emphasis on the family element of DFC and the roles that each family member has played. Bert Dennis, as the founder and incumbent leader of the firm, has witnessed major changes to the business he built from the ground up. His children, in particular his son Grant Dennis as the primary next generation issue champion, have seen the changes from another perspective – ensuring the business remains within the family into the second generation and beyond. The professionalization process was sparked by a commitment from the second generation to continue to ‘make a real go’ of the family business rather than simply liquidating and distributing the assets. The dedication of all the family members to this objective has ensured the success of this process, and ultimately, the longevity of the firm. Although DFC has become more ‘professional’, it has not lost its entrepreneurial character; rather, it has improved the ways in which entrepreneurialism is fostered and pursued in the company. In essence, this case outlines how the implementation of appropriate governance and management practices has allowed the Dennis family to overcome the challenges and maximize the opportunities associated with owning and operating a multigenerational family fi rm. From a theoretical perspective, this case uses the concepts of entrepreneurial orientation (EO) (Lumpkin and Dess 1996) and the resource- based view (RBV) (Habbershon and Williams 1999; Barney 1991; Wernerfelt 1984) to demonstrate how the fi rm has leveraged its familiness to foster an enduring spirit of entrepreneurship and to maintain a sustained competitive advantage.

How do you like America? 1800-1940

The memoirs were written in 2000 in California and contains some of the author's diary entries during the years of the family's emigration and reminiscences of the author's father. Detailed description of family history going back to the early 19th century. The author's grandfather Moses Stern had a rawproduct business in Gelsenkirchen, Westphalia. His father Max Stern took his graduate exam (Abitur) at the Jacobsohn boarding school in 1904 and was sent to a business school in Brussles, Belgium. Work in the family business M. Stern AG. World War One and rise of the family business with branches throughout Germany and offices in New York, London, Milan and Stockholm. Due to political unrest at the end of the war the business administration moved to Essen. Description of the family background of Beate Herzberg, the author's mother. Courtship of his parents and marriage in 1922. Birth of his sister Annelore in 1923. Martin Stern was born in 1924. Description of the family household and domestic life in a well-to-do family the 1920s. Friday visits to the synagogue and celebration of Jewish holidays. Vacations at the North sea and skiinig in the Alps. Martin attended a Jewish elementary school. Rising National Socialism. After Hitler came to power in 1933 the author's father immediately started preparations for the family's emigration, but was persuaded to stay by his family. Life under National Socialism. Martin attended Gymnasium and was one of only two Jewish students in his class. Antisemitic incidents. Private lessons in piano and Hebrew. Bar Mitzvah in 1937. Recollections of performances of the Kulturbund.

Tolle Jahre Versuch einer Lebensbeschreibung

Description of the author’s family background. His paternal family owned a tobacco and cigarres business in Ulm, which was transferred to Munich in 1888. The maternal family in Frankfurt am Main had a textile export business. Recollections of his schooldays at the Catholic St. Anna Schule. Antisemitic encounters at the local Gymnasium. Description of life in the 19th century. Reverence for the local royalties. The family was involved in the Zionist movement, as were most of the members of their local synagoge.

Do SMEs cluster around innovation activities? Discovering active, incremental and opportunistic innovators

Do SMEs cluster around different types of innovation activities? Are there patterns of SME innovation activities? To investigate we develop a taxonomy of innovation activities in SMEs using a qualitative study, followed by a survey. First, based upon our qualitative research and literature review we develop a comprehensive list of innovation activities SMEs typically engage in. We then conduct a factor analysis to determine if these activities can be combined into factors. We identify three innovation activity factors: R&D activities, incremental innovation activities and cost innovation activities. We use these factors to identify three clusters of firms engaging in similar innovation activities: active innovators, incremental innovators and opportunistic innovators. The clusters are enriched by validating that they also exhibit significant internal similarities and external differences in their innovation skills, demographics, industry segments and family business ownership. This research contributes to innovation and SME theory and practice by identifying SME clusters based upon their innovation activities.

Efectos tamaño y sector sobre la rentabilidad, endeudamiento y coste de la deuda de las empresas familiares riojanas

Ponencia presentada y defendida en las XIV jornadas Hispano Lusas de Gestión Científica celebradas en Azores en febrero de 2004.

La complejidad del aspecto humano en las asignaciones internacionales

[ES] Análisis desde la experiencia profesional de uno de los problemas a los que se enfrenta la empresa en general y la española en particular, la internacionalización.

El comportamiento de las empresas familiares y no familiares en los mercados extranjeros: un estudio comparativo

[ES] Debido a que durante las últimas décadas un gran número de empresas e industrias han incrementado su orientación global, el proceso de internacionalización también ha tenido que ser advertido por la empresa familiar como instrumento de expansión y crecimiento. Así, hemos querido prestarle una especial atención a la comparación entre las empresas familiares y no familiares con el fin de examinar aquellas diferencias o similitudes encontradas entre estos dos grupos de firmas atendiendo a su actividad internacional. De esta forma, podremos establecer un marco de referencia para un estudio posterior en mayor profundidad sobre este fenómeno para el caso de las empresas familiares.

La gestión del marketing estratégico en la pequeña empresa familiar

[ES] Este trabajo, que se circunscribe en el ámbito de la pequeña empresa familiar, tiene como principal objetivo analizar la importancia que dichas empresas conceden a las diferentes dimensiones de la gestión estratégica del marketing en función de una serie de características demográficas y de evolución generacional. Con este fin, se ha realizado un estudio de naturaleza cuantitativa a través de encuestas personales dirigidas tanto a predecesores como a sucesores de una muestra de empresas familiares.

Aprendendo o uso das ervas: a trajetória de terapeutas populares

A utilização de ervas e plantas para finalidades terapêuticas é bastante antiga e registrada em várias sociedades. Esta pesquisa procura investigar como se dá o processo de construção e reprodução do conhecimento em medicina popular (particularmente o cuidado com ervas e plantas medicinais) através da história de vida de terapeutas populares pessoas que se tornaram referências em suas comunidades por adquirir, praticar e transmitir esse conhecimento. Tem como objetivos conhecer e compreender o processo de construção do conhecimento sobre plantas medicinais por terapeutas populares do município do Rio de Janeiro; compreender as formas de reprodução deste conhecimento; entender o contexto de relações destes terapeutas com o saber científico. Utilizou-se como opção metodológica a história oral com ênfase na história de vida. Foram entrevistados sete terapeutas populares de diferentes bairros do município. Observou-se que o conhecimento em relação às ervas medicinais não está restrito a um pequeno grupo e limitado a uma forma de transmissão oral. O conhecimento tem se reproduzido, mas também tem se modificado, mesclando-se com outras formas de conhecimento e entremeado por diversas fontes de informação que vão desde a transmissão oral até informações disponíveis na mídia. A principal forma de reprodução do conhecimento parece ser a perpetuação do negócio, que evoca o discurso do tradicional, a natureza das ervas e suas propriedades benéficas e se sustenta por uma rede de informação que se utiliza dos diversos meios de comunicação e uma rede de produção e comércio que garante o sustento econômico dos terapeutas populares. A transformação das práticas de utilização de ervas medicinais em patrimônio cultural ou negócio de família além de garantir a perpetuação do conhecimento, garante um espaço diferente dentro das práticas de cuidado em saúde. As relações dos terapeutas com a medicina oficial não são relações de tensões, embora haja criticas, mas de interposição de sistemas terapêuticos.

Estrategias de diversificación en los grupos familiares y no familiares: principales diferencias según el tipo de grupo no familiar

[ES] Durante la última década surge un interés por el estudio de la estructura de propiedad como elemento determinante de la diversificación. Sin embargo, existe una carencia de investigaciones que analicen la influencia de la naturaleza del último propietario en el nivel y tipo de diversificación. Por ello, el objeto del presente trabajo es analizar las estrategias de diversificación empleadas por los grandes grupos empresariales españoles cuya empresa matriz cotiza en los mercados de valores, estudiando las diferencias existentes entre grupos familiares y no familiares, y considerando en estos últimos la naturaleza del último propietario. Se parte de una muestra de noventa y nueve grupos empresariales, donde se identifican las compañías que constituyen el grupo empresarial, siendo empleadas como metodologías econométricas los modelos logísticos binomiales y los modelos datos panel. Los resultados muestran como la naturaleza familiar del grupo influye positivamente en la especialización y en el empleo de estrategias de diversificación relacionada, y negativamente en el empleo de estrategias de diversificación no relacionada. Los grupos familiares difieren en mayor medida de aquellos grupos no familiares donde no existe un accionista de referencia que pueda ejercer el control efectivo del grupo y la dispersión de la propiedad es mayor, los denominados grupos sin control efectivo . La investigación permite profundizar en el análisis de las diferencias existentes entre grupos familiares y no familiares, y más concretamente en el ámbito de las estrategias de crecimiento, considerando la naturaleza del último propietario de los grupos no familiares.