ECON 1 Lecture Notes - Lecture 14: Succession Planning, Sibling Rivalry, Nepotism
Document Summary
The conflict between family and business cultures: at the heart of the family are distinctive values and beliefs, which can strengthen the business, but can also lead to a lack of professionalism and nepotism. Y2p5 2018/19: the family"s values and beliefs can benefit the company by becoming part of its brand and culture. Issues need to be addressed directly in an open and balanced way. Y2p5 2018/19: stage 4 power transfer: strategic planning, mgmt. control and operational responsibility shifts from one generation to another. The succession process accelerates as the founder begins the retirement process and reduces the active participation in the business. The four-stage process repeats with increasing complexity as new generations join the firm. The decision-making changes as generations succeed each other: the founder makes the decision themselves. The second generation is usually more consultative, and the third generation employs more consensual decision-making, so other family members influence the outcome.
