Definition: Family Business

A family business is a company owned, controlled, and operated by members of one or several families. Many companies that are now publicly held were founded as family businesses. Many family businesses have non-family members as employees, but, particularly in smaller companies, the top positions are often allocated to family members.nnFamily participation in a business can strengthen the business because family members are very loyal and dedicated to the family enterprise. However managing a family business, and particularly succession planning, can present some unique problems. Often family interests conflict with business interests, for example hiring a family member who is less competent than a non-family member or keeping an underperforming family member in a position when their performance is hurting the company. Psychologists are often consulted to help families successfully manage issues that affect both the family and the business.nnAn example of the conflict that can arise is demonstrated in a story, about Stew Leonard's Supermarket in Connecticut, about a family business owner whose son's performance was deemed unsatisfactory by his supervisor. The father told the supervisor that he would take care of it. The father asked his son to come to the family home for a talk in the hot tub. When they were settled in the tub the father put on a hat which he said was his 'Boss' hat and told his son that he was fired. He then removed that hat and put on another calling it his 'Father' hat. Then he said: "Son, I'm very sorry to hear that you lost your job. Is there anything I can do for you?"nnExamples of family businessesnn• Cargill n• Ford Motor Company n• Koch Industries n• Matthew Algie n• Mills Fleet Farm n• SC Johnson Company n• Tetra Pak n• William Grant & Sons n• Vanee Foods CompanynnWikipedia, the free encyclopedia © 2001-2006 Wikipedia contributors (Disclaimer)nThis article is licensed under the GNU Free Documentation License.