The defining characteristic of a family firm is a long-term orientation. For example, a recent study by Yu, Brigham, Sorenson and Lumpkin (2012) summarized the data from 12 years of family business research and they found that family firms are mostly characterized by a long-term orientation, as revealed in a governance focus on strategic and succession planning. A firm becomes a family firm when the owners decide to keep business ownership in the family for the long term, as opposed to shutting the doors or selling the business to investors. Thus, to sustain the long-term viability, they focus on short-term financials but also focus on goals that produce the best long-term outcomes.
Sharma (1997) states that the strategic management process …show more content…
Accordingly, long termism in family business is for instances not loading the balance sheet with too much debt to make higher return on equity for the quarterly or annual reporting periods. It is about reinvesting the success of the business for its growth to the next generations. Long termism in a family business can also be interpreted as “Reinvesting the success of the business for its growth to the next …show more content…
Corporate Values
For a family business corporate values act as a main factor for the success of a family business. Values strength the business by helping to assure cohesion and resolving the conflicts through the values passed down from generations .Corporate values can be defined as the operating philosophies or principles that guide an organization's internal conduct as well as its relationship with its customers, partners, and shareholders.
Values base management is an important area which family own businesses have excelled over years. Due to the interconnection between the family ownership and management in the family firms, corporate values are very important as the intertwined nature of the family firms make the strong family values in the founding family to be transferred and transmitted to the business. Running a family own business incorporating family values in its activities is a difficult undertaking. Apart from the handling opportunities and pitfalls in day to day operations, the management must also consider the requirements and wishes of the founding family members. (Ward,
Sharma (1997) states that the strategic management process …show more content…
Accordingly, long termism in family business is for instances not loading the balance sheet with too much debt to make higher return on equity for the quarterly or annual reporting periods. It is about reinvesting the success of the business for its growth to the next generations. Long termism in a family business can also be interpreted as “Reinvesting the success of the business for its growth to the next …show more content…
Corporate Values
For a family business corporate values act as a main factor for the success of a family business. Values strength the business by helping to assure cohesion and resolving the conflicts through the values passed down from generations .Corporate values can be defined as the operating philosophies or principles that guide an organization's internal conduct as well as its relationship with its customers, partners, and shareholders.
Values base management is an important area which family own businesses have excelled over years. Due to the interconnection between the family ownership and management in the family firms, corporate values are very important as the intertwined nature of the family firms make the strong family values in the founding family to be transferred and transmitted to the business. Running a family own business incorporating family values in its activities is a difficult undertaking. Apart from the handling opportunities and pitfalls in day to day operations, the management must also consider the requirements and wishes of the founding family members. (Ward,