ENT-18

MANAGING THE FAMILY FIRM

By: Maria Luz Lourdes M.

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!!