{"id":86,"date":"2018-12-24T20:03:48","date_gmt":"2018-12-25T01:03:48","guid":{"rendered":"http:\/\/pressbooks.library.upei.ca\/smallbusinessmanagement\/chapter\/family-businesses\/"},"modified":"2019-08-29T09:28:28","modified_gmt":"2019-08-29T13:28:28","slug":"family-businesses","status":"publish","type":"chapter","link":"https:\/\/pressbooks.library.upei.ca\/smallbusinessmanagement\/chapter\/family-businesses\/","title":{"raw":"Chapter 3: Family Businesses","rendered":"Chapter 3: Family Businesses"},"content":{"raw":"
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Family Business: An Overview<\/span><\/h1>\r\n<\/div>\r\n
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Learning Objectives<\/h3>\r\n
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  1. Explain what a family business is.<\/li>\r\n \t
  2. Understand the role that family businesses play in the US economy.<\/li>\r\n \t
  3. Explain the advantages and disadvantages of family businesses.<\/li>\r\n<\/ol>\r\n<\/div>\r\n

    \u201cFamily businesses are different.\u201d[footnote]BDO 2009 Report: \u201cFocusing on Business Families,\u201d BDO, November 2009, accessed October 8, 2011, static.staging.bdo.defacto-cms.com\/assets\/documents\/2010\/04\/Focusing_on _business_families.pdf.[\/footnote]<\/span><\/p>\r\n

    There is no agreed-on definition of a family business. The percentage of ownership, the strategic control, the involvement of multiple generations, and the intention for the business to remain in the family are among the many criteria that experts use to distinguish family businesses from other types of businesses. [footnote]Joseph H. Astrachan and Melissa Carey Shanker, \u201cFamily business\u2019s Contribution to the U.S. Economy: A Closer Look,\u201d Family Business Review 16, no. 3 (2003): 211\u201319.[\/footnote] <\/span>For the purposes of this chapter, however, a [pb_glossary id=\"643\"]family business[\/pb_glossary]<\/strong><\/em> <\/a><\/span>is defined as a business that is actively owned and\/or managed by more than one member of the same family.[footnote]\u201cFamily Businesses,\u201d Entrepreneur, 2010, accessed October 8, 2011, www.entrepreneur.com\/encyclopedia\/term\/82060.html.[\/footnote] A family business can also be defined as the result of someone\u2019s dream:<\/p>\r\n\r\n

    The story of every successful family business starts with someone who has the passion, confidence and courage to put his [or her] money where his [or her] mouth is\u2026[These entrepreneurs] work incredibly hard, make things happen, are positive without being unrealistic and possess the resourcefulness to overcome all sorts of hurdles. They are also socially adept, capable of communicating effectively and good at inspiring others\u2026[footnote]\u201cMaking a Difference: The PriceWaterhouseCoopers Family Business Survey 2007\/08,\u201d PriceWaterhouseCoopers, November 2007, accessed October 8, 2011, www.pwc.com\/en_TH\/th\/publications\/assets\/pwc_fbs_survey.pdf[\/footnote]<\/em><\/blockquote>\r\n

    Family business owners know that their roles are different from that of shareholders in companies owned by many public investors. In addition, \u201c[E]mployees in family businesses know the difference that family control makes in their work lives, the company culture, and their career. Marketers appreciate the advantage that the image of a family business presents to customers, and families know that being in business together is a powerful part of their lives.\u201d[footnote]Kelin E. Gersick et al., Generation to Generation: Life Cycles of the Family Business (Cambridge, MA: Owner Managed Business Institute, Harvard Business School Press, 1997), 1.[\/footnote]<\/p>\r\n\r\n

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    Market and Employment Presence<\/h2>\r\n

    Because of the private nature of most family businesses, it is difficult to obtain accurate information about them.[footnote]Joseph H. Astrachan and Shanker, \u201cFamily business\u2019s Contribution to the U.S. Economy: A Closer Look,\u201d Family Business Review<\/em> 16, no. 3 (2003): 211\u201319.[\/footnote]<\/span> Complicating the situation is that most data sources do not distinguish between small family businesses, such as the local pizza parlor or deli, and large family businesses, such as Walmart, Mars, and Ford. \u201cThe reality is that family-based operations are represented across the full spectrum of American companies, from small businesses to large corporations.\u201d[footnote]\u201cFamily Business Statistics,\u201d Gaebler.com: Resources for Entrepreneurs<\/em>, October 10, 2010, accessed October 8, 2011, www.gaebler.com\/Family-Business-Statistics.htm<\/a>[\/footnote].<\/span> Within this context, the following has been observed[footnote]\u201cFamily Business Statistics,\u201d Gaebler.com: Resources for Entrepreneurs<\/em>, October 10, 2010, accessed October 8, 2011, www.gaebler.com\/Family-Business-Statistics.htm<\/a>;[\/footnote][footnote]Stacy Perman, \u201cTaking the Pulse of Family Business,\u201d February 13, 2006, accessed October 8, 2011, www.BusinessWeek.com\/smallbiz\/content\/feb2006\/sb20060210_476491.htm<\/a>.[\/footnote]<\/span>:<\/p>\r\n\r\n