Today, family companies are the most dominating world businesses. This requires family firms to ensure longevity by phasing their challenges by ensuring the implementation of long term planning. The family company should design a family business road map for future maintenance and governance of the enterprise and family. Management of a family business for long term decision making should be compared to nurturing a tree where family members are required to cultivate vision aspired for a family enterprise. Family businesses are required to implement and adapt family business map which will help the family enterprises in realizing the assets the enterprises have, foresee roadblocks ahead of the company and create a long term plan for ensuring a sustainable business future.
There are three necessary steps which the family enterprise is required to follow in the implementation of long term planning for the family business road map. The first step is identifying family business assets and challenges or roadblocks, for a family business to be successful family assets, which are the unique contributions which families can offer to their enterprises. These family assets form the foundation for essential strategies of the business, focus on long term development, defines niche sector for the company, and helps the family business develop fast-reacting and a flexible philosophy of management (Bennedsen & Fan, 2014). These contributions of family assets indicate the importance of maintaining families engaged in the future of a family business. Family companies require substantial business assets to face many challenges and roadblocks, which affect the future of the family enterprise. The family company should be able to pinpoint their governance difficulties and comparative advantages. This requires the family business to clearly understand the importance of family assets and the existing and future roadblocks to the success of the company.
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The second step in the implementation of long term planning for the family business map is mapping the future of the family business. After the family business has identified family assets and future roadblocks, it should outline the appropriate path which will lead to the future of the company. The family business is required to select a proper ownership structure, correct family engagement, and proper management structure. If the family business realizes there are a lot of challenges in the current ownership structure, it should plan to change the business ownership structure. The family business map offers a simple illustration of the procedures which the family should undertake. This predicts that if the family assets are disappearing should acquire external management and should look for changes in ownership structures of the company to reduce costs of the roadblocks the company could face. The third step is that the family company needs to cultivate for the overall path of implementing family business map in the business. The process of cultivation can take between 20 to 30 years for the company to finalize it, and the company should make it an ongoing process.
The family business has various challenges and roadblocks in the implementation of the family business map. The barriers the family business faces originate from three different levels. The family business can face obstacles related to the family company, development, and diverging interests of the family. The family company can also face obstacles relating to markets, including labor markets, capital, and products. The family company can face unique challenges when industries develop and change their structures in referring to the labor force and the manner of raising capital for a new business (Ward, 2016). The family business can face institutional roadblocks which are diverse and numerous, including economic and political instability, taxes and inheritance rules which vary in the country. Government regulation is another roadblock which can be a potential barrier for growth and development of the family business. The family enterprise can face the challenge of corruption and lack of property rights, which constrain activities of the business. The family business will be required to evaluate its market and location it is operating in the company is necessary to grapple with these roadblocks.
References
Bennedsen, M., & Fan, J. P. (2014). The family business map. In The Family Business Map (pp. 83-108). Palgrave Macmillan, London.
Ward, J. (2016). Keeping the family business healthy: How to plan for continuing growth, profitability, and family leadership. Springer.
