Family Business Essay Example | Topics and Well Written Essays - 2000 words

Family Business - Essay Example The paper tells that the family business is an enterprise governed and managed for the purpose of pursuing and developing the vision of the business â€Å"held by a dominant coalition controlled by members of the same family or a small number of families† for its potential sustainability across generations of the family, sometimes in business association with some of its extended families. Most definitions of family business centre around the kinship of family members owning and managing a venture, state Rogoff and Heck. According to Habbershon, Williams and MacMillan, it is the intersection between family members, the family, and the business that epitomises the distinctive set of characteristics that explain performance differences between family and nonfamily businesses. The intersection may also be a source of conflict within the family and the business. In the domain of family business leadership transition, Hartel, Bozer and Levin consider an adaptation of executive coac hing to be helpful in the process. Family systems are important in family enterprises. Further, family businesses form the foundation stones of evolving economies state Gomez-Mejia, Takacs, Nunez-Nickel et al as well as Hunter and Wilson. Two-thirds of organisations are family-owned and managed. The fact that this segment of the economy is facing an impending crisis is disquieting, particularly in view of the fact that there is little governmental assistance for family business owners to resolve the emerging threat successfully. Thesis Statement: The purpose of this paper is to investigate the theory of family business, examine the crucial role of the family system in family business, and determine whether the adaptation of executive coaching can successfully support leadership transition in family enterprises. The Theory of Family Business The lenses through which academic research and literature on family businesses are viewed and interpreted is the theory explaining different asp ects of family business management. Research helps to reinforce theory. For example, Sharma, Chrisman and Chua (2003) use the theory of planned behaviour to help explain the extent to which family businesses engage in succession planning. At the same time, a broad theory of family business is more important because it will help in setting the parameters for research in the domain of family businesses. A broad theory will also function as a tool for retaining, expanding, and propagating knowledge on the field. The theory of the family firm explains the concept of the family business, the reason for the existence of the same, and the determinants of their scale and scope. It is a comparatively new area of study in relation to rigorous theoretical investigations. However, there are identifiable trends in defining family business, and in differentiating between family firms and non-family firms, thereby addressing the existence of family firms, the factors that support their survival, g rowth, and the creation of long-lasting economic and non-economic value. Habbershon (2006) as well as Chrisman, Chua and Litz (2003) reiterate that the family business exists because of the reciprocal economic and non-economic value created through the integration of family and business systems. The joining of the two systems leads to capabilities of â€Å"familiness† that cannot be duplicated, and which contribute to the survival and growth of family businesses. A resource-based view of the family business explains how it identifies and develops capabilities of familiness, how they transfer those capabilities to new leaders and new family business structures, and their methods of renewing their capabilities during the transformation in circumstances and conditions. On the other hand,