Question

Why is a mature family owned business ,one often facing the prospect of succession so vurnerable to decline and failure?

Answer 1

In a mature family-owned business, the Entrepreneur either puts more emphasis upon relying on its own skills or only upon the other who shall take over from such Entrepreneur in future. Also, since an Entrepreneur may have achieved the success in business on completely on his own right, such Entrepreneurs naturally develop disregard for a formal Organizational structure or even towards the general management practices in the industry. As a result, event the Next-generation CEO feels to disregard the same by following the footsteps of the Entrepreneur thereby engaging in strategic regeneration. Now, owing to a family-owned business, several family members are itself added in the business that may lead to certain differences of opinions especially based on relationships concerns with multiple members becoming active on the decision-making process thereby making the whole system chaotic in nature. There may be high differences of opinions and conflicts of interests that disregard bureaucracy in the system and end up creating further concerns about the running of the business, especially during the succession time.

Hence, in mature family owned business, one is often facing the prospect of succession so vulnerable to decline and failure of the business.