This blog is a response to Victor Leung’s blog Family Controlled Firms Success. In his blog he emphasized on how family controlled firms maintain their success by providing stability through the concept of family in the working environment.
Firstly, I would like clarify that I agree with Victor’s point. The presence of control of the founding family undoubtedly will provide the employees and also consumer with stability and trust. This is proven in the case of Asian electronics giant Samsung, French beauty company L’oreal, and a retail giant Walmart. These companies are very successful, showing the benefits of family influence on the growth on companies. On the other hand, what constitutes as “family controlled” are not very clear as there are no common definition of it. Family influence in a business can come in different forms such as management positions, stockholdings, and board representation. Each of these influence affect the workings of the business in different degrees.
In addition, I strongly believe that the presence of family influence should be cultivated from the beginning, unlike what victor pointed out. Instead of getting a professional takeover during growing and unstable state, family controlled businesses should preserve their corporate structure as it might be very hard to obtain control when the business is already far influenced by other external parties.
References:
http://www.businessinsider.com/the-10-largest-family-businesses-in-america-2011-11?op=1