The success of family-controlled firms have surprised many people as most management experts expected that such firms will be taken over by professionally-run firms due to their better ability to raise capital and attract top talent. In fact, family firms are able to remain its importance and have been increasing in the recent years.
This is because family controlled firms are able to maintain stability with the existence of one dominant force, the family. This prevents significant shifts in the company’s operation while controlling the shareholders. Such stability gives promises to the workers and builds a good business image. Besides, most family controlled firms are large in size and have sufficient money, which allows the company to maintain its operation, reducing the change to its minimum even after the change in owner of the company. This also allows the company to keep many of its working cultures.
In my opinion, the efficiency of “family effect” depends on the company’s situation, and also the successor’s ability. If the company is a still growing and unstable company, and the successor has poor business ability, this might lead to the failure of the company and it would be better to let the professional to take over. On the other hand, it is a strong and stable company, it would be better for the family to keep running the company as it brings stability and reduces risks from changes
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