Literature Review 'Family Business Sustainability' Essay

Literature Review 'Family Business Sustainability' - Essay Example Frequently a dichotomy is made amid the "family" and "business" where these two aspects forms distinctive subsystems which interact so as to form a complete structure named "family business". When family forces and business forces demonstrably interrelate and impact one another, then scholars agree that a blend is exists among the two aspects, implying a new and exclusive system which is termed a family business. Previous studies sought to define family business in relations to ownership or management and the controlling systems, and also intergenerational transfers, this view offered some insights into the manner of business. (Rosenblatt, 1995) However, this approach had some limitations, currently there has been a shift on how a family business is described and the focus presently is on establishing the business intention and its vision as ways of knowing is the business can be defined as family business. Alongside this new "strategic" perspective of a business, there is also a new approach which looks on the resources (capital, human, knowledge, materials) accessible to a specific business as a method of determining its standing. Resources based view (RBV) of a business suggests a business is a "family business" where the function of a family has a confirmable effect on role and also performance of a particular business. Though the past definitions and descriptions have not been completely replaced, there is a current change in analytical basis to encompass significant elements of business practice, for example visions, culture and intentions. (Rosenblatt, 1995) Business management of family business Business management of family businesses varies deeply from the management of broadly held public businesses. Family owners focus on management and also facilitates making of decisions, that can equally lower management costs and allow unusual though strategically beneficial decisions. (Rosenblatt, 1995) A well-functioning business system assist build trust and conviction in the family, and a excellent family dynamic, which in turn is an asset to the family business since it enables every separate part of management to work better and be able to add extra value whilst remaining inline with the different constituents of the management system. These management benefits can present apparent economic gains. (Rosenblatt, 1995) Nonetheless, a rising business turns into more and more complex and crafts its own requirements for a further formal organizational arrangement or structure. At such a time Family business managers have to adjust their management practices as a result. Certainly, success compels the want to adjust and modify, and every one of family businesses finally face this truth. (Rosenblatt, 1995) The character of Family Ownership Family members mainly have a high focus on management and leadership, on top of having a high emotional connection to the business. A family could have a feeling of moral commitment to other business stakeholders, or view the family business as means for creating a positive input to community. Furthermore, family members at