Entrepreneurship in Family Owned Businesses

Family businesses are unique entities characterized by their governance, ownership, and operational dynamics. Here's a breakdown of their key characteristics and the types of family businesses.

Characteristics of Family Businesses

Members: Managed by individuals from the same family who own and run the enterprise.

Position of Members: Roles within the business are often determined by family relationships.

Control: Predominantly under family control due to major shareholding.

Mutual Interest: Business policies are influenced by the mutual interests of both the firm and the family.

Involving Multiple Generations: Management and operations are passed down through generations.

Mutual Trust: Essential among family members, rooted in shared values, business ethics, and orientation.

Integrity and Transparency: Defined by strong moral principles, commitment to business goals, and transparency in operations.

Types of Family Businesses

1. Family Owned Business- Characterized by a significant controlling ownership stake held and controlled by family members.

2. Family Managed and Owned Business- Ownership and control lie within a single family or individual member, allowing the family significant influence over objectives, policies, and methods.

3. Family Led and Owned Business- Ownership may reside within the family, and at least one family member participates in the company's board of directors, influencing major strategic decisions.

Family businesses play a crucial role in the global economy, blending familial governance with corporate practices to create distinct operational and management models.