Institutionalization of Family Businesses

Family Business — SUMMARY

INTRODUCTION

1. FAMILY BUSINESSES

1.5 SWOT Analysis of Family Businesses

2. INSTITUTIONALIZATION IN FAMILY BUSINESSES

  • Family Constitution
    The family constitution is one of the important factors for institutionalization. The constitution of the family is “written and unwritten basic rules for the family and the family’s relationship with the business and it is accepted by the family members who act as a guide in the relations with third parties and the business, who deserve to have the same surname by joining a family with marriage or blood ties. rules and values ​​that apply to all family members in the same way and have certain sanctions if not followed. ”
  • Family Assembly
    It is important to create family assemblies to ensure the institutionalization and permanence of family businesses. The family council is where family constitutions are implemented. The family council is present in large-scale family businesses, and the transfer of every issue related to the business to the family members is carried out by the family councils. Finding a family assembly is important in terms of eliminating management problems in the enterprise to a large extent. This provides institutionalization of the business. The important features for the family assembly to be useful for its purpose are as follows;
  • Board of Directors
    The board of directors established in family businesses is effective in forming the organizational chart. It is the highest level executive body in the enterprise. It is one of the important structures for institutionalization. The management strategy and objectives of the business are determined in this board. In family businesses, the shareholders and the board of directors are generally composed of the same people. The board of directors has three objectives. These are protecting the interests of business owners, creating strategies to ensure the longevity of the business, and being the first place for general managers to consult. Members of the board of directors play an active role in the implementation of the family constitution as in the family assembly. The members of the board of directors should be determined according to their abilities and the training they receive and take parallel responsibilities. Since the members of the board represent themselves as well as their institutions and family values ​​in their business and social lives, they should be familiar with the values ​​of the institution and the family and take attitudes and behaviors towards it. The board of directors should primarily be an organization based on business relations. Board members should be independent individuals who can make objective decisions. People with leadership qualifications should be on the board of directors. If there are no leadership members among family members, external experts can be included in the business or consultancy services can be provided for family members on such issues. The purpose of the board is to clearly demonstrate what attitudes can be against the future opportunities that may threaten the future of the business or the opportunities that may occur in the future. Opposing views may arise from time to time. It is natural to have opposing views and these opinions should be evaluated carefully.

2.3. Institutionalization Problems in Family Businesses

3. PROFESSIONALIZATION IN FAMILY BUSINESSES

CONCLUSION

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