Uncategorized November 10, 2011

Size of family businesses often misunderstood

An academic has described how people will often get the wrong idea if an organisation is described as a family business.

Professor Susan Hart, dean of Strathclyde Business School (SBS), told ft.com that such companies are often much larger than individuals expect, with a sphere of influence to match.

She claimed that family businesses are traditionally treated as small firms, but as well as having the same issues as other large organisations, they have a selection of problems afflicting only them.

Professor Hart explained that they must work out how to professionalise their operations, transfer family values and decide how ownership succession is to be handled.

"Entrepreneurs tend to be running family businesses but such companies are actually quite neglected in terms of understanding of how they work, why they work, why they fail," added the academic.

She made her comments following the launch of a new business degree at SBS created alongside Glenfiddich whisky producer William Grant & Sons.

The potential for longevity at family businesses was demonstrated last week when BBC News reported that butchers RJ Balson & Son in Dorset are the oldest company of this kind, having been established in 1535.

It was announced by the Institute for Family Businesses and current owner Richard Balson claimed that their long-term success comes from being at the "heart of the community". But while they are still a relatively local operation, they have moved into the export business, selling products to certain US buyers among other international markets.

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