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Are family businesses better?

Family businesses are special, the life of those who work in them and the entrepreneur who created them to the extent that, within certain limits, they are managed by special approaches. It is true that in family businesses, i.e. those created by a family who has invested everything in them, and not only in material terms, there may be an atmosphere different from others. Yet accounts and balance sheets have to be drawn up according to the same rules and the market bows to the same schizophrenia, to the same stimuli, whether it is tackled by a public limited company or a manufacturing company with sole partner, set up by the father and handed down to the son.

Understanding the movements of those which could be called “corporate families” is however important. This is what, from a particular viewpoint, Lori B. Gervais and Roger G. Gervais have done in Maximize What You Have Built. Overlooked issues in family businesses, a study of a few pages which, through a series of interviews with entrepreneurs, managers and consultants of family businesses, identifies the particular entrepreneurial approach with which this type of firm is run.

The two authors explain in a crucial passage that the owners of family businesses have a different genetic make-up. Business for them, more than a way of supplying means of subsistence, is the love of their life and the great plan for supporting their dreams. Dreams therefore and also balance sheets, obviously, and more. According to the analysis in fact there is a strong aspiration within these firms to create opportunities for members of the family.

The interlinking of corporate problems and family questions, production needs and personal emotions, shapes this particular type of business. However the dyscrasia between “family” goals and “corporate” goals at times becomes too extensive and unsustainable or in any case risky. Without mentioning, as instead the study does, the aspects linked to the handover from one generation to another.

Corporate equilibrium and corporate culture are therefore brought into discussion and display their complete fragility.

Lori B. Gervais and Roger G. Gervais seek to understand how and why and the way of solving this, succeeding in mapping out the situation of many family businesses with the effective image of the possible drawing of a line in the sand which nobody wants to cross.

Maximize What You Have Built. Overlooked issues in family businesses

Lori B. Gervais, Roger G. Gervais

The Gervais Group, Robert W. Baird & Co.

April 2013