The Family Business

Manuel Bermejo. Professor. IE Business School

31 October 2007

There is much talk about family businesses which is all too often of the negative variety, when they have much to recommend them.

Many of the franchises operating in Spain and many of the most successful franchises worldwide correspond to family-run businesses, or, in more general terms, companies controlled by a family group.

Nowadays, the family business is in vogue, it is given space in the press and is the subject of debate at universities and business schools and in economic and business forums.

Often, when a family business is the subject of a consultancy project academic research, the typical problems of the family-run business are always highlighted. This gives the impression that the family business is simply a source of problems. This somewhat negative approach may come from the fact that the study of the family business began in the area of psychology and attention focused on the conflicts arising in this unique type of organisation. It is also true that the death rate of family businesses is very high and the cause often lies in the poor handling of conflicts between the people involved. However, we must not forget the errors that result from a lack of strategy, slow adaptation to new environments and, in short, problems that have to do with the management of a business, be they family businesses or not. It is also true that family and business do not always go well together.

We would like to point out, however, the huge contribution made by family businesses to the creation of employment, wealth and well-being. Long-term vision, commitment, honesty, austerity and the creation of social purposes represent values that are inherent to many family businesses and the people running them. Undoubtedly, these values are far removed from purely speculative proposals of dubious ethical value.

I would like to take this opportunity to offer my public recognition of the role that so many family businesses play in Spain. In today’s scenario of advanced societies, the entrepreneur´s role is crucial for guaranteeing economic growth, and the social role of the family entrepreneur is, and will be, of key importance for building modern societies.

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