Thesis (MBA)--Stellenbosch University, 2014. / Family businesses struggle to be sustainable over multiple generations. In fact, most family
businesses do not survive past the second generation.
With this study the goal of the researcher was to provide family businesses with a conceptual
model which could assist them to become multi-generational financially sustainable. This goal was
achieved by answering the main research question, namely: What are the critical elements that a
family business should consider continuously in order to ensure multi-generational financial
sustainability?
Those critical elements that a family business should consider were firstly explored through a
literature review process. From this literature review a preliminary conceptual model was
developed.
Secondly, seven family business experts, with a total of 176 years of family business experience
among them, were selected in order to gain their perspectives on the critical elements that family
businesses should consider to be sustainable over multiple generations. They were also requested
to evaluate the preliminary conceptual model and were invited to make suggestions for the
improvement thereof. This exercise provided the researcher with ample information in order to
create a valid final conceptual model, which in this study is referred to as: The Family Business
Success Map.
During the final part of this research study, the Family Business Success Map was applied to an
existing multi-generational family business in order to evaluate the processes which it followed
during two situations of succession, and some recommendations were made.
This study can contribute towards the field of family business management through the
development of a conceptual model, the Family Business Success Map. This can be used by
owners and advisors to help family businesses to implement those critical practices that successful
multi-generational family businesses have followed.
The study found that family businesses needed to become more structured and professional. It
further found that there were five critical practices which successful family businesses followed in
order to be sustainable over the long term. Those five critical practices were conceptualised in the
Family Business Success Map.
The basis for all five practices is good governance, transparent communication and an
entrepreneurial orientation. The challenge for family businesses is to grow their businesses faster than their families. In order to accomplish this, family businesses need to invest continuously in the
entrepreneurial development of their management.
This study found that the first practice which successful family businesses followed was that they
formally planned for succession. This plan should clearly state what the ground rules of succession
are and should be revisited and adjusted continuously. The plan should provide for both ownership
and management succession.
The second practice which successful family businesses followed was that they were governed by
Advisory Boards. These boards should meet regularly and should preferably include some
independent members. Continuous development of board members is important. This forms part of
the critical element: the practice of leadership.
Furthermore, it was found that the third practice which successful family businesses followed was
that they had a formal strategic plan in place. They also recommended that the trusted advisors of
the family businesses should be involved in the process of formulating the strategic plan.
Family harmony, the fourth critical practice, could be accomplished through transparent and
comprehensive communication from the businesses to the families. Through the establishment of
formal family meetings, family matters that were not business-related, could be dealt with.
The last of the five critical practices which successful family businesses followed was the use of
cost accounting management practices, not only in their normal business decisions, but in strategic
decision-making as well.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/96218 |
| Date | 12 1900 |
| Creators | Mienie, Carel Johannes Hendrik |
| Contributors | Ungerer, M., Stellenbosch University. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | xiii, 73 p. |
| Rights | Stellenbosch University |
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