{"id":852,"date":"2021-03-01T17:48:19","date_gmt":"2021-03-01T11:48:19","guid":{"rendered":"https:\/\/agribusinessedu.com\/?p=852"},"modified":"2021-03-01T17:48:19","modified_gmt":"2021-03-01T11:48:19","slug":"importance-of-family-business-in-agribusiness","status":"publish","type":"post","link":"https:\/\/agribusinessedu.com\/importance-of-family-business-in-agribusiness\/","title":{"rendered":"Importance of Family Business \u00a0in Agribusiness"},"content":{"rendered":"

Importance of Family Business \u00a0in Agribusiness<\/a>:\u00a0<\/span><\/h3>\n

\u00a0Family businesses have existed since the beginning of time. The contribution of family businesses has grown over time to include more than just paying taxes and hiring people.\u00a0 Family businesses have made major contributions in three fields over the last century or so:<\/span><\/p>\n

The freedom movement:<\/span><\/h3>\n

Family enterprises played an important role in the independence movement. Firms were founded in the early years to follow principles such as import substitution and economic independence from the colonists.\u00a0<\/span><\/p>\n

Entrepreneurial spirit: <\/span><\/h4>\n

Family businesses have done an outstanding job of preserving the entrepreneurial spirit, especially during the 40 years of quasi-socialism. The engines of growth are being turned by family businesses to a large extent.<\/span><\/p>\n

Philanthropy:<\/span><\/h4>\n

Eventually, family businesses have played an important role in philanthropy. The names of major business groups are associated with philanthropic activities in education, ecology, health, culture, and heritage conservation.<\/span><\/p>\n

Advantages of Family Business in Agribusiness<\/a>:<\/span><\/h4>\n

Trust reduces transaction costs: <\/span><\/h4>\n

It is a well-known fact that trust reduces transaction costs, corruption, and bureaucracy. For a family company, trust can be a major source of competitive advantage.<\/span><\/p>\n

Small, nimble, and easy to respond: Family companies, large and small, have a propensity to react quickly to threats and opportunities. The number of decision-making gates and constituencies to deal with has reduced.<\/span><\/p>\n

Information as a source of competitive advantage:<\/span><\/h4>\n

Many family companies run as sole proprietorships. This is beneficial since a private corporation can see a public competitor’s strengths and weaknesses and behave accordingly, while the reverse is not true.<\/span><\/p>\n

Many Forms of Family Business Include:<\/span><\/h4>\n
    \n
  1. A family-held company is a for-profit corporation in which members of a single extended family own a controlling number of voting shares (or another form of ownership), usually but not always the majority of the shares, or are owned by one family member but strongly influenced by other family members.<\/span><\/li>\n
  2. \u00a0This controlling interest gives the family the power to set goals, strategies for achieving them, and policies for putting those methods into effect. And at least one family member is actively involved in the company’s top management, ensuring that one or more family members have total management power.<\/span><\/li>\n
  3. A family-owned and led company is a for-profit organization in which members of a single extended family own a controlling number of voting shares (or another form of ownership), usually but not always a majority of the shares, or are owned by one family member but strongly influenced by other family members. This controlling interest gives the family the power to set goals, strategies for achieving them, and policies for putting those methods into effect. Furthermore, at least one family member serves on the board of directors of this company, ensuring that one or more family members have a major impact on the company’s course, community, and strategies.<\/span><\/li>\n<\/ol>\n

    How will the Family Business in Agribusiness <\/a>be Saved?<\/span><\/h4>\n

    Almost all management literature and initiatives concentrate on publicly traded and professionally run firms. Despite this, the vast majority of companies are owned and managed by family members. If a family-run company is to exist, let alone succeed, it must adhere to the following guidelines.<\/span><\/p>\n

    Formula Policy Structure and Laws <\/span><\/h4>\n

    (Rule 1)<\/span><\/h4>\n

    Many challenging issues can be explained using a policy process that is part of a succession plan. A succession plan should set out precisely how leadership will be passed down and the requirements that heirs must follow before being considered ready to take over the reins.<\/span><\/p>\n

    Rule 2: <\/span><\/h4>\n

    Families are obligated to represent the guru in business management. Peter F. Drucker created a set of rules that he believes family companies should obey in order to thrive. Non-family members should be considered for important roles in family businesses. The demand for skills and expertise\u2014whether in manufacturing, marketing, banking, science, or human resource management\u2014has become far too large to be met solely by family members, no matter how capable they are. These non-family professionals must have “absolute citizenship” in the company once employed. Otherwise, they would simply leave.<\/span><\/p>\n

    Regardless of how many family members are in the company’s management and how successful they are, one top role must be filled by a non-family member. Usually, this is one of the financial executives or the head of analysis, since these are the two positions that need the most technical skills.<\/span><\/p>\n

    The steps that can be taken to build a shared vision are as follows.<\/span><\/h4>\n
      \n
    • 1) Make a list of each person’s potential dreams and goals. It is vital that each family member recognize and share what is most important to them in an image of their family’s future business. A “Note to One’s Self” is one exercise that can help with this phase.<\/span><\/li>\n
    • 2) Collect ideas for themes. One individual gathers the key themes on a flip chart as each family member reads his or her letter. The individual letters’ themes are then summarized, and major points for a common vision are established.<\/span><\/li>\n
    • 3) These thoughts are then put together into a vision statement. Since writing as a committee is challenging, the family often asks one or two members to \u201cwordsmith\u201d the statement, then distributes it to all, asking them to review it and recommend edits.<\/span><\/li>\n
    • 4) This must be put to the ultimate test by the party. Vision statements are prepared, checked, and then updated after serving as the framework for a family and business action plan. New circumstances can alter the desired future as the company and family develop.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"

      Importance of Family Business \u00a0in Agribusiness:\u00a0 \u00a0Family businesses have existed since the beginning of time. The contribution of family businesses has grown over time to include more than just paying taxes and hiring people.\u00a0 Family businesses have made major contributions in three fields over the last century or so: The freedom movement: Family enterprises played […]<\/p>\n","protected":false},"author":2,"featured_media":853,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[99],"tags":[140,316],"yoast_head":"\nImportance of Family Business \u00a0in Agribusiness - Agribusiness Education and Research International<\/title>\n<meta name=\"description\" content=\"Importance of Family Business \u00a0in Agribusiness:\u00a0 \u00a0Family businesses have existed since the beginning of time. 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