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Human Capital In The Family Business: Opportunities and Challenges

Human Capital In The Family Business: Opportunities and Challenges; Human capital, which is defined generally as the knowledge, capacity and existing skills within the company and / or family business. It is one of the most successful family businesses ancient factors. However, the 100K Factory Revolution environment imposes certain challenges as they provide opportunities at the same time in the event of the establishment of a human capital a distinct competitive advantage over the long-term extension. Dr. Philip Seager of the Center for Family Businesses in St. Gallen University in Switzerland, discusses the characteristics that must be considered when analyzing the human capital in family businesses.

While there are many different aspects of human capital-with regard to family businesses, but it will be dealt with two main aspects are as follows. First, human capital provided by the family firm itself of one important factor that should be discussed is. Second, human capital from outside the family is also important to ensure long-term success. There are challenges and opportunities associated with both sides.

Human Capital
Human Capital

At first, the presence and participation of the family of a long-term dominant in the family business, may have positive and negative effects on the human capital impacts. Over time, the family business be able to collect one of the private areas can be transferred through the generations distinct knowledge. More importantly, research has shown that family businesses as well as succeed in the collection of knowledge and unique investment experience, or else the knowledge and skills on how to establish and manage the company on a long-term sense. They may be moved as well as the knowledge to the 100K Factory Revolution Scam members of the next generation. This leads to a more comprehensive view on the issue of succession: Thus, effective Caliphate does not include only the transfer of assets, but also include the transfer of mental outstanding entrepreneurial abilities and possibilities associated with it. The main challenge is in recognizing the family business for its role with regard to human capital. Accordingly, it must make a clear and systematic improvement of the human capital that exists within the family. Moreover, family businesses must always be careful not to join the family company unless they are on a high degree of commitment and qualifications. Thus, you should develop guidance and clear policies about when and how and under what circumstances the family can join the company. Important aspects is the required level of education and experience gained outside the family company and the job is initiated, including professional and tracks available within the company’s ongoing evaluation of performance. Is joining members of the family are not qualified enough to the company may spend on human capital base for the family over time.

Referring to the second main aspect of human capital in the family business, it is clear that companies are growing much faster than the families that owned pace. And therefore can not be a family company providing a sufficient number of family members eligible to fill all positions in the company to expand and grow in size with time, and thus it becomes to recruit staff from outside the family imperative.

On the positive side, family businesses can deliver a unique atmosphere for the promotion and support of knowledge, skills and abilities of staff belonging to the family. Family businesses are often characterized by a strong and very ancient cultures, which makes it even individuals not belonging to the family feel as if they were part of it. The long-term trend of family businesses and the lack of “recruitment and dispensing later” policies often contribute to creating a climate where can Alttaiwiralamnahja of human capital in the long term.

On the negative side, the family business environment might become a hindrance when it comes to attracting and keeping employees on a high degree of competence and training from outside the family. In a family business, you may be booking top positions prestigious family members; for example, a family business may decide that the person holding the post of Executive Director should be a family. This relates to the homeland of another potential weakness, namely nepotism or preference. When family members get preferential treatment with regard to salary or promotions within the company even if they were on a lesser degree of efficiency compared to employees from outside the family, this may lead to a feeling of employees from outside the family of injustice. As a result, they may wish to leave the company, which could lead to loss of human capital. And gaze on this, if known of these practices, potential employees of competence and qualifications employers were reluctant to join the family of the foundation of the company. In addition to this 100K Factory Revolution Review it is often family businesses opposed to the idea of ​​shares to employees from outside the family because they do not want to weaken their grip on the company, which is one of the basic conditions for survival as a family company. Thus, the staff is aware of outside the family that he would not have the chance to own a significant equity stakes at all as they will never practice especially dominant majority rights. As a result, these employees may be more receptive to offers made by rival companies allows them to own a significant share of stock. It is natural that seeking employees to own shares of stock, at least in the long term would be reluctant to join the family business from the ground up.

The bottom line is that it can family businesses create a unique competitive advantage by fostering human capital, both within the family or outside. Within the family, you must make a kind of systematic improvement on the knowledge and experience of individuals and enthusiastic young people interested in the company’s generation, and at the same time the rules and procedures are clear with respect to the probability of joining the family firm application. For employees from outside the family, the family businesses should try to take advantage of the features have access to human capital from outside the family as well as the preservation and development of the long-term.

Employees must be intuit from outside the family that they can fully develop their abilities within the family business, any other words that fill the posts depends on qualifications rather than kinship. Moreover, the ownership of the company’s shares for a limited circle of employees may be an idea worth considering. However, it may not achieve formal ownership alone the desired results. More important than formal ownership is that family businesses focused on creating a sense of belonging and cohesion and moral ownership among the staff. This may increase the chances of getting the workforce to a high degree of knowledge, skills and loyalty to contribute effectively to the competitive advantage of family businesses and their success in the long term.

Discover How To Compete In The New Global Market

Discover How To Compete In The New Global Market The dynamics of the global economy has created multiple opportunities for Middle East family businesses. With its commitment to fight the areas

In Rubix Project can family businesses to take advantage of intangible assets (such as financial resources) and intangible (such as culture and values ​​and the like) when its expansion beyond the borders of their own home. In Figure 1, we focus on the many activities that increase the likelihood of successful international expansion.

Family Businesses
Family Businesses

In mind the strategic results of various global movements With the direction many Tesler Trading System companies toward building international commercial operations and seek a presence in foreign markets, increasing pressure on the owners and leaders of the Middle East family businesses to do likewise. However, as explained in Figure 1, it may be for this decision serious consequences. The decision must be to internationalize the operations of these companies stem from and directed basically have a clear vision.

Initially vision. Family businesses typically seek to achieve the objectives of physical and non-physical which is important for its members and keep their participation and involvement in it. Often this results in the presence of pressure in the functions of these companies performance. It must not lead this expansion to the loss of control and domination of the royal family of the company, and thus reduce the severity of a major source of contention within the company and its royal family. In fact, it can be to succeed in international markets that have the greatest impact in improving the standing and reputation of the family in the domestic market the company. This has led to many of the family join the Middle East in a series of acquisitions and joint ventures operations in the Middle East and North Africa region as well as companies developing countries. These companies also worked on international expansion in industries and / or other parts of the world through relationships and contacts with individuals and branches of expatriate / migrant families. Some of these transactions allow family businesses to hedge against potential business risks in light of unstable global economy.
Figure 1
Successful strategies for the expansion of the Middle East family businesses internationally

The study of the strategic results of various international movements
Initially vision.
Invest time in learning
Nscheromcharkh what has been learned
Linking business in global markets: Thinking capsular
Construction and development of a positive reciprocal relations
Avoid deadlock situations and relationships of reciprocity negative
Entrepreneurial capacity building and take advantage of them
The importance of culture and organizational structure
Increase and enable talent and mental capacity
Activating the participation of employees from outside the family
Take advantage of the relationships and contacts to create value
The establishment and activation of multiple types of relationships and communication
Investing in maintaining these relationships

Enjoyment of sense selective in the use of various communications and relationships: some are more useful than others in certain situations

Success requires clarity of strategic reasons and factors that drive family businesses to internationalize its operations. What do you aspire to achieve the company and the royal family to her? What will the company’s family of global markets? What is the impact of internationalization on the operations of the company and its values ​​and identity? This simple but important questions and management must be taken into pursue international opportunities and external expansion. Without taking into strategic for these efforts to build a presence on the international level and to develop new capabilities and maintaining the company’s transactions over generations, the family firm might fall prey to international movements that reduce the value and lead to disperse. It requires the acquisition of the value of international activities accommodate unique organizational, financial and technical challenges that must be dealt with.

As described in Tesler Trading System it provides a clear and coherent important Middle East family businesses make wise decisions about potential international partners. Family businesses tend to deal with other family businesses, especially those that have goals and values ​​and investment prospects similar. The strategic clarity about what you want to achieve the company may help in the evaluation of potential partners and their abilities and their credibility as well. These assessments require bypass numbers to reach an intangible aspects such as quality of management and the strength of the institution and the incentives and skills balance of talent and compatibility values ​​with those of the company. When you perform these analyzes, does not reflect the numbers alone for the whole picture.
Invest the time to learn it takes a lot of time internationalization necessitates the allocation of its resources. Fortunately, many of the family businesses adopt a long-term approach when making decisions in order to maintain the company for future generations. However, the management of “attention” factor is a strategic necessity when it comes to internationalization. Concomitant administration’s preoccupation with international expansion and focus on consensus results from markets and customers. Leading to the omission of some of the directors of family businesses the opportunity to learn from international experiences. Managers need to study and analyze their decisions when engaging in social learning experience (What drives customers and competitors to act on a particular) and technical (about how to build their capacity when creating Mentajathm When systems) mode. The managers also need to learn how to organize their operations and operational arrangement diversified their activities and linkages between these activities.

Learning is a major source of new information which supports the growth of family businesses. Analysis of trading, successful and unsuccessful, deals may be a great source of learning, which is the basis for success.

Publish and share what has been learned that learning (ie acquiring new information) alone is not enough to succeed in international markets. As it is shown in Figure 1, setting calls for managers to create systems and processes to record what has been learned and distributed to all members of the institution. The dissemination of best practices that have been learned is the need for Lastvadh from the experience of internationalization. As well as the lessons learned from the successes and failures on the degree of importance is also considered. Also it provides “smart cases of failure,” by those events in which the company learn from important opportunities to learn and then recording and dissemination of what has been learned. Failure is commonplace in the private internationalization process for the Middle East family businesses that do not have a lot of experience in international markets. Managers realize they need to understand how to minimize the chances of failure in the future and how to incorporate lessons learned in the way of thinking in place within the organization. Intelligent learning happens when you learn to members of the company (the royal family of the company and employees) from the disappointing events of the hopes and successes and then they apply what they have learned when making decisions. In family businesses, the organizational memory is usually established through different generations. This is a characteristic and should these companies take advantage of them when the internationalization private institutional learning.
The publication of what has been learned the need to create value. However, managers are often reluctant to share what they have learned with their staff in the belief that what they have learned is a point of their distinctiveness. Family businesses do not want particularly to share what I have learned with staff from outside the royal family of the company. This works on the staff their isolation and at the same time depriving the company of their talents and abilities. In contrast, share information and provide an important way to clarify matters and to formulate a causal explanations of what happened and to develop strategies to bring about an effective and influential change.

Linking and building reciprocal relationships: Thinking capsular: family usually companies follow a series of activities for the establishment of international commercial operations like that of many other companies, where the start of this companies usually as companies exporting: grant licenses for its products and technologies, establish distribution channels, and eventually establish operations operating in overseas locations. Often they join these companies to establish alliances and joint ventures to enable them to enter new markets and acquire modern techniques and improve their experience. During the company of all these activities, it is easy to fall victim of the violation of the simple and believes that both management activities is essential indispensable logic. While it may be for some of these business dealings difference in the failure or success of the company -as effect is illustrated in Figure 1, but it is necessary to consider linking these transactions, including the development of correlation. This reciprocal relationship is as a bonus that the company Sthsdha of connecting and coordinating international commercial operations. Link may be represented in the form of a coherent strategic direction adopted by the company and the family (where do we go?), And operational efficiencies, as well as complementary actions that result in physical and non-physical value (HE family and their satisfaction).
However, the management of a portfolio of international activities is not limited to only the money and finance. For family businesses, often it comes to creating a new set of opportunities, and the development of capabilities that can be used in various fields of work, and provide business models able to change the fabric of the industry and competition. This overwhelms the angel of the owners and leaders of family businesses where you must possess insight brilliantly to see the future before it happens, and should enjoy the spirit of innovation to transform resources into capabilities, as well as intelligence in directing capacity to grasp the opportunities given.

It is also important for family businesses to avoid deadlock situations and relationships of reciprocity negative value had been destroyed, as shown in Figure 1. This is evident negative reciprocity relations when conflict occurs between two activities or more, weakening of the value of international operations as a whole. For example, a family company may seek to increase the flexibility of the various units by giving each of them the independence of the central decision-making about their own markets. This excessive autonomy may hinder the effectiveness of decision-making and speed of response, and thus reduce the company’s gains from the process of internationalization. The “rigidities” when he talked normally hinders a certain company’s strategic move from the pursuit of other options. For example, you may be getting an exclusive contract for the distribution of products well-known foreign companies feasible, but it may also limit the company’s ability to do other choices with the market change. It is likely to encounter some family companies Middle East this position due to the limited experience and lack of ties and contacts and the presence of nepotism and a lack of alternatives factor.

International operations Family Business Group management requires a focus on internal operations, management and governance systems in place already. With the growth of these operations, there will be a need for structures and new systems and processes to ensure the synchronization and to collect and distribute information in a timely manner, as well as make decisions effectively and intelligently. This makes investments in technology and information systems as well as the existence of effective governance systems worthwhile. Equally important, the company’s various royal family members participate in certain areas become necessary to develop their talents and to ensure their understanding of how this process of internationalization.