For example The Genting group and The Berjaya group are two of the most famous family businesses that are conducted in Malaysia. The following are the issues and challenges that are faced by family businesses in Malaysia. The first challenge and issue that affects family businesses in Malaysia is succession planning which is choosing the next successor for the business after the current successor retires or passed away.
Choosing a successor is one of the biggest challenges and is often faced by family businesses in Malaysia. Choosing a successor is hard because there are many factors that need to be considered before delegating him or her to be the successor of the family business. The first factor is of course the capability of the potential successor, to see whether he or she is up to standard andable to handle the responsibility that is about to be passed onto to see whether they qualify for the position.
The second factor is that the potential successor must have certain amount of knowledge about the business and must know every part of operation of the business in details. The potential successor must also have very good management skills and have a good relationship with everyone involved in the business in order to have smoother process when sharing business ideas.
The second challenge and issue that affects the family businesses in Malaysia is family disputes which is the harmony between family members and also within the business. The reason why it is one of the challenges and issues is because some of the family members or people involved in the business are always jealous of each other, or they are angry because of the decisions made which they are unfair, which will then results in political issues happening in the business which can greatly affect the outcome of the business, and sometimes it may be serious until it can tear down the whole business.
So that is why it is very hard to keep the family and business at harmony all the time. However, if they are able to do so, it will help improve the communications between family members and also people involved in the business so that they can share out their feelings and the conflicts more openly so that the conflict can be solved in a way that will benefit the family and the business.
The third challenge and issue that affects the family businesses in Malaysia is professionalism which is capability of keeping the family business up and running for a long term. The other reason is because of the non-systematic work which is caused by bad operation control which can greatly impact the operation of the family business.
However, if management is in good control and the organizational structure is complete and the objective and goals is the same and shared by everyone, the efficiency of the family business will sure improve a lot. Staff training can also improve the professionalism of the family business. The fourth challenge and issue that affects the family businesses in Malaysia is leadership which is basically the compass for the direction of the family business.
It is very hard for family business to have good leadership because it involves leading, involving, and also motivating the people in the family business so that they share the same goal. So, if the leader of the family business is strong, then the chance of the business to succeed will surely be very high.
The first thing is that the good leader must have the stamina and the passion to lead. Besides that, the leader must have a wide knowledge of the economy and also the industry itself so that he or she can direct a most beneficial way for the family business to approach and also giving a sense of common purpose.
In the first place is saving a huge number of small and medium-sized enterprises created by members of the family. For example, there are about 15 million small family firms in the U. First, a family business of this type is created to save money on the wages of employees, as the cost of wage labor is sometimes unaffordable for a newly opened company. The second type is the presence of huge family corporations and holding companies with world-famous names and a prolonged history.
These companies were inherited for many times. England is singled out in this regard. Italy is known for a large percentage of family-owned companies with a turnover of more than 1. There are many advantages of running a family business. The first and probably the main positive aspect is financial gain. Relatively speaking, the members of one family will quickly regain the money invested, if everyone receives income from the same business.
The profit fully replenishes the family budget and is not divided among strangers. Consequently, you will not encounter any troubles and mischief from subordinates or partners, if you are a family. The other important advantage of a family business is that children can be involved in it and they can eventually inherit it. In this case, the tradition of a family business, backed up by the experience of generations, will be a good foundation for business success in the future.
Trust is at the core of a family business. There is always more confidence in relatives than in the incoming employee. Even if the choice is made in favor of a relative, who is often a layperson, a small company significantly reduces its risks. Therefore, a family business always strives to provide relatives with key positions, despite the fact that they have to acquire knowledge and skills already in the process and learn from their mistakes.
The first and perhaps the most important disadvantage from the point of view of business management is unprofessional staff. It is a rare case when all relatives involved in a company are good specialists in the required areas of the company. An ideal situation - a competent director, a professional accountant, responsible and qualified staff, where all of them are members of one family - is almost impossible.
An unreasonable appointment of incompetent people just because of family ties often leads to the collapse of a family business. On the contrary, pride and desire to compete provokes quarrels in the company, and sometimes its complete collapse. Another weakness of a family business is in the relationship within the team. If at home a team becomes a family, at work it is called staff, and relative relations are not always for good. Communication within the family group is facilitated by long-term bonds.
However, at the same time it is very complicated.
Family business is a business in which, one or more members within the management team are drawn from the owning family. Family businesses can have owners who are not family members. Family businesses may also be managed by individuals who are not members of the family.
Family business is a business in which family's involvement is a must, making the business different from others. Many researchers interpret the involvement of family as ownership & management. (Chua et al.,) In a family business, managing the profits and losses are not the only thing that matters.
Family Business Essay example Understanding of “family businesses” in the national context In Germany family enterprises are defined as enterprises where the owner or a member of the owner family also manages the enterprise. Condition is that the person or the family in question holds at least 50 % of the votes of an enterprise. Family council A family council is a governance body that focuses on family matters, frequently developing family participation policies, and dealing with liquidity issues and estate planning family council benefits are -promote communication -provide a safe harbor for the resolution of family conflicts -support the education next generation.
Family business are businesses that are created from their founding fathers of that era, if may evolve from small businesses into big enterprises. Gay Families are Still Families Essay Words | 5 Pages. While a popular catchphrase states that “family is a circle of friends that love you”, from a legal standpoint, the word “family” requires definition.