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Designing For a Better Family Business

Designing For a Better Family Business. Prepared by: Ala’a Istaityeh Aya Aburabie Balqees Falah Supervisor: Dr. Ramiz Assaf. Contents. Introduction. General Background.

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Designing For a Better Family Business

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  1. Designing For a Better Family Business Prepared by: Ala’a Istaityeh Aya Aburabie Balqees Falah Supervisor: Dr. RamizAssaf

  2. Contents

  3. Introduction

  4. General Background • Family Business: Owned and managed by family itself; the grandfather, the children and grandchildren. (Androf. (2004).) • Considered as one of the most important pillars of the Palestinian economy, and basic component in the private sector. • Offer significant opportunities for future generations. • Give a chance for boldness and speed in the decision-making process.

  5. Percentages of Family Firms Around the World (Anabtawi, 2012)

  6. Problem Statement • In general, there’s ongoing concern that these firms don’t withstand for more than the 3rd generation in most than %97 cases of the world. • Specifically, the reason that make this study an important one, is that since more than 90% of firms in Palestine are family businesses, which have a major role in the economic field.

  7. Survival Rates of Family Firms (Anabtawi, 2012)

  8. Objectives

  9. Literature Review

  10. Literature Review • Family business is a subject of thorny that a lot of studies around the world discussed it from different sides. • Great companies in the world are classified as a family business, such as Mars, Siemens, Motorola, Ford, Samsung, Wal-Mart and others.

  11. Family Business Definitions in Literature

  12. Success & Failure Reasons according to Literature

  13. Methodology

  14. Methodology • This study was conducted between February and November of 2013, on industrial and commercial companies. • Information needed was quoted from: • The 2nd family businesses conference. (Nov.2012) • Visiting the Chamber of Commerce and Industry in Nablus. • Previous studies. • Interviews.

  15. Cont.. • Sample of 16 different companies in Nablus and Ramallah. • Standard questions to all family firms. • Interviews showed the urge of discussing and analyzing one of these companies as a case study . • Analysis included different stages: • Comparing with literature. • Finding success & failure Reasons • SWOT Analysis. • Creating new tools. • Continuity index tool. • Radar Chart • Solutions for main problems.

  16. Results

  17. Success Factors according to Owners

  18. SWOT Analysis

  19. SWOT for Success Companies

  20. SWOT for Acceptable Companies

  21. SWOT for Failure Companies

  22. Our Work….

  23. Continuity Index Rating Tool • Based on Scoring system. • The scoring process is from (0-10) : • (0 - 3): Collapsed or in the Way to Collapse. • (4 - 6): Average Status or Medium. • (7 - 10): Best Continuity Status.

  24. Position - Cash Matrix • Based on Continuity Index Rating Tool

  25. Radar Chart • Applying the average scores of categories on a sample of the interviewed sample.

  26. APPLYING OUR TOOLS ON CASE STUDY

  27. Comparing between F & BF F’s Main Company’s Scores BF’s Company’s Scores

  28. Cont.. F’s Main Company’s Scores BF’s Company’s Scores

  29. Cont.. F’s Main Company’s Scores BF’s Company’s Scores

  30. Cont.. F’s Main Company’s Scores BF’s Company’s Scores

  31. Radar Chart for F & BF Company

  32. Solutions for Main Family Business Problems

  33. Conclusion & Recommendations

  34. Conclusion • Finally, this is not all about family business and nothing can summarize its whole status. • In this presentation we took a step to help & support family firms. • This step is the first step where other researchers can start from.

  35. Conclusion

  36. Recommendations

  37. Cont..

  38. Recommendations from Successful Family Business Owners

  39. Cont..

  40. Questions were asked to the family business owners: • What is the scope of your company? • Who’s the founder of the company? • Can you tell us the foundation story of the firm? • What was the motivation? • How did it start? • What was the future vision of the company? • Is the company registered in a formal registration? If not, how is the distribution of quotas? • Was there a distribution mechanism accoutrements authority between individuals? • Is there a constitution family includes (responsibilities system, distribution of profits, and audit within the company)? • Is there a special salary system for working family members?

  41. Cont.. • Was there previous generation training? • Was the function of each individual suits his qualification? • Is there any orientation for the next generation to specialize in special fields relate to the business? • Is there a periodic meeting between company’s family members? • Is there a separation between private and company’s fund? • What’s the company organizational structure? • Is there any separation between ownership and management? • In your opinion, what are the main conflicts in family business? • In case of quarrels, what is the main reason of conflict? • How did you solve the conflict?

  42. Cont.. • In your opinion, do family companies need external interpose (laws, governmental interfere, chamber of industrial and commerce)? • How do you satisfy the non-family members? Do they take into consideration their opinions? • Is there any special way to deal with them in order to increase their loyalty to the family firms? • As an owner of family member, do you accept to have a qualified person in a management position of non-family members? • Do you believe in the role of reform committees?

  43. Bibliography • Abu Baker, M. (2003). The role of the Charter of the Council of the family in the stability and growth of companies. • Abu-Kharme. (2013, February 7). Interview with a member of Abu Kharme. (B. A. Alaa, Interviewer) • Al Masri, H. (2013, February 5). Interview with CEO of Al masri Company. (A. a. Alaa, Interviewer) • Alby, F. (2011). Methods of Collecting Data: Interviews & Questionnairs in Practice. • Alcon. (1982). Success and Survival in the Family Owned Business. New York : McGraw-Hill. • Amann, B., & Jaussaud, J. (2012). Family and non-family business resilience in an economic downturn. Asia Pacific Business Review, 203-223. • Andrew. (2009). Understanding Family Business. Institute for Family Business (UK). • Anhui. (2012). The truth of the world's top family business. • Arraiies, S. A. (2004). The restructuring of family businesses. • Astrachan, & Millan, M. (2003). • Babacky. (1987). Consulting to the Family Business. Journal of Management Consulting, 25-32. • Benard. (1975). The Development of Organization Structure in Family firms. Journal of General Management, 42-60. • Bracci, E., & Vagnoni, E. (2011). Understanding Small Family Business. • Brookline, F. F. (2012). Family Businesses, Succession Planning. • Calabrò, A. C., Cruz, C., Mussolino, D. M., & Voordeckers, W. (2011). Family Business Research. EURAM. • Chua, J. H., Chrisman, J. J., & Sharma, P. (1999). Defining Family Business by Behavior. • Danes. (2005).

  44. Fahed. (2013, February 5). Interview with Fahed's Member. (B. A. Alaa, Interviewer) • Hijjawi. (2013, March 10). Interview with CEO of Hijjawi Company. (B. Alaa, Interviewer) • Holland, & Oliver. (1992). An Empirical Examination of Stages of Developing of Family firms . Journal of Business and Enterpruenership , 27-38. • Kachaner, N., Stalk, G., & Bloch, A. (2012, November). What YouCan Learn From Family Business. • Khalili, A. (2013, February 7). Interview with Al Khalili member. (B. A. Alaa, Interviewer) • Kilani, A. (2013, March 2). Interview with Al kilani Member. (B. A. Alaa, Interviewer) • Klein, P. D., & Ward, P. J. (2013). Keeping the family in family firms. Retrieved from www.egonzehnder.com. • Louis, R. H., Williams, C., & Savlov, J. S. (2012). WHY DO FAMILY BUSINESSES FAIL? Saul Ewing. • Mesleh, K. (2012). Palestinian Family Business. Nablus. • Nolan, & Goodstein. (2004). • Poutziouris, P. Z. (2006). Handbook of Research on Famil Business. • Poza, & Ernesto, J. (2004). Family Business: What Makes It Unique? Family Business. • Shahla, A., & Tabba'. (2012). Family Business companies. • Tarhan, E. I. (2008). Conflicts and communication problems in family owned business. • The Unique Qualities of a Family Business. (n.d.). Business Management Consulting. • van der Merwe, S., Farrington, S., & Venter, E. (2011). An Assessement of selected family business value in small and medium sized family business. • Ward, J. L. (2009). Ten Decrets of Successful Business Families. • Yaesh, A. (2013, February 5). Interview with CEO of Yaesh Company. (A. a. Alaa, Interviewer)

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