How Families Choose Successors - Dissertation Example

When man began to venture into trade and commerce, little did it strike him that business was a means of being together and a factor that contributed to happiness and growth. Gradually members of a family would get together and share responsibilities to ease the workload on a single person. The most influential person of the family would normally be the business head. Family businesses are among the most important contributors to wealth and employment in virtually every country in the world, and this was no exception with the Chinese (IFERA, 2003; Sharma, 1997; Tan & Fock, 2001; Ward, 2004).

So influential is a family business, that many countries now have more and more family businesses contributing to the national economy through tax payments. What does one mean by the term family business? Following Chua, Sharma, and Chrisman (1996), a family business is a business governed and/or managed on a sustainable, and potentially cross-generational, basis that shapes and perhaps pursue the formal or implicit vision of the business held by members of the same family or a small number of families.

This definition derives prominence for its importance from a strategic management perspective; it implies that there are goals pursued a strategy to fulfill them, and a mechanism in place to implement the strategy and control of the firm’s progress toward the achievement of its goals (Pramodita Sharma, James J. Chrisman, and Jess H. Chua, p.2, 2005) In fact, family businesses are fast becoming the most dominant form of business enterprise in both developing and developed economies and their influences, as well as their numbers, are expected to increase substantially in the near future (Ryan, 1995, p. 12). Family businesses are more reliable, short of misunderstandings, and can in most cases be accepted to be trustworthy and reliable.

As in most countries, the overwhelming majority of these family businesses are small or medium-sized (Bjuggren & Sund, 2000; Gersick, Davis, McCollom Hampton, & Lansberg, 1997; Hume, 1999). However, because these businesses are a primary contributor to the economic and social well-being of all capitalist societies, their lack of longevity has been a cause for concern. The figures are relative, but they reflect a sense of articulation.