Family and Non-Family Businesses Leaders - Essay Example

Family business leaders and non-family businesses leaders al affiliation Family business leaders 1.0. Introduction In the private sector, family businesses have been operational for a very long time. In light to this argument, family businesses have continually hit public discussions, in an attempt to understand their operation methodologies as well as, find out their contribution to the country’s economy. Nonetheless, it has proven extremely tasking to gather information on family business as most of the information emanates from the individuals as well as, opinions from various experts, who at times are biased. In fact, a majority of analysts and researchers have attested to the fact that, it has been extremely tasking to compare and contrast the methods of operation of family businesses. It is evident that leadership in family business has been debated by countless people. However, it is alarming how the theme of leadership in family business has been neglected. Most researchers and analysts focus on the ownership of family business, ownership amongst others(Rouvinez and Ward, 2005). Family businesses are of varying models. This essay shall highlight on the characteristics of leaders of family business, and their difference from the leaders in non family business. 2.0. Body The major difference between family business and non family businesses is that, family businesses are need oriented while the non family businesses are goal oriented. In this perspective the types of leadership skills tend to differ. Unlike in non family businesses, the leaders work on the grounds of need orientation. This is an interpretation of a democratic leader who does not work on the basis of making their own decisions, and imposing them on their employees, but act to please all family members who have contributed to the business. Ward (2004) argues that, family businesses are driven by virtue of attaining needs of the organization or an inward attempt to attain the goals of the organization. This is different from the leaders of non family businesses who act in accordance to handling the opportunities that may come along the business. Since non family businesses are opportunity oriented, the leaders tend to be authoritative, unlike democratic. This is in relation to the fact that, the leader needs not to impress the other board members, as are not of the same family. Family businesses operate under the mercy of related individuals while the non family business operates without family ties (Rouvinez and Ward, 2005). In the family business, it is important that the leaders develop honest attributes in terms of human resource management. For the family business, it may be extremely difficult to fit in the global economy, unlike in the non family businesses. In this context, therefore, the leaders of family businesses have to embrace the skills of mobilizing its members of staff towards attaining the goals of the business. At times, it may be extremely difficult of the leaders to manage its staff from the fact that, they are related. In response, the managers must at all times, stick to the decision of coming up with a strong team, and endeavor to ensure that the inputs in the business are objective, and at the same time maintain the values of the family. This task may be a bit challenging to family business leaders, as they have a one on one relationship with the family members while carrying their leadership roles. According to Aronoff (2005), family businesses are keen to changes that may take shape in the organization, as these changes may completely disintegrate the entire family. The non family business is not too keen on changes that are likely to cause massive long term effects on the business. In his work, Ward (2004) indicates that, leaders of family business must always be keen to manage all forms of changes that may exist in the family business. On the other hand, the leaders of non family business may not be keen to perform this role as there is no family name to be tarnished. It is exceedingly difficult for family business leaders to deal with globalization and worldwide issues that come along with the business. In this context, therefore, family business leaders must be witty enough and devise methodologies that maintain the name and brand of the family business. Such managers must always be keen to trace the history of the business, in order to, establish proper working plans that can assist in accomplishing objectives of the business. Since family businesses operate within the confines of family relations aspects of innovativeness and creativity hold much importance, unlike in the non family businesses. Family business leaders must be extremely innovative and creative whilst conducting their roles. This is for the reason that, it becomes difficult to maintain the core values of the business, and still maintain the core values of the family. These managers work on the grounds that, for the business to be successful, they have to confine their roles on maintaining family values of the members of the family. This differs from leaders of non family businesses that do not have to work in tandem with the family values. Aronoff (2005) indicates that, family business leaders must endeavor to uphold the values of the business, as well as, ensure the identity of the business is always reinforced. Leaders of family businesses ought to be consistent in conducting their roles. In the context of family business, Ward (2004) indicates that, it is important that leaders are consistent if they have to retain the name of the business. It is evident that leaders in the family business have to consistently shift from the normal perception of acquisition of profits to develop and support all the members of the family. Family businesses, dissimilar to non family businesses, operate within the confines of personal relations; thus, the leaders have no option but to be consistent in their operations towards ensuring all members are rewarded. On the other hand, the leaders need to be consistent in their operations, as the rewards offered to members in the business have no form of systematic evaluation. In this case, managers of non family business will be less concerned with the evaluation process of the businesses, as the rules and regulations of the business are formal and written. On the part of the family business, it is the contractual obligation of the leaders to ensure that, the members work towards attaining the goals of the business, as the rules are informal and the leaders must be very meticulous in terms of dealing with the other shareholders of the business. Ward (2004) indicates that yet another characteristic that distinguishes leaders of family business and leaders of non family business is the commitment characteristic. In the family business, the leadership role performed is lifelong and is always dedicated to lifetime existence and operation of the business. The leaders work on the basis of identity with the family and cannot alienate the fact that, the family cores have to be respected and adhered to, at all times. In the case of non family business, the managers are less committed and perform short term roles. In these businesses as well, the leaders operate on the grounds that, they need to paid or given good rewards so as they perform. In these two scenarios, it is impossible that, the leaders portray the same attributes. By virtue of conducting a life time job, it is becomes almost impossible for family leaders not to be committed and motivated. This emanates from the fact that the relations between the two forms of operation are totally different. In the family business, the leaders operate on a completely deep and personal ground, while in the non family businesses, the leaders are almost detached from the business, and portray semi personal or impersonal attributes. Family business leaders operate within the confines of an open and charismatic leadership style. Family leaders are compassionate about their roles, as compared to the non family business whereby the leaders need some form of motivation to perform their roles. In the family business, leaders have no option but to be open about their opinions regarding continuity of the business. An instance whereby the family business does not disclose the financial status of the business poses a great risk on the entire business. Ward (2004) indicates that secrecy is the number one enemy that has derailed most family businesses. In such businesses, the entire family needs to be aware of the progress of the business, a factor that minimizes the chances that, the bond between the family members is intact, and that they carry on with contributing to the success of the business. In non family businesses, most leaders tend to keep to themselves on many factors to the other members of the business. This can be accredited to the fact that, most leaders are alienated from the fact that, whether the business survives or not, it does not have adverse ramifications on them. In the family business, openness is vital to the success of the business, as all members are equally important and have contributed towards success of the business. The differences between the skill sets of leaders in family businesses and non-family businesses differ in that, in the family business communication must be strengthened among all members of the business. Ward (2004) argues that, the quality of communication in family businesses cannot be compromised. With the changing needs in the business world, the leaders must always take up the role of instilling positive communication among its employees so as to have future misunderstandings among the family members. On the part of the non family business, neglect has been a characteristic of the business, as most operate on the basis of rewards in order to perform in the business. Holding crucial positions in the family, family business leaders have no option but organize their scales of operation, if good governance has to be attained. 3.0. Conclusion Whilst non family business leaders are in dilemmas of what roles to perform and what not to perform, family business leaders, on the other hand, cannot afford to take chances to neglect any of their roles. In as much, it is possible that family business leaders are likely to face identity crisis; studies indicate that a majority of them are completely different from the ones of non family businesses. In response, family businesses have to a great extent been spared from the crisis in the business world, thanks to the efforts made by their leaders to devise long term strategies. In essence, it is justified to argue that, there is a great disparity between family business leaders and non family leaders (Aronoff, 2005).   4.0. References Aronoff, C, 2005, Effective Leadership in the Family Business, New York: Enterprise Publisher. Rouvinez, D, and Ward, J, 2005, Family business: key issues, Palgrave: Macmillan Publishers. Ward, J, 2004, Perpetuating the family business: 50 lessons learned from long-lasting, successful families in business, Palgrave: Macmillan Publishers. Read More