Swire Group Company - Coursework Example

Entrepreneurship Table of Contents Introduction 3 About the company- Swire Group 3 Household relations and entrepreneurship 4 Discussion 6 Conclusion6 Recommendations 6 Reference List 8 Introduction Family business is probably the oldest form of business in the world. In family run organisations, major shareholders of the company are family members and business decisions are greatly influenced by organisational members who are either related by blood or by marriage. Another important aspect of a family-run business is that the firm is managed by multiple generations of the owning family (Zahra and Sharma, 2004). Family business generally starts with an entrepreneurial individual who conceive an idea, gather necessary resources and fund to develop the idea into a profitable business. However, business operations in later phases are not managed by the entrepreneur alone, but also by his/her family members who participate in various management activities at different levels of the organisational structure. In this context, Ram (2001) asserted that contribution of the family relations in the business operations is of paramount importance and its role is more important than that of the entrepreneur alone. Despite the obvious involvement and contribution of family in success of entrepreneurial business, management scholars showed little interest in this regard. Until recently, when researchers found that the role of family in entrepreneurial ventures is quite imperative in terms of fund and emotional support. According to certain authors, the firm-level strategic decisions are greatly influenced and empowered by owning families. In family businesses, trust and cultural similarity is maintained as a majority of the workforce comprises family members (Brannon, Wiklund and Haynie, 2013). In the following sections of this report, the assertion of Monder Ram has been examined in context of Swire Group, one of the well-known family businesses operating in the United Kingdom. About the company- Swire Group The organisation was established in 1816 by John Swire as a trading organisation, which gradually shifted towards export and import business. So far, it is considered that success of the family business is not only based on the entrepreneurial instincts of John Swire, but also contribution by his family members. Over 200 years, the company has grown from a small business to a global conglomerate. Presently, the organisation has a number of subsidiaries and is diversified in various business sectors (product as well as services) ranging from retail to hospitality. The company has entered in strategic partnership with various companies, along with acquisition and merger in a number of countries in order to expand its business. Presently, the organisation has around 121,600 employees who are considered as part of the organisation’s professional family, while the organisational culture continues to be influenced by that of the family. The efficiency involved in the family-run business of Swire Group can be understood by employing the SWOT (Strength, Weakness, Opportunity and Threat) analysis tool. The company’s strengths as recognised are low labour cost, accumulated knowledge sharing, little scope for trust and loyalty issue in family-run business, strong distribution and supply chain management, strong goodwill and reputation, while its opportunities are cost advantage due to diversified nature of business, globalised market, increasing demand for product and services as well as acquisition and opening of new markets. The scope of persisting weaknesses is very less as the company continues to evolve with time. However, the possible threats can be increasing competition and cost of various resources (Swire Properties Limited, 2014). In the following sections, the role of family relations in entrepreneurial ventures will be elucidated based on academic discussion. Following the literature review, analysis will be done so as to establish relationship between the management of Swire Group and the research subject based on arguments presented in the literature. Household relations and entrepreneurship In the most entrepreneurship based literatures, the main focus is on the individual who possess entrepreneurial capabilities and the firm or business established by the same, but the role of family and household relations in success of the entrepreneur is rarely considered. Every individual is a social creature who requires support and motivational sources and according to certain authors, immediate family relations especially blood relations and spouses have positive impact on individuals’ perception (Handler, 1990). Family relations play a central role in business decisions, even though family is rarely considered as a success factor from literary perspective. Family businesses are regarded as the key driver of socioeconomic development and creation of wealth. The entrepreneur conceives and converts an idea to a product, but to continue and foster the entrepreneurial mindset across multiple generations is the main responsibility of family relations. The family is also responsible for continuity and longevity of the business (Wheelock and Mariussen, 1997). Various authors have underlined that it is the family that often acts as incubator of a new venture. The reasons can be numerous, ranging from growing unemployment, changing needs of the household, new opportunities recognised by family members to entry of new members in the family (Mulholland, 1997; Handler, 1990). Overall, authors such as, Alsos, Carter and Ljunggren (2013), explained that the interconnection between household relations and business is strengthened by two factors, namely resources available to the family and relational dynamics. To continue business over a long period of time, trans-generational entrepreneurship must be promoted. Trans-generational entrepreneurship is also known as family entrepreneurship, which is to foster entrepreneurial mindset across the generations so as to arouse curiosity and interest in the future generation to utilise their capabilities for pursuing incremental innovation in favour of the organisation. In this context, the relational dynamics can be birth of a new family member, marriage of older children, legal separations of couples and death of older generations. With changing time, constant developments have been observed in size and composition of families, which have consequently affected resource requirements of the organisation (Mulholland, 1997). According to Stewart (2003), the primary family dynamics that affect family businesses are kinship and marriage. Then again, relational dynamics in form of entry and permanent separation of a family member often pose challenges to economic and social structure of the family as well as business. Discua Cruz, Howorth and Hamilton (2012) identified that in certain family businesses, identification of innovative opportunities was a collective effort made by senior as well as junior generations. In such an effort, management-oriented functions were overseen by the senior generation; whereas the young generation looked after capitalising on the existing opportunities. Discussion The fact sheet of Swire group provides information, mentioning that composition of the board of Swire group is not family concentrated and has independent members as well. The inference that can be drawn from this statement is that the organisation considers every employee as its family and no discrimination occurs in terms of superiority and power distribution. It was further observed that the business was launched by John Swire and his sons, prior to World War II, which was later continued by the family’s third generation. In Swire group, trans-generational entrepreneurship can be noticed as multiple generation of the Swire family participated in the business. Generally, in a family, every member participates in decision making. The same tradition has been maintained in the organisation as well. The company has a participative management, where board members and other senior employees are selected by the employees based on merits and other factors (Swire Properties Limited, 2014). Conclusion Swire group is one of the well-known family businesses in the United Kingdom and has diversified business across the world. From the limited information available, it was observed that the company practices trans-generational entrepreneurial approach as well as people management, which is similar to culture prevailing in the family. Presence of various relational dynamics were observed in the organisation as the business operations continued even after John Swire’s death and the next generation conducted the necessary operations very successfully. Recommendations The paper mainly focuses on the role of family in an entrepreneurial family business, which has been discussed with respect to Swire group. The data were collected online from the organisation website. Then again, due to absence of sufficient data, further analysis could not be done. Moreover, in this respect, very limited research has been done so far. The subject has a wide scope for research as family owned businesses are presently growing at a rapid rate. In this research, limited supportive data has been provided as only one company is considered. Even so, if the research is conducted on more companies, then better perspective can be developed. For greater obtaining knowledge about the subject, the researcher must incorporate primary research. Through primary research, the researcher will be able to gain better insight of the role of family in entrepreneurial family businesses. Keeping in view the limitations of this project, future research in this context is highly recommended. Reference List Alsos, G. A., Carter, S. and Ljunggren, E., 2013. Entrepreneurial families and households. [pdf] Strath prints Institutional Repository. Available at: [Accessed on 14 July 2014]. Brannon, D. L., Wiklund, J. and Haynie, J.M., 2013. The varying effects of family relationships in entrepreneurial teams. Entrepreneurship Theory and Practice, 37(1), pp. 132-250. Discua Cruz, A., Hamilton, E. and Jack, S., 2012. Understanding entrepreneurial cultures in family businesses. Journal of Family Business Strategy, 3(3), pp. 147–161. Handler W.C., 1990. Succession in family firms: A mutual role adjustment between entrepreneur and next-generation family members. Entrepreneurship Theory and Practice, 15, pp. 37-51. Mulholland, K., 1997. The Family Enterprise and Business Strategies. Work, Employment and Society, 11, pp. 685-711. Ram, M., 2001. Family dynamics in a small consultancy firm: a case study. Human Relations, 54(4), pp. 395-418. Stewart, A., 2003. Help one another, use one another: toward an anthropology of family business. Entrepreneurship Theory and Practice, 27(4), pp. 383-396. Swire Properties Limited, 2014. About us. [online] Available at: [Accessed on 14 July 2014]. Wheelock, J. and Mariussen, A., 1997. Household, Work and Economic Change: A comparative Perspective. London: Kluwer Academic Publishers. Zahra, S. A. and Sharma, P., 2004. Family business research: A strategic reflection. Family Business Review, 17(4), pp. 331-346. Read More