Winning the Family Company Game

Date of Submission

1976

Document Type

Thesis

Degree Name

Master of Business Administration (MBA)

Department

Management

Advisor

Wilfred Harricharan

LCSH

Family corporations

Call No. at the Univ. of New Haven Library

AS 36 .N29 Bus. Adm. 1976 no.2

Abstract

While it is too early to prove definitively, this paper proposes that family companies are not a remnant of the past, but rather an attractive alternative of the present. It is the purpose of this work to demonstrate how families can maintain a mutually beneficial relationship with their company in contrast to the more common assertion that a successful company is born, grows, and is either sold or goes public.

The discussion begins with an analysis of the historical context and common attributes of family companies. It also demonstrates their economic importance to the nation's economy by their prevalance today. One difficult question arises as to a definition of a family company since there is a vast disparity between a company like duPont and the "Ma and Pa" grocery store. To bring them closer an operational definition is presented.

To further simplify the analysis, a model has been created, not as a means of abstracting reality, but rather to enable the discussion to deal with the similarities of all family companies. The model begins v/ith the entrepreneur and investigates his experience, character, and decisions regarding the maintenance of the company in the family. Then it analyzes the alternatives that he and his successors have regarding the future of the company such as selling stock merging with another firm or maintaining current status. Following this, the work examines the problems which the founder's children must face in taking over the family company. From this, and from information derived from numerous family companies, several important suggestions are made regarding the survival of these companies.

Finally, bringing the evidence together. Chapter VII attacks the basic question: Can family companies survive and compete today with professionally managed companies?

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