Opinion


Eight books on family business




Framework
Elfren Sicangco Cruz


Posted on December 11, 2012


OVER 80% of all businesses worldwide are family firms but it was only during the past two decades or so that the number of published books on family business have become substantial. Unfortunately, because family business management has gained the status of a management fad, it has become difficult to determine which ones are worth reading. Here are some I would personally recommend:

Generation to Generation: Life Cycles of the Family Business by Gersick, Davis, Hampton and Lansberg. Harvard Business School Press. USA.

This has become the landmark book on family business. Two of its authors, Jim Davis and Ivan Lansberg, have become the accepted gurus in the area of family business management. In the book, the authors present an original developmental model for understanding and managing patterns of change in family business. They show how issues of organizational structure, leadership, strategy, financial management, and organizational behavior in these enterprises differ from those in public companies.

More importantly, it shows how families moving through generational changes in leadership anticipate the transition, accomplish it and move ahead. Its model, the Three Circle Model of Family Business, has become the most widely accepted framework in family business management.

Succeeding Generations: Realizing the dream of families in business by Ivan Lansberg, Harvard Business School Press. USA.

Finding the right successor is the most difficult task any organization faces and the challenge is greater for family-run businesses. Very few are successfully passed down from one generation to another and fewer still reach the third generation intact. The book explores the reasons behind this high failure rate and reveals the conditions that allow family businesses to endure through the generations. Lansberg stresses the need for families to share a common "dream" for their company, much like a business has a unified vision.

Family Business by Ernesto Poza. Thomas Learning. USA.

The book provides the next generation of family business owners with the knowledge and skills needed for the successful management and leadership of the family enterprise. Although it does not present any original framework, it does present some "best practices" for leading and managing the family business. There is also an important chapter on the "Critical Role of Nonfamily Managers."

Wealth Doesn’t Last 3 Generations: How Family Businesses can Maintain Prosperity by Jean Lee and Hong Li. World Scientific. Singapore.

The two authors are affiliated with the Chinese Europe International Business School and the Chinese Academy of Social Science, both located in China.

The book supposedly introduces family business from a Chinese perspective. In fact it claims to introduce the development and history of family business in China. In the book there are three case studies of modern Chinese family businesses, including the food and beverage company Yeo Hiap Seng. The book also discusses the "changing characteristics" of Chinese family business.

However, in analyzing the family enterprises in modern China, the authors use the Three Cycle Model developed in the book Generation to Generation.

FAMILY BUSINESS: The Essentials
by Peter Leach. BDO Stoy Howard. Great Britain.

In the United Kingdom, some of the most successful and professional companies are family-run and have remained in family ownership for generations. Their inherent strengths are "commitment, culture and pride in the business." However, like family businesses worldwide, they also face major challenges in reconciling both the short and long-term needs of the business with those of the family.

The book shows the "pitfalls and particularly the tensions and competing demands that destroy too many family businesses." The author has several decades of experience as a consultant to some of the largest UK and international family businesses. In this book, he writes about the techniques and strategies needed for running a successful family business.

Family Business Answer Book by Bucholz, Crane and Nager. Prentice Hall Press. USA.

The book presents 101 of the most commonly asked questions about family business and "answers them clearly and concisely, incorporating a variety of real life case studies." The answers are based on interviews with leading consultants from the Arthur Andersen Center for Family Business.

Some of the topics covered are "Critical Issues Facing Families in Business Today; Bringing Your Successor on Board; Daughters and Sons in a Family Business; Transition Challenges Facing the Family Business Leader; Benefits of an Independent Board and Family Council; Planning for Your Estate; Signs of a Healthy Firm; Heading off Trouble in Your Family Business; and, The Family Business in the Next Millennium."

DYNASTIES: FORTUNES and MISFORTUNES of the WORLD’s GREAT FAMILY BUSINESSES by David Landes. Penguin Group. USA.

Landes is the author of the New York Times best seller The Wealth and Poverty of Nations. In this book he investigates one of the key factors "lurking behind the world’s most successful enterprises and the power of the family."

He studies the powerful families that have ruled both the financial and industrial sectors across Europe, Japan and America to determine what factors can cause a dynasty to either flourish or fail. He focuses on three industries namely financial services, automotive and mining. Among the families he studies are the Barings, Rothschilds, Morgans, Fords, Toyodas, Peugeots, Guggenheims, and Rockefellers.

The book also answers the following questions: Why do some family businesses endure for several generations while others do not last beyond one or two generations? What are some of the common characteristics of success and failure in a family business?

Setting Frameworks: Family Business and Strategic Management by Elfren Sicangco Cruz. Anvil Publishing. Philippines.

This book originated from columns I wrote about family business and strategic management in the BusinessWorld newspaper. The book has two basic premises. First, the family business will continue to be the dominant form of business organization in Asia. The second is that an economy cannot take off unless these firms become globally competitive.

The many frameworks and best practices discussed in the book are actually a syntheses based on my personal experiences as a management practitioner and consultant, and from readings and case studies that I have done over two decades of teaching and lecturing.


Dr. Elfren S. Cruz is a professor of Strategic Management at the MBA Program, Ramon V. Del Rosario College of Business, De La Salle University. Please send comments or questions to elfrencruz@gmail.com