MGT 356

Strategic Issues in Family Business

Test 1List of Potential Question Content Areas

Note: You may be asked to apply the concepts using examples, so have a few family businesses (can be from text, videos, or your selections) that you can use.

Chapter 1

1. What is a good definition of Family Business (FB)?

2. What impact do FBs have?

3. What is the 3 generations rule?

4. What are the three patterns of ineffective succession?

5. What is the systems theory perspective?

6. How would a family member, CEO, with 100% ownership view the family business compared to a family member without ownership or involvement in the business?

7. How does the focus differ among the family-first, management-first, and ownership-first models?

8. Based on systems theory, FBs are comprised of different stakeholders with different views, interests, and needs. Select four types of stakeholders from Figure 1.1 and discuss how each views the FB differently (e.g. define issues, priorities, opportunities, and problems differently).

9. What is the agency theory perspective?

10. There are two ways to think about agency theory in the context of a family business; one is positive and the other negative. Pick one side, discuss, and make the case.

11. What is the resource based theory perspective?

12. What is the stewardship perspective?

13. Compare and contrast agency and stewardship theories.

14. Are FBs more profitable that non-FBs? Discuss.

15. Is it true that FBs are less ethical and socially responsible than non-FBs? Discuss.

Chapter 2

1. What led to the breakup of the Binghams FB?

2. Compare and contrast the Blethens and Binghams FBs.

3. What are zero-sum dynamics?

4. What is the family systems perspective?

5. What is triangulation?

6. What is a genogram? How can it be useful? Develop one for your family.

7. What is emotional intelligence (EQ or EI) and why is it important to FBs?

8. Identify and describe the various stakeholder roles within a FB.

9. List and describe the guidelines for policy making in FBs.

10. How did the Blethens family apply the guidelines for policy making?

11. What is emotional intelligence? Why is this important in a family business? Provide an example to illustrate.

Chapter 3

1. Contrast ownership vs. management priorities.

2. Describe the tension between the owners and managers. When/how are owners and managers interests aligned?

3. Identify and discuss three shareholder responsibilities.

4. Discuss the role and responsibility of the board in a FB.

5. Discuss the role and responsibility of management in a FB.

6. Define stock reclassification. When is it used and for what purpose(s)?

7. Define phantom stock. When is it used and for what purpose(s)?

8. Define shareholders redemption. When is it used and for what purpose(s)?

Chapter 4

1. Define family governance.

2. Distinguish between Family Council and Board of Directors

3. Of the 14 challenges to family governance listed in your chapter, select and prioritize the top 5. (Be sure to not only make a case for each one, but why you selected that particular order.)

4. What are the keys to optimizing both the family and the business? Discuss and provide example(s).

5. What is the professionalism challenge and why is it resisted by first and second generation family firms?

6. How can family-business CEOs keep top-flight non-family managers?

7. Identify and discuss the family governance best practices.

8. Of the family governance best practices, select and prioritize the top 5.

Chapter 6

1. Define primogeniture.

2. Define coparcenary.

3. Identify and discuss the rewards and challenges for the next generation.

4. Identify and discuss desirable attributes of the next generation. What does research tell us?

5. Identify and discuss the different types of commitment or reasons the next generation may be interested in working in the family business.

6. Which forms of commitment are likely to lead to the most positive outcomes? Why?

7. Is strategic marriage still a relevant strategy given todays societal norms?

8. What are the positives and negatives of sibling and cousin teams?

9. What are best practices of managing sibling and cousin teams?