Your parents started a small business whilst you were still at school. During the start-up years, you and your siblings worked over weekends and holidays in the business. During these times, your parents taught you valuable business skills that would eventually see you finishing a Bachelor of Commerce degree before returning to the business. You are the last of the three siblings to return to the business and thus have the most junior role within the business. The small business that your parents established is called Family DIY. Family DIY is a hardware store that is 17 years old and has a good reputation within the local community with the supply of building materials for major construction projects as well as supporting the local handyman with equipment and services to attempt small DIY projects at home. As the last member of the family to join Family DIY and the only one with a Bachelor of Commerce degree, you are thrown into the deep-end at the annual strategic meeting. The strategic committee decides that the business must establish itself as a franchise and open more stores across the province with a focus on developing and increasing small family-owned business. a business report to table at the Strategic Evaluation Committee meeting in three weeks. You must provide feedback on how the following aspects would apply to the business franchise model.

b) Family DIY wants to promote and expand the concept of family business through its franchises. It is important that the report focuses on two important aspects of a family business in the Family DIY franchise context namely: I. Explanation on the concepts of a family business. II. Discuss the forces that would drive the family business.

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5-1 What Is a Family Business? LO What exactly is a family? This may seem like a foolish question, but definitions of fam- ily vary in different parts of the world. Definitions include the classic 'nuclear' family, 5-1 restricted to parents and children, and an 'extended' family, comprising an entire com- munity of other relatives. Many versions of families can be seen on broadcasts and pos- Define the terms family sibly in your own life. Given the significance that family members have in each other's and family business. lives, it is not surprising that they have opinions about a business owned by one or more family members, whether they are officially linked to the business or not. In this chapter, the word family refers to a group of people bound by a shared history and a commitment to share a future together, while supporting the development and well-being of individual members.? This definition acknowledges the considerable vari- voted comon evsize ations in the compositions of families. They can vary according to blood relationships, generational representation, legal status, and more. A family business can be defined as memogonam an organisation 'in which either the individuals who established or acquired the firm or their descendants significantly influence the strategic decisions and life course of the firm. Family influence might be exerted through management and/or ownership of the firm.3 Experts on family businesses try to sort through family relationships and apply labels to businesses as they evolve from one generation to another. An owner-managed business is a venture that is operated by a founding entrepreneur. If the children of the founder become the owners and managers of the business, the second-generation ownership is referred to as a sibling partnership. A cousin consortium describes a business in the third and subse- quent generations when children of the siblings take ownership and management posi- family tions. Whichever generation is leading a business, the influence of other generations is felt. A group of people bound by a shared history and 5-1A FAMILY AND BUSINESS OVERLAP a commitment to share a Families and businesses exist for fundamentally different reasons. The family's primary future together, while sup- function is the protection and development of family members, while the business is porting the development and well-being of individual concerned with the production and distribution of goods and/or services. While the members family's focus is on creating value for family members and emphasising cooperation, unity and stability, the business's goal is to create value for customers and emphasise family business competition, diversity and flexibility. An organisation in which either the individuals who Individuals involved in a family business have interests and perspectives that dif- established or acquired fer according to their particular situations. The model in Exhibit 5.1 (a Venn diagram) the business or their shows the ways in which individuals may be involved-as owners, members of the family, descendants significantly employees of the business, and various combinations of these. In addition, the configu- influence the strategic ration of roles can affect the way these individuals think about the business. For exam- decisions and life course ple, whereas a family member who works in the business and has an ownership interest of the business. (segment 7) might favour reinvesting in order to grow the business, a family member owner-managed with an ownership share but who works elsewhere (segment 5) might want dividend pay- business outs, and an employee with neither family nor ownership interest (segment 2) might seek A venture operated by a founding entrepreneur. higher remuneration. Competing interests can complicate the management process, create tension and, sibling partnership sometimes, lead to conflict. Relationships among family members in a business are A business in which children of the founder more sensitive than relationships among unrelated employees. For example, disci- become owners and plining an employee who consistently arrives late is more problematic if he or she is managers. also a family member. Or, consider a performance review session between a parent- cousin consortium boss and a child-subordinate; or, the spouse who wonders when the family will A business in third and take priority over the business. In 2013, Meg Cadoux Hirshberg concluded a series subsequent generations, of columns that she had written about her own relationship with her husband, Greg, when children of the sib- founder of Stonyfield Farm, a producer of organic yoghurt. Meg had labelled her col- lings take ownership and umns 'Balancing Act' and provided numerous examples of the stresses that the business management positions. placed on the family. In her final column, she described the reactions that many others. A family business is an organisation in which either the individuals who established or acquired the business or their descendants significantly influence the strategic decisions and life course of the business. . A family business can be described as an owner-managed business, a sibling partnership, or a cousin consortium. 5-2 Explain the forces that can keep a family business moving forwards. . The organisational culture of a family business is com- posed of the patterns of behaviours and beliefs that characterise a particular business. Odd . The founder often leaves a deep imprint on the culture of a family business. mostis sonotizedot to enonesno . The long-term survival of the business is dependent on the commitment of family members. They may be com- mitted to the family business for different reasons, and these reasons will determine the nature and strength of that commitment. lovin ad 5-3 Describe the complex roles and relationships involved in a family business. anovel of bast bus . Couples known as co-preneurs join in owning and man- aging a business together, which can strengthen or weaken their relationship.econom no ataella sclovis