FACTORS THAT NECESSITATE GOOD RELATIONSHIP BETWEEN FAMILY AND BUSINESS

 According to the entrepreneurial school, when 3rd world entrepreneurs enter into business, they regard it not as an impersonal activity of the ‘economic man’ but as a personal activity designed to enhance the status of the family and end up being reluctant to give up family control.

Several factors necessitate close ties between family and business. They include;

1. Joint family funding.

Some members of the family tend to pool their resources together to start a new enterprise. In this way, all those members do have a say on the business operations and influence decisions.

2. Inheritance

Some businesses are inherited and passed from one generation to another. In such ventures, the business entity is seen as a whole and this becomes a family business.

3. Fear of hired management

They tend to believe that business management by an outsider is affected by such malpractices like thefts, embezzlement. Therefore family management is seen as a way to decrease and protect family property from such incidences.

4. Source of employment to family members.

Family business is regarded as the main employer of the family labour due to internalized perception that they are more secure and materially more rewarding.

5. Managerial decision making

All the managerial tasks of planning, organizing, supervision, direction and controlling which are performed in big organizations need also to be performed in family businesses.

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