This essay has sought to understand how long-term planning in family business can be a successful means of enhancing their success and surivival in the future. Less than one third of family-owned businesses survive into the second generation, with between 10-15% actually being continued into the third generation, it is essential to understand which factors may increase the longevity of modern family businesses and enhance their success in the future. Family members oversee, look after and maintain the business so that it is in a strong position when it is passed down to the next generation of family members. This focus ensures that those managing the family business have their eye on the long-term success of the company, and are less interested in shortterm profits.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Defining Family Business
- Longevity in Family Business
- Benefits of Long-Term Planning
- Agency Costs
- Stewardship Theory
- Transaction Cost Theory
- Maslow's Hierarchy of Needs
- Life Cycle Theory
- Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This essay examines the role of long-term planning in modern family businesses and explores its benefits in enhancing success and survival rates. It investigates the issue of longevity within family businesses and discusses the benefits of long-term planning within the context of agency and stewardship theories, transaction cost theory, Maslow's Hierarchy of Needs, and life cycle theory.
- The significance of long-term planning in family business success
- The role of agency theory and stewardship theory in understanding family business dynamics
- The application of transaction cost theory to long-term planning in family businesses
- The relationship between long-term planning, Maslow's Hierarchy of Needs, and the business life cycle
- The potential for long-term planning to enhance family business longevity
Zusammenfassung der Kapitel (Chapter Summaries)
The introduction establishes the context of family businesses and their challenges, highlighting the importance of understanding factors that contribute to their longevity and success. It introduces the focus of the essay, which is to critically discuss the role and benefits of long-term planning for modern family businesses.
The chapter on defining family business addresses the complexities and various definitions that exist in the literature. It proposes a definition that encompasses family ownership, management, and succession, as well as the significance of family business culture.
The chapter on longevity in family business explores the potential for family businesses to achieve long-term success through generational succession. It highlights the importance of long-term planning as a key factor in achieving this longevity, as evidenced by the Coutts Family Business Ranking Survey.
The chapter on benefits of long-term planning explores how long-term planning can benefit family businesses by addressing short-term pressures faced by nonfamily firms. It discusses the application of agency and stewardship theory, transaction cost theory, Maslow's Hierarchy of Needs, and life cycle theory to the topic of long-term planning in family businesses.
The agency cost section explores how agency theory can be applied to family businesses, highlighting the potential for conflicts of interest between managers and shareholders. It argues that family businesses may face lower agency costs than nonfamily firms, potentially due to the alignment of ownership and management within the family.
The stewardship theory section examines the role of stewardship in family businesses, focusing on the commitment and dedication of family members to the success of the venture. It explores how stewardship can promote long-term planning and enhance the longevity of family businesses.
The transaction cost theory section analyzes how transaction cost theory can be applied to long-term planning in family businesses. It considers how long-term planning can reduce transaction costs by minimizing the need for external oversight and monitoring.
The Maslow's Hierarchy of Needs section explores the role of Maslow's Hierarchy of Needs in understanding the motivations of family business owners. It suggests that long-term planning can be beneficial for family businesses as it allows them to address the higher-order needs of their employees, such as self-actualization and growth.
The life cycle theory section discusses the importance of long-term planning in relation to the different stages of the family business life cycle. It suggests that long-term planning can help family businesses navigate the challenges and opportunities associated with each stage of their development.
Schlüsselwörter (Keywords)
This essay explores the role of long-term planning in modern family businesses. It analyzes the benefits of long-term planning using agency theory, stewardship theory, transaction cost theory, Maslow's Hierarchy of Needs, and life cycle theory. Keywords include family business, long-term planning, agency theory, stewardship theory, transaction cost theory, Maslow's Hierarchy of Needs, life cycle theory, longevity, success, survival, and generational succession.
- Quote paper
- Alexander Schmithausen (Author), 2012, Critically Discuss the Role and Benefits of Long-Term Planning for Modern Family Businesses, Munich, GRIN Verlag, https://www.grin.com/document/199980
