CHALLENGES AND ISSUES IN MANAGING FAMILY FIRMS

A significant and clear majority of all private enterprises in the free world are controlled and usually owned by a single family or two families. In the United States, according to a 1971 survey of the approximately 1,000,000 registered corporations 980,000 were in the family owned/controlled category (Industry Week, 1971). About 150 of the Fortune 500 companies are similarly identified (Sheehan, 1967). In the developing countries, particularly in Latin America, the resolution of the issue of private or state controlled wealth production rests in no small way on the behavior of the families that now control wealth production. Failure to accept major social responsibility, errors in handling industry-government interfaces, inept industrial relations policies and practices-- all of these are time bombs for the wealth producers. Too little social science research has focused on either the unique or comparative characteristics of family vs. non-family enterprises. For example, are there differences in the reward and control systems of family versus non-family firms? Do training and career planning systems apply similarly to family and non-family firms; and how do the methods of selecting high potential candidates for general management positions differ in these firms? A review of available literature, in-depth interviews with members of family firms, plus almost twenty years of consulting with founders, chief executives, family owners and professional managers leads to th