Entrepreneurship and small business management Essay

Entrepreneurship and small business management - Essay Example On the other hand, they also observe that such decision-making may just be beneficial to the business operations. One good thing about them is that they play a critical role in global economy. Even so, one should understand that family businesses are managed in different styles especially as pertains to leadership. Their characteristics are largely similar although small variations exist. Such differences are what sum up the total picture that of what constitutes their unique features. Unique Characteristics of Family Business As mentioned above, family business has unique characteristics. According to Bassanini, Breda, Caroli and Reberioux (2013, p. 433), family business are characterized by low job insecurity. Bassanini et al. observe that unlike nonfamily firms, family businesses are not in the habit of laying out workers. Rather than downsize by dismissals, many of them tend to rely on not hiring. They respond to their business operations through this unique way. This does not im ply that family businesses will never lay off workers. In the US, family businesses account for up to 28% in 2007 while Germany has the highest number at 56% (Boom, Van and Reenen 2007, in Bassanini et al. (2013, p. 433). Bassanini et al. observe that many family businesspeople see their firms as future assets for their descendants (p. 434). As a practice, any of them nurture their kids for eventual takeover and management. Some do not follow that path but entrench family members in critical decision-making organs. Probably this explains why many of them are reluctant to lay off their employees. Bassanini et al. also note that many family businesses pay comparatively low or average pay as compared to non-family firms. They offer that one may attribute such differences in wages to the fact that there are differences between family and nonfamily firms. Comparatively, the scholars point out that the wage gap between family and nonfamily gaps is approximately 2.4% (Bassanini et al., 201 3, p. 443). Even so, one should understand that this rate is not fixed as it fluctuates. One can also deduce that the differences between wages in family firms and nonfamily firms vary largely from firms to firm, making the percentage difference a dynamic range. Other scholars observe that family firms tend to follow certain values held dear to them. They note that family businesses thrive on strong commitment to stewardship of the family’s assets amongst others (p. 39). The scholars also observe that as the family shareholder decide on formation of Family Entrepreneur Teams. They also assess the shared vision to be in business together (Cruz, Howorth and Eleanor, 2012, p. 39). This is despite the fact that they are first brought together by shared family values. From this observation, one may deduce that another characteristic of family business is that the success of family business lies on the continued goodwill on the shared values down the lineage. It appears that as muc h as family businesses are characterized by shared values, down along the generation lines, there may be deviations from the shared values. Another characteristic of family teams is that the level of flexibility is usually high (Schjoedt, Monsen, Pearson, and Chrisman, 2012, p. 7). Schjoedt et al. highlight that such a characteristic usually comes from the fact that many team members in family businesses tend to be couples. Being couples, Schjoedt et al. point out that the shared goals and strong relationships usually allow some form of