Managing in a Family Business

Balancing Your Commitments

Managing in a Family Business - Balancing Your Commitments

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How can you manage effectively in a close-knit family business?

Family businesses dominate the U.S. corporate landscape, from vast conglomerates such as Wal-Mart® or News Corp® to small, local legal offices or accountancy firms.

There are around 28 million small businesses in the U.S., and 90 percent of these are family run, according to the U.S. Small Business Administration. The U.S. Family Business Alliance estimates that these companies employ around 62 percent of the workforce, and account for approximately 64 percent of GDP ($5 trillion).

In this article, we'll look at the challenges and opportunities that managing in a family business can present.


In this article we focus on being a non-family member in a family business. However, you can also apply the management strategies that we discuss if you are part of the family.

Benefits of Managing in a Family Business

The main advantage of managing in this type of business is the emotional and financial commitment of family members. The company was likely built from scratch, or passed down through the generations, so there is usually a strong sense of loyalty and dedication, from both family members and those they bring in to help them run the business.

A family business may also have a more "relaxed" feel, and is likely more flexible than a larger organization. So, it is often easier to gain approval or make decisions, without having to negotiate numerous layers of "red tape."

Management Challenges

Despite the benefits, managing in a family business can present a number of potential problems.

1. Building Effective Relationships

As you might expect, the key management challenge within this type of business is building effective relationships with family members. They could be shareholders, owners, senior leaders, or even entry-level team members, so it's important to know how to work productively with them, so that you avoid conflict, delegation issues, or nepotism....

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