A Literature Review on SME Family Businesses: Frameworks, Recent Situation and Future

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Table of Contents

CHAPTER 2: LITERATURE REVIEW1

Introduction1

Importance of Family Business1

Frameworks and Models in SME's Family Businesses3

Beyond Profitability, Social Perspective4

Strategic Management Process of Family Business5

Changing Trends in SMEs Family Businesses6

Cultural Aspects of Family Businesses7

Cultural Traits of the Family Business7

Value Factors for Family Business8

Value Creator in the Family Business9

Growth Rate / Percentage of Family Businesses in Different Regions9

Family Business and its Characteristics11

CHAPTER 2: LITERATURE REVIEW

Introduction

The involvement of the family in SME's business tends to formulate the objectives and goals of the family business in an entire different situation as compare to the SME's business without involvement of family. The concept of SME's family business is quite divergent from the view of organizations value maximization goals that are taken as publicly held and are professionally managed by non family firms. It is a business where the members of a given family are joined together to work, make decisions, accomplish certain tasks and distribute the benefits fairly. It is good for the family unit, as long as one of its members does not hinder the work that falls within the company. It is estimated that over 30% of family businesses survive to the second generation, and about 13% goes to the third generation (Young & James, 1999, pp. 1-11). The SME's family business, by its nature, presents certain challenges that are unique, and companies that do not have otherwise. Among them: 1) How to Separate the Family Relationship of the Business, 2) How to Maintain Healthy Relationships in the Second and Subsequent Generations 3) How Succession Planning and The Distribution Of Shares (Abdulrahman, 2011, pp. 2-14). This chapter however will be focusing on the different aspects of the SME family business and on the current position and future forecast of the same perspective.

Importance of Family Business

The importance of family businesses cannot be overlooked. For some ordering of concepts that can be used to form meaningful, according to which a family business can be such an operator, in which the rights of property (in whole or in crucial parts) and management (to exert a decisive influence on the direction) remain in the hands of one family. Typically, studies devoted to family businesses are given a series of numerical data and survey results. These materials have brought some quantum of knowledge; it mostly boils down to the description of the role of family businesses in the form of macroeconomic ignoring the social nature of family, which is the original and superior value (Andersson, Carlsen & Getz, 2002, Pp.89-106).

Therefore, the focus is more on the remainder of this modest development with a focus on the importance of family businesses and place in the social order. Thus, for example, family businesses, it is relatively easy to understand the true role of labor as a crucial element builds capital, the wealth of nations and desirable social attitudes. They show the real nature of the right of private property, and more precisely speaking - individual ...