Professionalism in Family Business

Professionalism in Family Business

Introduction

While there is considerable debate regarding what constitutes the role of the professional manager, it is generally agreed that professional managers typically have received formal training in a business school setting in areas such as finance, production, accounting, and human resources/personnel.

Moreover, those trained in management generally fit the criteria for professionalism inasmuch their actions are driven by a set of general principles or propositions independent of a particular case under consideration; they are deemed to be “experts” in the field of management and to know what is “good” for the client; their relationships with clients are considered helpful and objective; they gain status by accomplishment as opposed to status based on ties to the family; and, they belong to voluntary associations of fellow professionals.

Hiring professional managers is one way to gain the skills of professional management. Another is to professionalize by training family members of non-family employees currently working in the business.

The research in many countries showed that the family business has a significant role in economic development of a nation. In Indonesia, family business contributes 82% of Gross Domestic Product (GDP). Similarly, family business in developed countries such as United States of America and Australia contribute GDP in amount of 60% (Susanto, 2000). The research gives us the understanding and description about the importance of family business so if we could manage family business in professional way; it will grow up continuously in the future. It also will open many opportunities to the economic development like providing job opportunities to the society; increasing government's tax revenue and multiple effects to the country's economic as a whole.

But we have to realize, that family business will continuously grow up if it has competent human resources who has an entrepreneurial spirit then can create some innovative and creative business ideas. A person who has an innovative and creative business idea can start to apply his/her ideas independently or in a team with friends or member of family. Sometimes it is easier to starting up business with a family member (sisters or brothers; wife and husband; or parents with children) because they have similar background, more time to meet and more trusting each other. When the family business grows bigger, it will face more opportunity and also more threat, and as a consequence, the family business needs more resources include human resources. The limited number and limited competencies of family member drive family business to hire non family member to be employee or professional in the company. Consequently, the company must be managed professionally in terms of giving security to the employee who decided to join the family company. However, if they feel that the company manages professionally, they will perform in their best and they will not feel as an outsider in the company. The need to manage family business professionally also drives from realizing that the competent human resources will see the image of the company before they decide to ...