How should be the Relashion between each governing body to the other in a family business?

Answer 1

Business and family often do not go together well. This is mainly because business usually requires that decisions be made without regard to personal feelings in order to be successful, and having family involved in the business makes that level of disconnection impossible. Still there are many successful family businesses that can work through this dilema. Those are usually the ones where each family member is held in the same regard throughout with none claiming superiority over the others. Another sucessful scenario in where there is a well known and respected heirarchy, such as with businesses being taught to children by their older relatives(usually a parent).

If there is a clear ownership of the business, such as in the last example, then a workable chain of command can exist that will not unduly cause friction among family members involved in the business. If the ownership is shared, then this approach will not work because the personal relationships will be damaged and inhibit success.

The mental maturity of the family members involved will dictate the best approach. All must fully understand that business has no connection to family relationships or affections, and that business decisions must be made solely on the basis of what is best for business. An underperforming family member may be performing to the best of their ability, but that level of ability may not be what the business needs in that position. It can easily sour a family relationship when business dictates that the underperforming person be fired or relegated to a lesser job status when allowing them to keep their position would imperil the business. Alternately, it may be acceptable to allow that person to continue in their position so long as they are not appreciably affecting the business adversely.

In my own experience of working for businesses that had a high number of family members running them, the companies performance when compared to similar non-family run businesses was not good, and there was a high level of resentment of non-family employees toward most or all the family members because of the underperformance of one or more family members being ignored.

More often than not, family has no good place in one's business and business has no good place in one's family affairs. The best rule is to keep the two separated, or to make it clear to family members who become involved with one's business that they will be expected to perform to a higher level than non-family members or leave by their own volition. Those family businesses that follow this rule are the exceptional ones which perform well and succeed beyond similar non-family owned businesses. If you can achieve this you will all have the best of both worlds; a successful business and a happy family at the same time. If you already have family in the business you may find this perfect balance unachievable. In that case you are going to have to willingly sacrifice in one area or another, or excersize your own option of leaving the family business to pursue your career elsewhere to maintain balance in your own life.