A family business is a commercial organization in which decision-making is influenced by multiple generations who are closely related to the firm through leadership or ownership. Owner-manager entrepreneurial firms are not considered to be family businesses because they lack of the multigenerational dimension and family influence that create the unique dynamics and relationships of family businesses.
The economic prevalence and importance of this kind of business is often underestimated. Entrepreneurial and family firms, with their specific management models and complicated psychological processes, often fell short by comparison.
According to the research, 80.1% of Italian family businesses are headed by a family member and often obtain good economic results based on main factors such as quality, organization, brand personality self expressive personality and relationships between family members and customers creating a special affair.
According to the research, Italian family businesses grew more than non-family businesses in 2010, with an average growth rate of 7%. This means that there is a kind of good return of basic values that are timeless like FAMILY, italian trust.
However, in some cases underestimating these businesses is a good call. In fact, their main challenge concerns family, ownership and business roles with different and sometimes conflicting values, goals, and actions. For example, family members prioritize emotional capital, in other words, the success that will unite them through consecutive generations. Even if they represent the backbone of Italy’s economy, nowadays, governance seems to be their biggest challenge. According to a leading academic, many family firms are struggling to integrate non-family executives and expanding their business.
Therefore, as the company grows, problems increase and the ownership gets more dispersed -more than eight family members and non-family members join as managing directors or sit in the board- the outcomes start to fall.
Should we invest in luxury business family to create link between business and family, in order to create something unique?