Setting up the entrepreneurial process in the family business Part 1
Abstract
The entrepreneurial process in the family business is typical not just how the family business successor inherit the business and then problem solving in a typical management position, but also need to focused on human capital process such as: education and working experience and most importantly the successor must have the soul to become an entrepreneur to lead the family business much more successfully than before.
Keyword: entrepreneurial process, family business and family business successor
1. Introduction
The paradigm for the business successors in the family business is in order to inherit or take over the family business. In this article, I will try to embed the entrepreneurial process, which involves more than just problem solving in a typical management position. The successors must find, evaluate, and develop an opportunity that given by their family by overcoming the forces that resists to making sure the family business that he/she rewarded to achieved firm performance and lead the family business to the sustainable competitive advantage.
Mathews (2008). Explained that entrepreneurial process theories and research itself deal with a variety of behavioral and non-behavioral processes and issues that explain the nature of entrepreneurship in different ways. And when we talking about who should be appointed as the family business successors, Walsh (2011) stated that family business succession is the process of transitioning the management and the ownership of the business to the next generation of family members. The transition may also include family assets as part of the process. Family members typically play a controlling role in both the management succession as well as the ownership succession. As such, the effective integration and management of the family component will have a determining effect on the success of the succession process.
Apparently, Shepherd & Haynie (2009) explained that the family business is a business governed and/or managed with the intention to shape and pursue the vision of the business held by a dominant coalition controlled by members of the same family or a small number of families in a manner that is potentially sustainable across generations of the family or families.
However, Drake (2009) argued that there is no legal definition of a family business and commentators tend to define family businesses in a variety of different ways. For some, the definition is as broad as “any business that regards itself as a family business”, even if family members are no longer involved in management and/or ownership. In other words a family business ethos is enough for the business to qualify as a family business.
2. Literature Review
2.1. Theory of entrepreneurial process
Before synthesizing literature suggestion about the theory of entrepreneurial process among different models for collaborating, a brief description of entrepreneurial process is necessary to be describing, as Hisrich, et. Al (2005) describe that the entrepreneurial process has four distinct phases: (1) identification and evaluation of the opportunity, (2) development of the business plan, (3) determination of the required resources, and (4) management of the resulting enterprise.
2.2. Theory of the family business successors
According to Wang (2010) family business Succession is arguably the most important hurdle to intergenerational longevity for family businesses. It involves the passing of business ownership and management from a ‘‘senior’’ to a ‘‘junior’’ generation so that control of the enterprise continues, and is ultimately perpetuated, in the family. Critical to the success of this process is successor selection the search for which typically begins first among the founder’s or incumbent leader’s children and then expands to include members from the extended family.
To be continued..
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