Entrepreneurship

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Entrepreneurship

• Class 8 Family Entrepreneurship

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Agenda

• Definition of family enterprise
• Advantage Disadvantage of Family Enterprises
• Life Cycle of Family Enterprises
• Governance of Family Enterprise
• Succession of Family Enterprise

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Definition of Family Enterprise

• being owned and controlled by one or more members
  of an immediate family
• business that is governed and/or managed with the
  intention to shape and pursue the vision of the
  business held by a dominant coalition that is
  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

Chua, J.H., etal 1999 Defining the family
business by behavior, Entrepreneurship Theory
and Practice, Vol. 23 No. 4, pp. 19-39.
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Thai Family Business Group

• Of 220 significant groups in modern business in
  Thailand, 212 are family based groups with some
  Chinese origin.
• In terms of diversification, 87 of the 212 family
  groups are in 1 core business, 106 are semi
  conglomerates with 1 core and 1 or 2 non core
  (property finance), 24 are full blown
  conglomerates in 4 or more business segments.
• In terms of succession, 15 had made the difficult
  transition to the third generation, 102 are in
  the second generation, 89 in the first generation
  

Suehiro A. 2003 Big Business Groups, Family
Business, and Multinational Cooperations in
Thailand19979, 1997 and 2000 Surveys
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Forbes Top 5 in Thailand 2008
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Family Business Listed Company

• Form 1 or more unlisted investment firms wholly
  owned by the members of the kongsi
• Investment firms have a controlling stake in 1 or
  more listed holding companies
• Holding companies had stake in listed or non
  listed affiliates

2006 data from SET
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Kongsi

• Kongsi (Chinese ?? pinyin gongsi) or "clan
  halls", are benevolent organizations of popular
  origin found among overseas Chinese communities
  for individuals with the same surname

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Family Control of Listed Companies
single individual/family investment company gt20
several individuals/family investment companies
gt20
no individuals/family investment companies gt20
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(No Transcript)
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Family-Business Conflict
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Case of Boon Rawd Brewery
Discuss the advantage and challenge of family
business relating to the case of Boon Rawd
Brewery
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Life Cycle of Family Enterprise
what is the stage of life cycle of Boon Rawd
Brewery?
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Pressure on Family Business
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Entrepreneurship Process Governance
family
board of directors
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Governance with Outside Board
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Cases of Thai Family Business
read the 4 cases of Thai Family Business and
reflect on the issues about advantage and
challenge, life cycle, and governance of family
business
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Checklist for Succession
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Checklist for Identifying a Successor
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Case 19.2

• Identify and briefly describe four
  characteristics you would expect to find in a
  successful manager of this type of venture.
• What steps does jack need to follow to
  successfully identify and groom a successor? Be
  complete in your answer.
• If you were going to advise jack, what would you
  recommend he do first? How should he get started
  with his succession plan? What should he do next?
  Offer him some general guidance on how to handle
  this problem.

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Recomendations

• Jack should look toward the most competent
  individual to run his company. If his sons and
  nephew are all equally qualified and interested
  in his business, he should also consider dividing
  it among the three. But if the three do not get
  along, he should consider an alternative division
  of the company.
• Jack should definitely figure out who he wants to
  head his company before any other plans are made.
  Jacks decision should be based on a persons
  motivation, knowledge of the business,
  qualifications, honesty, and if he has good
  social skills.
• After being chosen for that position, a person
  must be trained. Jack must delegate his authority
  and decentralize his operations to his heirs. By
  doing this, it will give his heirs the experience
  they need.
• When Jack feels his heir or heirs are competent
  to take over the business, the only thing left to
  do is to step aside.