MNGT 4400 Family Businesses
MNGT 4400 Family Businesses MNGT 4400
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This 1 page Class Notes was uploaded by Peyton Oglesby on Sunday April 17, 2016. The Class Notes belongs to MNGT 4400 at Auburn University taught by Lucian Bifano in Summer 2015. Since its upload, it has received 16 views. For similar materials see Organizational Change in Business, management at Auburn University.
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Date Created: 04/17/16
MNGT 4400 Family Businesses Family owned businesses play a key role in the global economy According to the Harvard Business Review (April 2015): They account for an estimated 80% of companies worldwide They are the largest source of long-term employment in most countries In the United States they employ 60% of workers and create 78% of new jobs They represent one-third of Standard & Poor's 500 companies They are 40% of the 250 largest firms in France and Germany They are more than 60% of large corporations in East Asia and Latin America The Issue: “Only 30% of family businesses last into the second generation; 12% are viable into the third” o Examples: Banco Espirito Santo (Portugal) CEO and great-grandson resigned for financial improprieties Portuguese government rescued the bank The Doosan Group (South Korea) Thrown into turmoil after replacing one brother with another as the CEO Fiat (Italy) 5 CEOs and 3 chairmen in 2 years before bringing in an outsider to lead the company run by the heirs of founder Gianni Agnelli Market Basket (United States) Lost $583 million in sales while two grandsons of the founder publicly vied for control of the company The Solution: According to The Harvard Business Review (April 2015) Top family-led businesses do 4 key things: 1. Establish good governance practices and insure good oversight from a professional board 2. Preserve what makes them special 3. Identify future leaders from within and outside the family 4. Bring discipline to CEO succession planning Louisville Case In-class Assignment
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