When you undergo the management diagnosis, you are able to find out where your family business is in the management cycle. By understanding where your family enterprise stands, you cannot only identify the challenges of today and tomorrow, but also help the family chart its path to greater success.
You have successfully diagnosed your family business in the management cycle. Where are you in the management cycle?
Owner-Managed: When all of the family owners are involved in the management of the company., it is defined as an owner-managed company.
Family-Managed: When some family owners manage the firm and the other family owners are shareholders only.
Family-Monitored: When family owners act as non-executives supervising the management of the business, and involved in big-picture strategic decisions but not the day-to-day ones.
As the family business moves from the Owner-managed position to the Family-Monitored position, the attachment to the business is likely to decrease and there may be in increase in problems that arise from information asymmetries and different interests (otherwise known as the agency problem).
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