Family Business Disadvantages

1055 Words5 Pages
A family business is one in which most of the shares are owned by the same family, or the business has been passed down for generations in the same family. This essay proves the benefits of running a family business far outweigh the disadvantages. This report listed 3 advantages and 3 advantages in terms of running a family business. The first advantage is family business centralization of decision-making is fast and powerful, which is good for fast-changing markets. The second point is simple management can effectively control the operation of the company. Third point is relatively low start-up costs but development so fast. The first disadvantage is dealing with relationships is a big challenge. The second disadvantage is difficult to get…show more content…
First of all, employing low cost enterprise member’s unique kinship, marriage, relationship and relationships, gives family businesses rapidly at a lower cost to the quest for talent. Secondly, low financing costs, private sector businesses, it is difficult to obtain bank loans, family and friends tend to be the main financing channels. According to the survey, our start-up funding mainly comes from my accumulation of private enterprises accounted for 56. 3%. Finally, low management cost, family business operation occurs during a conflict or dispute, through internal consultations and does not require the introduction of third party oversight body, which reduces the cost (7 Advantages of a Family Business 2010) Dealing with relationships is a big challenge. Family business formed in a variety of interest groups, due to the inclusion of complex relationships, making leaders in dealing with the relations of interests in a more complex, even delicate position. Family members may be private emotions to make unreasonable demands, in order to protect their vested interests, or helping stakeholders gain more benefits. Family businesses can deal with personal feelings and relationships between business…show more content…
Family businesses often lack clear distribution of functions of design and, sometimes the entire organization is like an extended family, more in accordance with the Act on family planning, lack of scientific principles of organization, often for staff relations within the family to consider, because positions, nepotism was common. In order to take care of family members at the expense of the global. Many family businesses of many job functions is not very different, sets over and over again, so that the powers and responsibilities of the individual benefit defines
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