Models of family business

A successful business model needs to be founded upon an organisation’s identity. To achieve success, such a model must also be focused on satisfying the stipulated needs of the ever-narrowing client segments, while taking full advantage of basic capacities and knowledge within the organisation.

In order to design such a model, the following factors need to be taken into account: co-operating with a variety of agents to boost differentiation; exploring novel systems of income generation; increasing value-added elements of key products and/or services, and promoting the intelligent participation of every member of the company. As a consequence, all business models need to take the form of a unique value proposal so the market can ensure the development of a sustainable business project, in economic, social and environmental terms.

Family businesses can discover a number of useful dynamics in their quest for a winning family business model which would develop coherent and innovative approaches to business leading to a source of sustainable competitiveness. Furthermore, the marriage between the family business project and the business itself must engender a sense of identity and enduring future commitment. As a result, a greater predisposition to reinvestment would infuse spirit into organisations and render them more human. This would both give rise to communities of people flourishing at the heart of the company and spur an ongoing search for stable long-term relationships with clients.

In order to allow the family to participate in the strategy of the company project, family businesses need to incorporate strategic thinking into their organisations and transform management mechanisms. Thus, the family’s place in decision-making processes needs to be clearly established, along with defining mechanisms of participation, pay and specific roles in the company, among others.

Ultimately, effective strategic management in this type of company requires correctly understanding the emotional and psychological component, while not forgetting the family history and its aspirations. These four elements, when carefully considered, take on special relevance in firms that are not family-based, greatly influencing the quality of the various business models.

Sabin Azua

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