1. What do you believe are additional reasons to support the statistic that 70%
ID: 326413 • Letter: 1
Question
1. What do you believe are additional reasons to support the statistic that 70% of the family businesses fail or are sold before the second generation ownership gets a chance to succeed? Discuss why next-generation family members may not be qualified or suited to take over the business.
2. Do the odds of the long-term survival of a family business have more to do with the many career and educational opportunities available today and less to do with the quality of succession and long-term strategic planning? What are other contributing factors?
Explanation / Answer
1)70% of the family businesses fail or are sold before the second generation ownership gets a chance to succeed because of the separation of owners of the business, they start lacking mutual understanding to take decisions .this may be due to personal fights at home or sibling rivalry. Here comes the ego which becomes impossible to control. next generation family members may not be qualified or suited to take over the business as today’s generation have less patience in making decisions and are more risk takers. They get carried away with their emotional feelings very quickly which may be harmful for a business to continue for long term. There are more personal conflicts at work now days
2) Many career and educational opportunities available today make it more attractive for next generation to opt for different careers of their choice rather than getting into family business .people are getting the highest education possible to pursue their interest. They want to get into their dream job. While quality of succession and long term strategic planning are also important for the survival of family business but in today’s generation this concept of getting a readymade start up business do not motivate much to this generation.
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