Hiring Policies for Family Owned Businesses

Hiring Policies for Family Owned Businesses

The Jim Moran Institute for Global Entrepreneurship

Should hiring be strictly a business issue? There are two different approaches to this question. A family business could require family members that are interested in joining the firm to apply and compete for positions in the same manner as any other applicant. Promotions would be based on qualification not family membership. After all it is important to get the best employee for the position and to avoid any morale problems that may arise if an unqualified or underqualified family member is given a position in the company. On the other hand, in some family businesses there is a place for every member in the business that wants a position. Oftentimes in these businesses a position is created if one does not exist for an incoming family member. After all, it is a family business and it is the strength of the family ties and the commitment of family members to the business that is the greatest asset of the business.

In reality neither approach alone works best for a family business. A hiring process that incorporates the concerns of both the family and the business is the preferred approach. How would that work? Ideally thorough entry rules should be written up before members of the second generation begin to come of age to start working in the business. If these rules are clearly defined and have been articulated to all family members many misunderstandings could be avoided and lessen the possibility of offending anyone. I have found in my experience in working with family businesses that a majority of families have not established clear rules of entry for their children. Without rules, decisions about each family member have to be made on a case by case basis. The problem with this method is that it is difficult to be objective. More…

The Family Dramas of Succession and Inheritance

The Family Dramas of Succession and Inheritance
by Dennis T. Jaffe, Ph.D.
Saybrook Graduate School, and the Wharton School

Viewing family business in many countries, I have been struck by how, despite great cultural differences and practices, the major themes of the family and its intersection with business seem to be universal. The drama of the business patriarch–fierce, confident and powerful–and sons and daughters who struggle to find a role and a place in a universe where the patriarchal shadow is writ large, always lies in the background for the overt challenges to sustain and develop family business. As each business faces forces of globalization, growth, diversification, and competition, each family must also resolve its own dramas around legacy, inheritance, succession and family justice. In this article, I want to bring these archetypal dramas out of the shadows, and suggestion some ways that families can reduce some of the negative emotional energy that can limit the future of a business.

Freud used the Oedipus myth to dramatize a violent model of family succession where the sons plot to overthrow their father, to take up his authority and split it among them. Freud saw this bloody drama in many biblical and historical tales of royal sons ending their father’s reigns, and saw this as a somewhat universal succession model. The drama of sons’ jealousy and rivalry for power has been told in the biblical tales of Cain and Abel, and Joseph and his brothers. Since such myths are strongly masculine or feminine, I will use such pronouns in my reporting, rather than make them sex neutral. The feminine side of mythology provides images and stories of nurture and fertility, and collaboration and partnership, personified in the Earth Mother, which may account for the cooperative nature of cross-gender succession. More…