Economist Joseph Schumpeter famously identified owner-entrepreneurs as key enablers of economic development. But, once entrepreneurial companies evolve into family firms, can they maintain that positive role in society?This is an important question since in many economies, especially in Asia and other emerging markets, family firms are the dominant form of business. It is important also not just for family business owners, but for employees, investors, business partners and governments.
Family-owned businesses are often portrayed as the engine of the private sector—pointing at advantages such as faster decision making, a more integrated management style, long-term mindset or a win-win approach toward business partnerships.
However, while combining family and business can be a winning strategy, it also comes with limitations, particularly when family businesses become more complicated.
Decision making becomes less straightforward when it involves more than one decision maker, or when the business has outgrown the entrepreneur’s ability to run it alone.
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