Abstract
This study aims to approach the potential risks of the family businesses, on the basis of extensive literature and theoretical researches. This paper first provides a global overview that summarize the key literature of the family business risks, categorized according to their specificities. Subsequently, the risk mapping framework proposed is inspired by the internal control objectives (Note 1) suggested by the COSO 1 and 2 standards. This helped draw a global mapping of risks that therefore constitutes a first global risk mapping in literature, which are likely specific to this type of business. The result of our paper aims to enrich the theory and help managers to anticipate and manage family business risks.
Highlights
Research on the family business continues to expand and consolidate its relevance and legitimacy
We believe that developing a kind of mapping for risks of the family business would undoubtedly be an important step to have a global vision of the potential risks of this business
The objective of this study was to propose an analytical framework that helps decipher and anticipate managing risks of the family business dysfunctions presumably hampering the family business government. The categorization of these risks is of high importance because it helps identifying potential risks according to their sources
Summary
Research on the family business continues to expand and consolidate its relevance and legitimacy. The success of an investment in family businesses depends on certain criteria, mainly related to managers: the degree of their vigilance in the selection of projects, the clarification of their financial decisions, the planning in advance of the continuity of their businesses, and the intention of carrying out a given level of investment This last criterion, considered by (El mabrouki & al, 2012) (Note 9), as the most important arises from the conjunction of various elements including the family decision structures and the financial constraints felt or foreseeable by the leaders. The outside owners (usually minority), would support the same investment project risks as in non- family businesses because they benefit only from the appreciation of shareholder value (Schulze, Lubatkin and Dino, 2003) They would be indifferent to the level of risk inherent in any particular investment undertaken by the company because they can reduce it by dividing their portfolios. Hirigoyen has developed an approach relevant to the governance of the family business; "behavioral governance", which would allow us to clear the behavior of different actors in the operation of the family business and risks through these behaviors
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