Sporting Family Business Generations

Abstract

Family businesses are legacy treasures, to be passed on to the next generation. The inheritance of the business is wishfully given to the sibling belonging to the next generation. The decision to hand over business engages a high level of emotional connection with the family and business. The founder as patriarch is solely responsible for this divide and transition. At the time of taking this decision, the level of competencies available with the next generation, including their innate interest to be in the family business is not actively considered, which may be imperative towards professionalization of the family business. Because of altruism, level of professionalization required in the interest of the family business, may not reach the optimum level. As a result, lower competitiveness may lead to reduced performance in businesses.At some point in the life cycle of a family business, the family owners might decide that they should professionalize their firm. 'Professionalization' is often thought to mean, 'changing from family management to non-family management.' Professionalization can also happen, when a family sibling, with desired capabilities, is chosen to lead the business. He or she is provided with an opportunity to acquire capability to understand the complexities of the family business and management. This may happen through higher education, constant training and in-house exposure by engaging actively in the family business. During this professionalization process, the founder manager may or may not like to be directly connected with the family business, or stay in any decision making position. Autonomy, to the next generation is passed over based on the level of competency inherited or acquired.It is a known fact that most industry leaders around the world are family businesses and are also good examples of professionalism. A company can be family-owned and managed and be professional, at the same time. Terms like 'family managers' and 'professional managers' imply that the only way to be 'professional' is to be 'non-family', which means, a definite line of difference has to be drawn between the decisions of 'family interest' and 'business interest'. Professionalism does not imply having a family manager or non-family manager in family business. It implies nurturing one’s, competency, capability, attitude and behavior essentially required towards the growth of the family business.Businesses largely compete on the basis of available talent, competency and capability. Family business must be open to induct competent people within the family with required skills to lead the company. If a family nurtures a member with requisite skills, values, and ability to keep shareholders, employees, key customers, and suppliers loyal to business, then family leadership is the best option. As the business grows in dimension, differential capabilities are required to run the business competitively, which might not be easily available within the family, hence, inducting talented individuals as professionals is a better option. A family must be realistic about the talents available internally within the family business. It must also take into account the passion and the driving entrepreneurial orientation, which would later be pertinent to lead the business.