A family firm that has become more formalized and structured in its management, governance, and decision-making processes is referred to as professionalized. This entails putting in place processes to guarantee continuous excellent performance and fairness, attracting, nurturing, and retaining top family and non-family personnel, enhancing family discipline and company dedication, and putting in place an external board and expert advisors.
A professionalized family business's performance is measured by evaluating financial and non-financial variables. Profitability, liquidity, solvency, efficiency ratios, return on investment (ROI), return on equity (ROE), and other metrics are examples of financial indicators. Customer satisfaction levels, employee engagement levels, innovation rates, risk-taking levels, etc. are examples of non-financial metrics. It is crucial to remember that to assess the performance of any family business effectively, these indicators should be customized to meet its unique demands.
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"professionalizing" The family business (2019) Fairleigh Dickinson University. Available at: https://www.fdu.edu/academics/centers-institutes/rothman/family-business-alliance/family-ink-articles/professionalizing-family-business/ (Accessed: March 18, 2023).
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