The family business model works depending on a three-circle model: family, ownership and business, where it helped to understand how these areas directly and indirectly overlap with each other. We also identified Agency Costs and Stewardship Theory in family business, where I learned that owners are intrinsically motivated by their interest to act, which navigates their Shareholder-Manager Conflict (Chrisman, Chua & Sharma, 2005; Schulze, Lubatkin & Dina, 2003). These learnings were helpful to me to understand how different members of a family may have different priorities based on their social circle. My peer’s comment on how religion and culture affect business decisions was significant. However, I added the role of different legal frameworks in different countries to shape family businesses. This comparative view helped me to gain multiple insights on factors related to managing a family firm.
Reference:
Chrisman, J. J., Chua, J. H., & Sharma, P. (2005). Trends and directions in the development of a strategic management theory of the family firm. Entrepreneurship Theory and Practice, 29(5), 555-576. doi:10.1111/j.1540-6520.2005.00098.x
Schulze, W. S., Lubatkin, M. H., & Dino, R. N. (2003). Toward a theory of agency and altruism in family firms. Journal of Business Venturing, 18(4), 473-490. doi:10.1016/S0883-9026(03)00054-5