week 2

Week 2

1. What the advantages and disadvantages are when using the 3-Circle model to make sense of your family’s business?

Three-circle model, if implemented well, allows any family business system to identify the internal and external issues prevailing in the business. They also allow the family members to diagnose why these issues are spreading from one circle to others. Using the three-circle can cause conflict inside the business if the same is not used appropriately. The agency and family business can be triggered as the agents can be seen to have their self-interest which conflict with the benefit of family members and also can cause dissatisfaction between them as the operations start drifting towards professionalism.

2. How the idea of family and business agency contributes to either lower costs, higher sales or other business benefits for your family’s business? And how does the idea of agency contribute or erode the family dimension of your business?

Family business does involve the members of the family for contribution to lower the overall cost. It can result in increasing the profit and sale and on the other hand the conflicts between them can also be kept in mind as they are inevitable. There can be conflicts about the share of business, the designated role given to the members and the management of the business. The delicate thread of relationships has to be maintained while managing family business.

3. What disadvantages can the idea of agency bring to family business?

I personally believe that implementation of the concept of agency will ruin all the major advantages of family business especially in my case. Because the major factor that comes into play while building a family business is dependability on each other. An emotional implication while initiating the concept of working together whether its a large or a small one involves a lot of trust and confidence among the members. Employing the idea of agency can affect the emotional bonding as it is taken care of as per their traditional practices from decades.

How are you an agent of your family business and how might you use the learning in this module to increase or decrease the effects of your agency in your family’s business?

Being an agent I will try to implicate the learnings I have learned in the module. When an agency tries to bring professionalism in the business, the emotional bonding between the family members starts getting hampered. ALthough every movement has its pros and cons, calculating your priorities can help you out. The effect of agency can be a lot especially in the starting wherein the family members find difficult to adapt to the new culture.