What the advantages and disadvantages are when using the 3-Circle model to make sense of your family’s business?
This discussion mill mainly target my personal specific situation, but will still hopefully provide valid contribution to the discussion. The three circle model, from an external perspective, provides extremely valid points and positions within a family business, displaying the common grounds and differences between the vaious roles. What I will contribute and add to the discussion is the fact that my personal experience is that of still being in a highly developmental phase, and as well as this, do not plan, at least initially, to involve extended family members. Operations would be entirely limited to the close sections of my family, including specifically those with which I have an exclusively positive relationship with.
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?
As mentioned above, the business plan and idea that I possess is not yet developed enough to be able to appropriately determine the roles that would have to be assigned for there to be the effective creation of an agency within the business, either would there be the need to rely upon external factors.
3. What disadvantages can the idea of agency bring to family business?
I believe that the concept of agency would effectively rid the majority of the advantages that a family business presents, at least in my case specifically. The major facto coming into play, at least initially, is that of dependability. The emotional implication that comes into play when initiating a family business, especially a small one in scale, allows for there to be an extremely high level of trust amongst its members. By integrating an anomaly such as that of the concept of agency within this picture, it could effectively disrupt the positive effects that were present up to that moment.
4. 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?
My current role is, in effect, entirely that of the agent, as I am not the main owner of the firm itself. Given my limited professional career compared to that of my parents, I do not have the facilities or capabilities to effectively be able to position myself as an owner of the firm. However, the advantages that we have are those of these roles truly being blended, due to the fact that there is no true definition in regards to what the extents of the authority each family member possesses reaches to.
Prompt: What I may mention is that I am glad that the size and reach of my own family business is as restricted as it is. At least in the developmental phase, it is essential to not have any sort of external or biased input that may derail the creation and growth of the firm. What are some views, though, in regards to the concept of agency within a very small family business? While for organisation and hierarchical purposes this may be essential, is it truly needed given the smaller context? Is a hierarchy truly needed?
The idea of agency can reduce informal communication within the family business. It might reduce the overall effectiveness of the employees by increasing professionalism in the work environment. In a family business, employees are usually communicating informally, and this helps the smooth operations of the company. However, the idea of agency can have a negative impact on that. There can be conflicts among the employees and as a result, the overall operations of the company are affected.