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Unconventional Wisdom

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Unconventional Wisdom

Counterintuitive Insights for Family Business Success

Wiley,

15 min read
10 take-aways
Text available

What's inside?

Family businesses have some unexpected competitive advantages, including a basis of trust and a long-range perspective.

Editorial Rating

8

Qualities

  • Innovative

Recommendation

This brief book is the product of an academic collaboration but its professorial essays are mercifully clear and free of academic jargon. This collection, edited by John Ward, explores the performance, management and governance issues that matter most to family businesses. The title refers to the fact that family-owned companies are unconventional, at least in comparison to publicly owned businesses and, therefore, they need a distinctive management approach. Family businesses derive competitive advantage from precisely those practices that conventional managers abhor - such as nepotism. getAbstract recommends this book to anyone engaged in a family business, and certainly to other academics studying this subject.

Summary

The Family Business

Family business is one of the oldest forms of business, but family companies have become much more complex in recent years. In fact, family tensions and family conservatism once seemed to clash with professional management. Over time, advisers following conventional business wisdom have recommended segregating business and family. Yet new research suggests that in many areas, family and business concerns complement each other, and that family businesses generally prosper. Thus, conventional management wisdom may be inappropriate for family businesses. In the end, family relationships are a source of strength, although they can be a source of conflict, as well.

Some of the more important differences between family businesses and publicly owned corporations are:

  • Family businesses aim for long-term continuity, while publicly owned corporations aim for short-term share price performance.
  • Family business goals include preserving family wealth and reputation, but publicly owned businesses must satisfy investor demands.
  • Family businesses are often risk-averse, while publicly owned corporations often seek risk because it promises...

About the Authors

The authors are professors at IMD, a business school in Lausanne, Switzerland. Daniel Denison teaches management and organization. Peter Lorange teaches strategy. Jean L. Kahwajy and George Kohlrieser teach organizational behavior. Ulrich Steger chairs environmental management. Joachim Schwass co-directs the school’s Family Business Center and teaches family business, as does editor John Ward. Colleen Leif is the Center’s lead researcher.

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