Hi, need to submit a 500 words essay on the topic What Might Succession Be A Critical Point in the Development of the Family Owned-And-Managed SME.
This research will begin with the statement that the family-owned small and medium-sized enterprises are the commercial organization that is related by marriage or blood and resolution creation is entirely influenced by several family generations. It is believed to be the oldest system of business organization that has advantages of commitment to quality and focuses in long term. It is critical for understanding circumstances that leads to unhealthy and healthy family SME. The family-owned SME is considered as common and oldest model of economic business organization. There are a massive majority of companies from multinational listed and corner shop listed administrations that can be regarded as the family owned small and medium-sized enterprises. The five critical points that involve at the development of family businesses are social capital, human capital, patient financial capital, low cost of governance and survivability capital. The inner circle and human capital are considered as the first resource and the primary element. In the form of external relationships and networking, the valuable social capital has been brought by the family members. The threat of liquidation is lessened by effective family relationships with managers and investors. The firms have an opportunity to provide emergency loans and free labor for survivability capital of their family members. In perspective to infrastructure dimension, the strengths of family firms are innovative, informal, entrepreneurial and flexible. The organizational structure is believed to be effective and simple. This is primarily because the hierarchical position of family-owned SME is simple. Family members have the better understanding of each other. This enables to family businesses to expand globally. Most of the family-owned small and medium-sized enterprises are considered to have compact informal training. The mixture of younger and older individuals adds something new to the family business operation. The family members involved in SME are believed to be more committed to help a business grow and survive. The employee relations for family businesses are better.