Again, as the economy becomes increasingly global, there may be effective ways to create a well-managed integrated company that crosses geographical boundaries. That integration may be much easier if both companies are family businesses. Trust Is The Key All of this, of course, assumes that the family is functional and in general agreement on things, including how much to pay out to individual shareholders and how much to reinvest. If family relationships are divisive, those negative relationships carry over into the business and often are more destructive than they would be between co-workers or managers who have no other relationship. Family businesses, when they function well, function on trust whether located in Boston or Bangkok or Burundi.
Family businesses have a different relationship.
Management and ownership overlap. Perhaps more importantly, shareholders and family are the same group. Therefore working for the best interests of the family, as most of us want to do, is the same as working for the interests of the owners. Typically, if there is not trust between these segments, the business has to be sold or liquidated. It is extremely difficult to maintain a family business where there is lack of trust among these groups, whether that distrust originates with business issues or from personal aspects of family relationships.