It's the hardest transition to make in a family company, and the consequences of not doing it can be devastating. A more unusual case, says Habbershon, involves a 3 rd generation U.S. manufacturing company that has a huge competitive advantage in its technology. But that technology is historically intuitive, residing particularly in one son in the current generation. He's been raised in the company, has no engineering degree but has created significant design efficiencies in their plant That is an inherent familial resource, a multigenerational efficiency. Only family firms can raise individuals to have this knowledge.
Public companies have to give stock options to make people feel like owners.
Family companies inherently have that efficiency, unless there is conflict. Then you lose twice. Your shareholders become demanding and you lose the agency relationship. And in this case you may end up losing the technological advantage as well. In his research paper, Habbershon identifies factors that were shown to shape an individual shareholder's positive perspective of risk.