Generation to Generation: Life Cycles of the Family Business
The authors claim that between 65 to 80 percent of all businesses worldwide are family owned or managed, including up to 40 percent of the Fortune 500. Yet most of what we read about family businesses are sensational accounts of blood feuds and internecine battles over money and control. This study takes a more analytical look at what makes family firms different from other corporations; it grew out of the authors' collaboration at the Owner Managed Business Institute, where they worked on an ongoing project for Caterpillar, Inc., that began more than a dozen years ago. Now a multinational conglomerate, Caterpillar began as a family firm, and many of its products are distributed through family-operated dealerships. From that work, the authors developed a model that looked at these businesses from three different aspects: ownership, family, and business. They also identified four classic family-business types and here address the management issues that arise as firms evolve from one type to the next.David Rouse