Collins, L., O'Regan, N., Hughes, T. and Tucker, J.
Strategic thinking in family businesses.
IFERA 2009, Cyprus, 4-8 July 2009.
Abstract: This practitioner orientated paper seeks to understand better how management knowledge is created, shared and disseminated in family businesses (FBs). It outlines the initial findings from an exploratory study with senior managers of 20 FBs and FB experts that sought to examine the extent to which FB directors engage in strategic thinking, the issues that are considered part of strategic thinking, and the processes and tools driving strategic decision making. The results indicate that strategic thinking is not consistent across generations of FBs, as second generation (SG) firms tend to focus on operational issues whereas third generation (TG) firms have a more strategic focus. While all generations have to balance the ‘business’ and ‘family’ issues, it is likely that the ‘family’ element will have greater complexities in third generation businesses due to business maturity and extended family involvement. Results also illuminate that certain strategic issues and challenges relating to financing and capital structure, amongst others, are thought of differently in family businesses. Our findings indicate that FBs have differing management strategies, control systems and means of operating that impact on the extent and shape of strategic thinking. Finally, we contend that the present volatile business environment is the ideal time to focus on the development of sound strategic thinking to inform strategic planning which focuses the firm on the changing external environment and encourages a realistic appraisal of possible responses, dealing with threats before they become insurmountable.
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