The survival of a family business is based on strong intentions of the owners and not merely on luck. The example of Japanese hotel Ryokan Hoshi is quite relevant in this regard; it was founded in 717 A. D. and is run by the 46th generation of the Hoshi family. Such foundations are neither accidentally built nor through trial and error. It is a conscious choice to create a long- life company by building a strong foundation as a first step.
The ultimate challenge for a family business is to balance tradition with innovation. The younger generation increasingly looks for a work- life balance in which their personal and professional life has a clear distinction. Seeing their parents working 24/ 7 has proved to be a big turn- off for most children. The younger generation looks for a meaningful work atmosphere, where their personal freedom to explore growth at their own pace is not hampered. They want to bring their personalities into workplace, which is only possible through sharing a personal bond with the family elders other than the professional association.
It can be inferred that the commitment of oneself and the company to the goal of a long and independent life is based on passion. This passion needs to be engendered in younger generations, as it is their readiness which is required for building a long lasting family business. This is mostly done by exposing children to business practices from an early age, enabling them to earn appropriate university degrees, and requiring them to get complementary work experience in other companies before joining the family business. These measures lay the basic foundation for nurturing the essential leadership qualities for running a family business.
Importantly, for a longstanding business, it is not always good to hear only what is preferred and wanted under an authoritarian system. Accountability is the foremost aspect of any organization, which can be achieved by exercising good governance. This implies that the board should also comprise non- family members who advise on the basis of their expertise and independence from family bonds. Thus, the ill performance of a family member executive can be countered with a relevant action of the board in order to avoid succession, conflict and stress. In this manner the company’s future is not constrained.
Due to the involvement of emotional bonds, decisions of leadership transition and finalization of agreements may get tough. Therefore, it is most important to maintain a rational and democratic decision- making environment which keeps the family members away from emotional stress and closer to the task in hand. A prior exchange of views helps in building strong understanding over such issues.
Experts also highlight the significance of keeping a family business healthy with a reliable communication structure, where prenuptial agreements, employment policies and other corporate documents ensure a strong and lasting business. This communication is necessary as it expresses commitment, passion and accountability- based guiding rules for the business. In cases, where executives of a family business neglect the need of wills and buysell agreements, they easily invite a self- created menace into their homes. Importance of communication is also realized by the fact that it is not necessary for the family members to be well- understood by each other; therefore a careful and conscious hearing of the thoughts of the people ensures a constant gain of knowledge.
By extracting the positives of the family business structure, young entrepreneurs are increasingly attracted towards this business domain, although with great adaptation by inverting the traditional family- business structure upside down