Reentry Division Update To: Reentry Task Force April 20, 2010.
Consulting Process Chemistry Meeting Letter of Engagement Assessment Feedback/Planning...
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Transcript of Consulting Process Chemistry Meeting Letter of Engagement Assessment Feedback/Planning...
Consulting Process
Chemistry Meeting
Letter of Engagement
Assessment
Feedback/PlanningImplementation
Follow-up
Exit
ReentryFirst Contact
From Hilburt-Davis & Dyer (2003) Consulting to Family Businesses
Overview of the Consulting ProcessOverview of the Consulting Process
First Contact
Letter of Engagement/Contract
Areas for Assessment
Family:• Roles and Relationships• Culture and Values• Decision making, communications, conflict management
Business/Management:• Mission and Strategy• Structure and Culture• Systems and Processes• Leadership
Ownership/Governance• Mission and Goals• Ownership distribution• Legal Form/Board of Directors
BARRIERS TO GROWTH
1) Failing to Plan for Growth
2) Ineffective Leadership and Management Style
3) Ill Defined Organizational Structure
4) Lack of Information Systems
5) Unqualified Personnel and a Lack of HR Systems
6) An Organizational Culture that Fails to Foster Growth
7) Poor Partner Relations and an Ineffective Board of Directors
Family Factors Contributing to High Performance Family Factors Contributing to Low Performance
Agency Benefits Lower agency costs due to the alignment of
principal-agent goals Lower agency costs due to high trust and shared
values among family members
Agency Costs Higher agency costs due to conflicting goals in the
family Higher agency costs from opportunism, shirking,
and adverse selection because of altruism (i.e., family members fail to monitor each other)
Family Assets Human capital: the family has unique training, skills,
flexibility, and motivation
Family Liabilities Family lacks necessary skills and abilities due to
small labor pool, lack of talent, or inadequate training
Social capital: the family develops relationships outside the family with employees, customers, suppliers, and other stakeholders that generate goodwill
Family “branding” of the firm or of the firm’s goods and services may generate goodwill and a positive image with stakeholders
Family fails to develop social capital with key stakeholders due to distrust of outsiders (i. e. “amoral familism”)
Family relationships lead to complex conflicts among family that may undermine image and goodwill with stakeholders
Physical/financial capital: the family may have physical or financial assets that can be used to support the firm
Family uses firm assets for personal use, thus draining the firm of financial and other resources
Table 1“Family Factors” Affecting Firm Performance
AGENCY COSTS
FAMILYASSETS
Figure 1Typology of Family Firms
Quadrant IIQuadrant I
Quadrant IVQuadrant III
HIGH
LOW HIGH
HIGH
ProfessionalFamilyFirm
ClanFamilyFirm
Self-Interested FamilyFirm
Mom & Pop FamilyFirm
LOW
LOW
FAMILYLIABILITIES