family business (MBA)

1. Kay Zin Latt (D580072)
Family Business Assignment: Aurum Furniture and In-Law Management
1. Discuss the key personal, family and business challenges that John encountered when he
started work at Aurum.
The challenges John encountered are as follows:
(i) He missed the timing; he had been avoiding the period invitations of his father-in-law
and brothers-in-law
(ii) His announcement to join in the family business made family members confused to
acknowledge his capability of management
(iii) No formalized structure and no lines of authority in the firm
(iv) No specific role and paid which created an identity crisis for himself
(v) His wife plays a more important role as a family member and shareholder in the firm
(vi) He was lack of power to involve in strategic decisions and participating in quarterly
meetings while his wife had power to do so
(vii) He had a relatively emotion-free style of decision making and implementation while no
important decision was made without a consensus among family members in Aurum
(viii) Because of tensions among the siblings, there are two-tire situation with family
members on one level and everyone else on the other
(ix) Family members did not regard John as a family member working for family business
2. What tactics did john use to overcome these challenges?
(i) John inserted himself into financial operations, the most suitable role for him, to help
cost control and financial reporting and to avoid making any major decisions.
(ii) He attempted to make the best of financial statements and the analyses, and endured his
exclusion from family meetings
(iii) Because of his effort on his work, he got some feedbacks from the family members
through his wife
(iv) He committed to his plan of action to contribute without intervening so that can avoid
conflicts with any family members
(v) He persisted in his determination to create a professional environment and worked out
policies and procedures, creating “memos” where an employee or family member would
state goals and objectives and then be empowered to make decisions and take action.
(vi) Because of his attempt, his initiatives were seen by the family to be paying off. And,
finally, he gained the trust from the family members and was asked to join the family
meetings within eight months of his participation.
3. What benefits did Aurum derive from John's attempt to professionalize the firm?
Because of John’s attempt to professionalize the firm, financial statements and the analyses are
well organized and Aurum has more formalized structure and specific lines of authority in the
firm. Policies, procedures, goals and objectives are more visible to implement. The organization
became more energetic and the business started to grow again. The company was slowly

2. Kay Zin Latt (D580072)
evolving from one run with a paternalistic, consensus-sensitive management style to one with a
more professional culture.
4. What would you recommend to John to make his integration into the family and firm
faster and smoother?
John became a common consultant of family members, especially of his brothers-in-law. Each
brother constantly looked to John for support of his views. The more the company becomes
professional the higher John’s role in the firm is than before. Because of his professional
contribution, he already gained family’s trust in short-term. So I would like to recommend to
John to make his integration into the family and firm faster and smoother as follow:
(i) He should act as the eldest son of the family instead of thinking as an in-law so that he can
earn not only trust but also respect as a professional from the family members.
(ii) He should persuade his brothers-in-law to get along with each other and not to fight
against each other any longer.
(iii) With emotional attachment to Aurum, he should manage transparently the firm with the
commitment of sustainable development.
5. Which alternative would you recommend to John and why?
As an alternative, I would like to recommend to John to accept the invitation of the news
industry as a vice-president for a regional television company. Let the family members see
clearly his professional contributions are so worthy to acknowledge and know the value of his
management. He can save and invest from his pay to start his own business. He can support his
wife to gain trust and respect from her family members by giving advices and reviewing her
actions as a consultant. If he accepts the invitation of the news industry, his in-laws can no
longer misunderstand and be suspicious on his participation into the Aurum.