Innovation & Entrepreneurship Leadership in the family business

1. THE PEER-ASSESSED INDIVIDUAL PROJECT
Family business information
• Name : BA.MAN GROUP LIMITED
• Sector : Commercial Sector
• Size : medium-sized enterprises (50 to 249 employees)
Genogram :
Gersick’s Development Model :
Youssef

2. Three-Circle Model
1. Family members who are not involved in the business
2. Nonfamily management and employees
5. Family members who work in the business but are not owners
7. Family members who are owners, management or employees

3. Gimeno’s Structural Model formula
The family business that I am involved in is relatively young with ownership of Father,
who has four sons involved as employees and two daughters does not work in the
business or have shares .With that being said, the level of structural risk for both family
and business are moderate . The business complexity is low because the products and
services are within same industry ( the company stick on one core business ) with a
few branches .
The structure development is low and needs to be enhanced to reduce the structural
risk. There is no formal succession plan in place ,the communication channel is very
well defined and rules for conflict resolution are under control of the father who
maintains monthly meetings to hash out potential conflict/issues that might arise as
well as any client or employee concerns .
The Management practices are not professional but can be improved and give it the
formal role . The governance ( roles ) are not clearly defined but on the another hand
there are constant communication and management practices in place even it is not
formal .
1- family complexity
The father – owner - and four sons involved as employees and two
daughters does not work in the business or have shares. So the amount of
family complexity is low .
2- business complexity
The amount of business complexity is low because of :
- Company size : medium-sized enterprises (50 to 249 employees)
- Number of branches : three branches
- Whether the company has achieved internationalization : local
company adapting to a specific, local audience.

4. 3- structure development
a) Institutionalization :
 The family business has administrative bodies but they do not work
well because of owner centralization .
 Some positions at various levels of the business are filled by people
who are fully able to do the job.
 There are some administration systems and some information
technology in place that enable the family business to be administered
efficiently If some improvements were made.
b) Family-business differentiation : the roles of the family members in the
business are not so clear, ownership defined – father is the owner and he is
only one who make the decisions - and the family members held the
secondary responsibilities.
c) Management practices : Management practices are informal and there is
no adequate information structure in place.
d) Communication : family members recognize their differences and there
are explicit rules that made by the father to solve conflicts.
e) Succession :
 the entrepreneurial capability of the next generations has not been
developed . in general the company does not encourage innovation
and instead of that stick to it’s core business.
 High dependency on the leader of the family business.
 There is informal succession plan.

5. Type of family business
I found that The family business structure are not just the result of the complexity
profile but also the result of how family think of their business . This enabled me to
identify these particular family business model as :
because of low family and business complexity. Observation of how family-business
relations are organised reveals that they revolve around one person - the father in
my case . This individual, The Captain, is the one who creates order in both family
and business.
Both family and business are seen as units that need a leader in order to develop and
perform. This idea embodies the thinking of the decision makers. This model can be
summed up by the saying: If two men ride a horse, one must ride behind.
This model works well so long as the captain’s traits meet the business’ needs. The
complexity profile does not allow separation of ownership from management. It can
be replicated successfully into the future providing ownership remains in the
managers’ hands and the next generation of managers have the required
competencies.
Captain
Model

6. Result of the online questionnaire

7. Proposal for improvement (recommendations)
Recommendations for the 5 diagnostic variables :
1- Leadership :
 The leadership must encourage freedom in decision-making and
reduce the centralization of this process, and it must support the
work and the formation of teamworks , as this has a great
impact on the growth of the company.
2- Strategy :
 The business model needs to be clearly defined and
understood.
 Priority and attention must be given to generating a strategic
plan to know first where are we now and where we are going to.
3- Innovation :
 The family business must encourage innovation, give the
opportunity for the new ideas to show up , support continuous
development, reduce its stick to its core business, and support it
with other activities that do not depend on it.
4- Institutionalization
 It is important to give the formal character to the family board
and the company’s board, and that each of them carry out it's
duties and obtain full support .
 It is also necessary to develop and improve some administrative
systems and focus on integrated information systems to
facilitate information control.
 Rules, policies, and procedures must be formalized and must be
written.
5- Continuity
 To sustain itself in the future the company must stick to solid
and formal plans , regulations , and give all support to it's
competitive resources .
 The structure should develop as the business grows. find the
weak points of the structure and start to work on them.
 Formal succession plan must be given.

8. Prediction of the family business model into which it will evolve.
By studying the configuring of the forward vision of the family, I can Predict
the evolve of the family business from a captain business to a professional
family.
Recommendations for developing the next generation
 Encourage the generation of new ideas and innovation and give the
next generation trust , freedom , and opportunity to experience the
failure and learn from it .
 It's important to generate action plans to develop the next generation's
competencies, with training programs and learning with guidance and
supervision of experts and mentors.
 The strategies should foment the type of learning to develop the
entrepreneurial leader: absorb, interact, reflect, among others.
Recommendation for forming the family board or the board of directors,
as deemed necessary.
 A dynamic of governance, a board of directors, and a family board
must be formally created and the ability to coordinate complexity
between the company and the family through leadership must
improved to organize the family system and business system to
manage the family-business complexity properly .