Prof. Ken Moores is a Professor in Management (Family Business) and Founding Director of the Australian Centre for Family Business. As a founding academic member of Bond University, Prof. Moores initially undertook the responsibilities of Professor of Accounting and sometimes Dean and Associate Dean of the School of Business. Prior to resuming Directorship of the Centre in 2004, Professor Moores served as Vice-Chancellor and President of Bond University from 1997 to 2003. Ken is also a veteran Family Business Chairman and Non-Executive Director of Fourth Generation family business. Professor Moores pioneered research and recognition of family business in Australia and has achieved international recognition for his work. His 2003 book based on involvement with Australia’s entrepreneurial family business community, co-authored with Mary Barrett, "Learning Family Business: Paradoxes and Pathways", has been widely acclaimed for its insightful observations about family businesses.

1. What does professionalizing
your family business really
mean…and why does it
matter
Emeritus Professor Ken Moores AM
Bond University
Executive Chair, Moores Family Enterprise
May, 2015

4. outline
1. Origins
◦ Who started the conversation
◦ When the conversation started
2. Rationale and essence
◦ Why
◦ What
◦ How

5. origins
 Literature was largely dominated by advisers
 Central theme family firms needed to professionalize
 To address prevailing issues principally succession
What did they mean by professionalization?
 The advice troubled on three grounds:
1. It was demeaning to family business owners
2. It was from the perspective on non-family firms
(i.e. they were the exemplar model)
3. It was unidimensional terms.

6. origins
1. Demeaning Nature of Advice
◦ Suggestion: family business leaders were unprofessional or
amateurs
◦ Origins of this thinking:
 Berle and Means (1932) ….the modern corporation.
 Chandler (1962, 1977) ….careers of the salaried managers became
increasingly professional and technical
 Family capitalism succeeded by managerial capitalism
2. Perspective of Advice
◦ Should be more like non-family firms
◦ Fails to acknowledge fundamental difference
3. Dimensionality of Advice
◦ Presence of only full-time nonfamily employees

7. family business model
Owners Managers
Family

8. why
Benefits of professionalization
1. Human resource practices
 Outperformed non-family firms
 Crack the glass ceiling
2. Next generations opportunities
 Alternative professions
 Elite education
3. Coping with complexity
 Business alliances
 Increased diversity (boards, managers)
4. Financial
 Banking relationships
 Capital raising opportunities

9. what
 A transformation
 Professionalization lacks a singular
meaning
 Bureaucratization or profession
 Uni-dimensional to multi-dimensional
 Research and evidence
 5 Dimensions…but

10. dimensions
Five dimensions isolated
Internal Formalization
1. Financial Control Systems
2. Human Resource Control Systems
Effective Openness (Governance)
3. Nonfamily involvement in
Governance Systems
4. Decentralization of Authority
5. Top Level Activeness

11. High Clench
Hybrid
Autocracy
Administrative
Hybrid
Domestic
Configuration
Effective
Openness
Low
Low
Internal
Formalization
High
family business types

12. types of family firms
1. Autocracy Low
 Typical owner-managed firm; paternalistic culture
 Highly centralized; informal controls; ad hoc decision
making, little openness
2. Domestic configuration Beginning
 Family involvement in management
 Centralized authority; control systems (Financial and HR)
introduced
3. Administrative hybrid Highest
 Family involvement diminishing
 Authority decentralized; financial and HR controls in place
4. Clench hybrid Nonfamily
 Decreasing family involvement
 Family and nonfamily clenched together

13. how
AGES
1. Architecture (structure & systems)
2. Governance (business & family)
3. Entrepreneurship (leadership & strategy)
4. Stewardship (individual & firm level)

15. professionalizing AGES
way
AGes
1. Architecture (structure & systems)
2. Governance (business & family)
These structures with systems that preserve
the attitudes and behaviours
3. entrepreneurship
4. stewardship

17. conclusion
 Why
◦ To achieve competitive advantage and longevity
 What
◦ Preserves family business difference while making
transitions to improved states
 How
◦ Achieving better (and ultimately best) practice in the
areas of A, G, E, and S
◦ Family governance can help nurture stewardship
and inspire entrepreneurial attitudes and behaviours
that engender competitive advantages to sustain your
business across multiple generations
THANK YOU

18. Discussion Questions
1. What observable features indicate
the presence of professionalization in a
family business?
2. What type of family firm is the case
firm? Explain.
3. How could the case firm further
develop its professionalization while
preserving its familiness?