Family business in south america
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Family Business in South America: A Generational Comparison
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Family business in south america
- 1. FAMILY BUSINESS IN SOUTH AMERICA: A GENERATIONAL COMPARISON MATTHEW SONFIELD, HOFSTRA UNIVERSITY ROBERT LUSSIER, SPRINGFIELD COLLEGE PRESENTED BY ENG. ISLAM ELZAYAT ,MBA,MCT
- 2. AGENDA •Introduction •Research Questions •Hypothesis •Methods •Statistical Analysis •Result and Decision
- 3. INTRODUCTION • This investigation compared first-, second- and third- generation family businesses in a sample of 210 family businesses in Argentina and Peru • Family firms constitute a highly important component of most countries’ economies • In the USA, an estimated 80 % of the total 15 million businesses are family businesses • Drawing on data from 210 family firms in Argentina and Peru, this paper reports on an analysis of generational issues
- 4. RESEARCH QUESTIONS Family firms move beyond the generations , Does any changes occur ?
- 5. RESEARCH QUESTIONS Is there are a significant differences between the Three generations ?
- 6. ARGENTINA • Family business plays a big role on Argentina business outcome • Argentina´s family businesses are of great socio- economic importance because almost 75 % of total businesses (1,200,000) are family firms • Approximately 50 % of GNP and 70 % of employment is contributed to family business, and they control 95 % of total trade • Also, 85 % of family businesses are founded by 26 to 28 year old
- 7. PERU • Peru is a nation with a population size of nearly 29.1 million people • GDP nearing $ 159 billion in 2010 • the Peruvian economy remained strong throughout the 2008-2009 global economic crisis due to proactive macroeconomic measures • 1990’s, the Peruvian government began to actively encourage SME development through government sponsored small enterprise development programs and
- 8. HYPOTHESIS 1 Subsequent-Generation Family Firms are more likely than First-Generation Family Firms to include non-family members within top management
- 9. HYPOTHESIS 2 Subsequent-Generation Family Firms are more likely than First-Generation Family Firms to have women family members working in the firm
- 10. HYPOTHESIS 3 Subsequent-Generation Family Firms are more likely than First-Generation Family Firms to use a “team-management” style of management
- 11. HYPOTHESIS 4 Subsequent-Generation Family Firms are more likely than First-Generation Family Firms to have conflict and disagreement between family members
- 12. HYPOTHESIS 5 Subsequent-Generation Family Firms are more likely than First-Generation Family Firms to have formulated specific succession plans
- 13. HYPOTHESIS 6 Subsequent-Generation Family Firms are more likely than First-Generation Family Firms to use outside consultants, advisors and professional services
- 14. HYPOTHESIS 7 Subsequent-Generation Family Firms spend more time engaging in strategic management activities than First- Generation Family Firms
- 15. HYPOTHESIS 8 Subsequent-Generation Family Firms are more likely than First-Generation Family Firms to use sophisticated methods of financial management
- 16. HYPOTHESIS 9 Top management styles and decisions in Subsequent-Generation Family Firms are neither more nor less likely than in First- Generation Family Firms to be influenced by the original business objectives and methods of the founder
- 17. HYPOTHESIS 10 Subsequent-Generation Family Firms are more likely than First-Generation Family Firms to have considered “going public.”
- 18. HYPOTHESIS 11 Subsequent-Generation Family Firms are neither more nor less likely than First- Generation Family Firms to use equity financing rather than debt financing.
- 19. METHODS •The objective of this study was to combine the data to provide a comprehensive and large sample of family firms •The research design was survey research using both mail and personal interviews
- 20. STATISTICAL ANALYSIS •Hypotheses 1-11 compared the dependent variable among the three generation groups using a one-way ANOVA test.
- 22. RESULTS AND DISCUSSION The use of outside consultants, advisors and professional services increased through the three generational levels, but only statistically significantly from the second-generation to the third-generation level.
- 23. RESULTS AND DISCUSSION The influence of the original business objectives and methods of the founder decreased through the three generational levels, but only statistically significantly from the second-generation to the third- generation level.
- 24. RESULTS AND DISCUSSION The likelihood of top management considering going public increased from the second-generation level to the third- generation level (but not form first- generation level to second-generation- level).
- 25. CONCLUSION •In summary, this investigation compared first-, second- and third-generation family businesses in a sample of 210 South American companies •Both supporting the authors’ various prior country studies and yet challenging the earlier more conceptual literature