TOPICS: MANAGING CONFLICT AND SUCCESSION IN FAMILY BUSINESS in Spring 2021 (BA5091C)

Managing any business can be challenging these days especially with the increasing impact of factors such as technology, social media and globalization. But managing a family business can be especially difficult as the challenges and opportunities facing family-owned enterprises are also the result of issues presented by the interaction of family, management, and ownership—particularly where the family wishes to continue to exert it influence and/or control from generation to generation. While the majority of family business owners would like to see their business transferred to the next generation, it is estimated that 70% will not survive into the 2nd generation and 90% will not make it to the 3rd generation. Yet there are many examples of successful multigenerational firms. In Italy, fourth generation Agnellis now control Fiat. In France, the Peugeot heirs work at the company, serve on its board, and control the company. In Germany, second-generation Quandt family members own 46 percent of BMW shares. And in the United States, fourth-generation Ford chairman William Clay Ford serves alongside a nonfamily CEO, Alan Mulally. Given the success stories of these family firms, it is imperative to clearly understand: (1) the fundamental nature of the task of next-generation leaders in family firms—the rewards and challenges, and how their task is different from the founders’; (2) the fit between the needs of the firm and the attributes and interests of next-generation family members; and (3) strategies that can be used to prepare the leadership AND ownership succession.