The paper "Successful Family Run Business" Is a great example of a Management Essay. When analyzing and evaluating family businesses with a focus on identifying the criteria to measure success, one faces problems because of the subjective biases of family-run businesses and success ambiguity. Family businesses have varied personal goals that are unique to each one. Similarly, measurement and definition of success are incomparable across many companies that are family-run. However, finding measures and criteria for assessing success in these businesses is fundamental for policymakers, business managers and owners.
This paper identifies and explains the different criteria used to assess family business success. It explains these criteria basing the arguments on Shepherd Neame limited as an example of a successful family-run business. For both the professional and laypeople, success is an ambiguous term used to describe a person’ s or a firm’ s achievement. Neubauer & Lank (1998) explains that this implies that the overall criterion for measuring success is inappropriate because of the firm’ s varied financial and non-financial objectives. For family-run businesses to realize a realistic success picture of their firms they must not refer to individual strengths or weaknesses of their firms, rather, they should undertake a comprehensive analysis of the firm’ s overall dimensions.
Ambiguity in the definition of success in family-run businesses implies the lack of isolated measures, which may not reflect success in multiple businesses (Neubauer & Lank, 1998). Using isolated indicators to measure success produces inaccurate results, which cannot be used to compare success in multiple companies. A good measure is one that is capable of collectively assess success in many companies without any bias (Neubauer & Lank, 1998). To recognize the importance of family businesses in a country’ s economy, most countries have tailored relevant awards for recognizing successful businesses.
These awards are also used to encourage innovation and healthy competition amongst business owners (Neubauer & Lank, 1998). To understand the criteria for assessing family business success, we must look at the criteria used for selecting winners of these awards. One such famous award is the “ Coutts Prize” , which is a yearly event organized to celebrate successful family-run businesses (Neubauer & Lank, 1998). To ensure the credibility of this event, the awards are judged by an independent panel of experts and evaluation committees.
The awards help businesses recognize their overall performance, be aware of the importance of good governance and social responsibility as well as make them aware of their social and economic benefits. The general criteria for measuring eligible businesses for the Coutts award is four-fold: the company’ s ability to illustrate a combination of both corporate and family governance of high standards, the business should have a consistent financial performance that is spread over time, with a competitive position in the market (Hatten, 2003, p. 45).
In addition, it should have a charitable record of accomplishment or show involvement in activities of its local communities. For a company to be successful, it should have the above four qualities. Participating in social and community activities such as giving for a good course is a major accomplishment for any company or business (Hatten, 2003, p. 45). Similarly, the company’ s market share and financial position is an important criterion for assessing success. A company with no competition in the market and without consistent financial excellence cannot qualify for the award as the company’ s net worth is a useful indicator of success.
One successful family-run business is Shepherd Neame Limited, an English brewery and pub operator that specializes in the production of filtered beers and cask ales. The company was founded in 1698 and has since seen successive growth to become one of the most successful family businesses worldwide (Hatten, 2003, p. 46).
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