editing disabled

There are two main categories of fairness involved with family business; job fairness and succession fairness.



Employment Fairness

When working in a family business there is a large issue of entitlement. Each member of the family who is interested in joining the business expects the same opportunities. This becomes unclear when each child brings a different skill set to the business. The founding generation of the family business loves the family and the business. They generally do not want conflict, especially within the family, but they also would like the business to remain successful. They might choose a child for each key role, maybe one in operations and another in management. The most senior child may receive the first job and therefore the most business experience, this can lead to a higher position over time. This can appear unfair to other children who join the business later.


Succession Fairness

When a family business is passed on to the next generation things can get very messy. Most businesses have a main asset that is more valuable than the others. When a parent decides how to spread out ownership of this business this is not a problem. The true problem generally surfaces when one or more children decides to leave the business. There are generally very few liquid assets available to "buy out" that party. This can lead to the need to sell the main asset of the company. With this asset gone, the business is under supplied and can fail.

Writer: David Caccavo
Organization: University of Vermont.


Sources: http://www.producersweb.com/r/BEI/d/contentFocus/?adcID=36b275093a63d4988fde756f9f84603e&pn=2