In this issue
Tyco. Enron. WorldCom. Adelphia. If you're a director of a private family-owned company, you may assume that these Wall Street problems have nothing to do with you or your business. That assumption is wrong—and potentially dangerous.
Most family business owners want to ensure that their employees receive adequate benefits without severely affecting the company's bottom line. But rising health care costs have made this goal quite a challenge. The Henry J. Kaiser Family Foundation noted that medical premiums rose 14% in 2003. It's no wonder that two-thirds of the small-business owners who responded to a 2004 survey by the National Federation of Independent Businesses listed health care costs as a “critical problem,” up 18% over a four-year period.
In Turkey, as in most of the world, the majority of businesses are family-owned. Many of our country's family firms encounter problems in making the transition to professional management. In conjunction with a course I teach on human resources management at Marmara University in Istanbul, we conducted a study in an effort to convert these informal observations into concrete data.
Like any other organization, family businesses undergo life cycle stages. They are born, they grow and —unless management knows how to adapt—they wither and die.
As a business evolves from one stage to the next, problems inevitably arise. They result from change and can be predicted, just as a parent can predict how a two-year-old or a teenager will behave.