1. STRATEGIC PLANNING FOR FAMILY BUSINESSES FOR CONTINUITY
Presented by:
Dr. Sami T. Salman

2. SPECIAL CHALLENGES OF FAMILY FIRMS
Poor
estate planning,
inability of next
generation
to pay
death duties
Finding capital
for growth without
diluting
family equity
Conflict between
family’s vs.
Business’ need
For cash
Inability
of family CEO
to “let go”
In time
Inability
to attract and
retain competent
and motivated
family
successors
Sibling rivalries,
non-acceptance
of chosen
successors
Inability
to attract and
retain senior
non family
professional
managers
Lack of ability
to create
appropriate
Cultural
congruity

3. POSITIVE CORRELATES OF BUSINESS CONTINUITY PLANNING
1. Size of the business
2. Level of the strategic planning
3. Level of the perceived family harmony
4. % of outsiders on board
5. Age of owner manager
6. Degree of internality of owner-managers
Locus of control

4. FAMILY BUSINESS: THE ULTIMATE PARADOX?
Family businesses have built-in conflicts due to the intersection of tow worlds which are governed by different values and logics*
Family word
Mutual cooperation
Loyalty
Unity
Permanence
stability
Business word
Competition
Opportunities
Diversity
Impermanence
Instability

5. CULTURAL DIFFERENCES FAMILY BUSINESS Emotional focus Memories
Character development
“Who you are”
Prepares individual for future
Fact focus
Future
Skills development
“What you do”
Does not prepare
Individual for future
After the business

6. Conflicts are inevitable in family businesses
The potential for conflicts increases
In an environment of change
Destructive
Conflicts
Constructive

7. “If there is any secret of success, it lies in the ability to get
The other person’s point of view
and see things from his angle
as well as from your own”.
Henry Ford

8. SUCCESSFUL FAMILY BUSINESSES
Have excellent
management development systems.
Train the family on ownership
responsibilities From an early age.
Treat their employees fairly and with loyalty
Have a high sense of
responsibilities to society.
Emphasize value for money and quality.
Quick decision making.
7. Take a long term strategic perspective.
8. Are innovative and entrepreneurial.

9. Table 1-2: Three-Circle Model
Ownership
PLANS
Share Holders Meetings
Family Plan
Mgmt. Development Plan
Strategic Plan
Continuity and Contingency Plan
Estate Plan
Structure
Board of Directors
Plan 1
Plan 6
Plan 4
Structure
Family
Council
Plan 5
Structure
Mgmt.
Development
Plan
Plan 2
Plan 3
Family
Business

10. Table 2-2: Personal Factors that Motivate Offspring to Join Family Business
Motivating Factor
Frequency
Make money
67%
Like the business
50%
Good career opportunity
45%
Family influence
40%
Help the family
39%

11. Figure 1-5: Overview of the Family Business Strategic Planning Model
Constitution
Succession
Planning
Vision +
Mission
Conflict
Management
Survival
Strategy
Personal
Factors
Family
Economical Vs
Financial
Technology
Vision +
Mission
Partnership
Social HR
Political
Marketing
Environment
F A M I L Y
B U S I N E S S

12. Figure 2-5: Family Factors in the model
Constitution
Succession
Planning
Vision +
Mission
Conflict
Management
Survival
Strategy
Personal
Factors
Family
F A M I L Y

13. Figure 3-5: Business Factors in the model
Economical Vs
Financial
Technology
Vision +
Mission
Partnership
Social HR
Political
Marketing
Environment
B U S I N E S S

14. Figure 4-5: Family Assessment for Case Study No. 1

15. Figure 5-5: Business Assessment for Case Study No. 1

16. CONCLUSIONS AND RECOMMENDATIONS
Feedback and control and family continuity plan.
Exploiting the external environment for growth and change management.
Developing a second line of command structure.
Monitoring the critical success factors
Creating a unified planning approach.
Aligning of family vision and mission with that of business vision and mission
Identifying the family and business co-relation

17. END OF PRESENTATION