1. MGT 4550 - Family Business Management
STRATEGIC MANAGEMENT OF THE FAMILY BUSINESS
Chapter 10
Family Business Management,
Concepts and Practice
By A. Bakr Ibrahim & Willard H. Ellis
Instructor: Dr. Irene Duhaime

2. Class Schedule - Week 10 (03/29)
STRATEGIC MANAGEMENT OF THE FAMILY BUSINESS
Reading: Chapter 10 FBM
Questions
1, 2, 38-41, 68, 69, 71, 72 FBAB

3. Question 69
Strategic Planning, mission statements, business plans, how should these concepts apply to a family business?

4. Question 1
How well is your business doing in your industry and in the context of the current economy?

5. Strategic Management of the Family Business
Planning: systematic evaluation of firm’s mission, objectives, strategy against its capabilities/resources and the environment
process, not document
continuous and periodic scheduled
both direction setting and activity guiding
process has content & behavioral outputs

6. Why Plan ?
To anticipate and respond to the dynamic, turbulent and unpredictable environment
To allow assessment of the past, present and the future
To guide the firm through strategic changes

7. Question 2
What is the best way to develop a long term strategy, including developing a framework to continue the business over the long haul?

8. Strategic Planning Long term strategic planning Operational planning
Budgeting

9. The Strategic Planning Process

10. The Strategic Planning Process - Mission Statement
Shared values and vision
A clear sense of purpose
Says what business your are in and scope of operations
Identify competitive advantage
Identify expectations of stakeholders
Identify industry and or market

11. The Strategic Planning Process - Planning
Long-range Plan
Strategic critical to the firms’ survival from generation to generation
include succession plan, plan to go public, hiring professional management, diversifying or going international

12. The Strategic Planning Process - Planning
Medium-range Plan
business direction for next 2 to 4 years
include targets critical to the firm’s survival
report on operational plan and performance, quarterly / half-yearly reporting

13. The Strategic Planning Process - Planning
Operational Plan
business direction for next 3-,6-, 12- months,
financial projections, production schedules, inventory schedules, sales forecast, profit margin forecast.
Monthly reporting

14. Strategic Planning in the Family Firm
Early - intuitive
longer phase than non-family firms
Later - more formal, systematic
often at successor generation stage
or at professional management stage

15. The Strategic Planning - The Intuitive Process
Planning process is informal and intuitive and is based in gut feel
CEO/ Founders with keen sense of judgement and wisdom and vision.
Companies facing emerges often blend the intuitive behavior with strategic planning

16. The Strategic Planning Process - Forecasting
Small Firms may use inexpensive and make use of published economic and Industry trends
Large forms may use elaborate statistical models or computerized applications (Decision Support Systems)

17. The Strategic Planning Process - Formulating the Family Business

18. Strategic Management & Strategic Planning
Processes that have content benefits and process benefits
Strategies specified to guide operational decision, actions of firm
Process is vehicle for communication, value transfer, leadership development

19. Class Schedule - Following week (04/05)
FINANCIAL ISSUES FOR THE BUSINESS AND FAMILY
Reading: Chapter 9 Going Public, FBM
Questions:
6, 42-51, 79, FBAB
Cases:
Tender Touch Car Wash Ltd., p. 465 FBM