The Challenges and Benefits of Non-family Management in Family Enterprises

Abstract

In succession planning, the senior shareholders have, for various reasons, a clear preference for a qualified sibling or a team of siblings. If there is no successor in the family who seems to be qualified to manage the company, the senior will not choose him or her for two very good reasons. The overriding priority of the owner is first to safeguard the sustainability of his own life achievement, the company. If the person’s own child does not seem to support this aim, he will—as a typical entrepreneur—look for an option that solves the problem. The second reason might be even more important. Managing a business is a responsibility with enormous stress potential which requires robust health and self-confidence based on competence. Being charged with such a responsibility without the necessary resources poses a risk to physical and mental well-being. Each father or mother will try to protect their offspring from such a risk.