Preparing the next generation: An action research on setting family business governance structures

• Main Author: Santos, Lara Krystle L.
• Format: text
• Language: English
• Published: Animo Repository 2014
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/4779
• Institution: De La Salle University

Reports say that only 30 percent of family businesses are expected to survive the initial transition from the founders to the next generation, and that only 30 percent of those same businesses will survive the subsequent transition to the third generation. This proves that succession planning is very critical to the family businesses continuity and survival. Family business governance activities and structures are one of the tools that are regarded to have helped several family businesses in the past and pre-empt several problems that can arise in the future. Being part of a family business that has been operating for more than 20 years, this action research has helped my family address structural and strategic issues in our family business governance. The goal of the research is to prepare the next generation for leadership as it becomes a sibling partnership. The conceptual frameworks used were the developmental model of family business, succession in family businesses, family business governance structures such as the family constitution and organization development model of change and interventions on family businesses. The action research implemented the interventions on developing the family core values, vision and mission statements, forming the family council and family constitution of the Santos Family, creating the Organization Chart for the family business and formalizing the job descriptions. Feedbacks on the different activities were gathered in the action research primarily through interviews and group discussions. It was found that family business governance helps in the preparation of the heirs and raises awareness in the family members about succession planning. Trust, commitment and sharing the same vision for the company are also important factors that lead to successful transition from one generation to another.