Inevitable reality for family businesses: institutionalization

Inevitable reality for family businesses: institutionalization

When we look at the largest companies in the world, we see that most of them once started as a small family business. However, only institutionalizing those who were able to survive during the generations. So, why is institutionalization so important? Is institutionalization for a family business just an option or an inevitable necessity? Here are the thought -provoking facts…

Future from the 1st Family: Sustainability of the enterprise

Family businesses usually stand by the great efforts of the first generation founders. Unfortunately, statistics show that only 30 %of family businesses can reach the second generation and 12 %to the third generation. At this point, institutionalization plays a critical role in terms of not being limited to the life of the family and moving it to the future with a professional structure.

2. Transition from emotional decisions to professional management approach

Decisions in family businesses are usually taken with emotional ties, sudden reactions or based on individual experiences. However, this understanding of administration is not sustainable in the growing and complex business world. Institutionalization makes it possible to make healthier and sustainable decisions by providing an open organizational structure, transfer of authority and accountability within the company.

3. Minimizing conflicts within the family

The relationships between family members can sometimes be challenging when they move to business. Disputes between brothers, cousins ​​or children may risk the future of the company. Institutionalization process; Thanks to systems such as the Board of Directors, Family Constitution and Professional Executive Appointments, it prevents these conflicts and ensures the regular operation of the company.

4. To offer a safe future for employees

The future is always uncertain for employees in non -institutionalized companies. The management approach, which varies in line with the decisions of the boss or family, may reduce the motivation and commitment of employees. However, with the institutionalization, a career plan within the company, professional development opportunities and a fair management approach can be increased by creating an understanding of employee.

5. Increasing investment and growth opportunities

In today's world, big investors and business partners do not like uncertainties. Companies that do not have a corporate structure are seen risky for investors and may miss great business opportunities. However, a transparent understanding of management, corporate identity and a sustainable growth strategy enable the company to be attractive for both investors and major business partners.

Conclusion: Institutionalization is not luxury, but a necessity

Some family companies can see institutionalization as a process that will cause a bureaucracy burden or the company to lose its soul. But the truth is that without institutionalization, a company's long -term success is not possible.

Today, when we look at rooted family businesses, we see that they survive thanks to their solid management mechanisms, net rules and professional management approach. It's time to step on the journey of institutionalization today for your family company to live throughout generations!

Are you ready to take a step to bring your company to the future?

 

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