Question

What happens in a business where family needs take precedence in decision making?

a. The original family mission stays at the center of the business, which can be positive or negative depending on the effectiveness of the original strategy.
b. Nonfamily managers resent family members and shut them out of day-to-day processes where possible.
c. There is often nepotism, which not only promotes people who may be unfit for their positions, but also leads to the loss of qualified nonfamily managers.
d. There is an increased amount of continuity.

Answer 1

When family needs are the focus in business decision-making, it can affirm the original family mission or lead to nepotism, which may result in the loss of qualified staff and create tension within the firm, especially after a merger or acquisition.

Step-by-step explanation:

In a business where family needs take precedence in decision-making, several outcomes can occur. One potential outcome is that the original family mission remains integral to the business's operation. This can be beneficial if the mission and strategy are sound but detrimental if they are not.

Additionally, prioritizing family needs can lead to nepotism, which might promote less qualified family members to positions over potentially more qualified nonfamily employees. This practice can result in resentment from nonfamily managers and contribute to a loss of qualified talent. Furthermore, in companies that have undergone a merger or acquisition, tension may arise when balancing the legacy identity and strategy of the original family business with the new merged entity's goals.