Family Business – Emotional Influences and Consequences on Decision Making in Family Business – Raju Swamy – September 17, 2015
- Positive Emotional behaviour and expression are present as a natural consequence of sustained growth and success in any ownership model, primarily because when success exceeds failure it is affordable, and adds to the feel-good ambience within the organization. However, a recession can change everything overnight, particularly in ‘professionally owned’ organizations.
- In a Family Business, particularly if facing stagnation and personal financial pressures, coupled with questions of establishing ‘ownership’ for poor business performance, emotions become strategic…the quality of emotions ranging from defensive to aggressive to blackmail…..
- Something that has surprised me no end is the emotional blackmail strategy used by otherwise pioneering ‘Founders’ of the Family Business when it comes to ‘letting go’, even at a fair retirement age, when the third generation is ready to come in and they see the second generation looking helpless…….seeds of conflict and break-up are many times planted by the erstwhile Founders themselves because of their own insecurities….
- A ‘Founder’ of a large Family Business once confessed to me that his eldest son was absolutely fit and ready to take over the Family Business except that the ‘Founder’ was scared of what he would be reduced to once he handed over Power to his son….when he would become ‘Powerless’……Strangely, in many Family Businesses even today, fear of emotional eruptions prevent discussion and formulation of a ‘Retirement Policy’…..and consequently even ‘Succession Planning’ becomes an emotional issue to be avoided to prevent unpleasantness….
- Nepotism in Family Business is also driven by Emotional considerations…..Merit, and consequent business growth prospects, get sacrificed.
- Wherever Emotions dominate ownership and management decision making, knowledge, values, logic, commonsense, professionalism, speed, business motivation, and competitiveness are sacrificed to kill growth and, instead, promote business stagnation, conflict, and instability.
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