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MGT 4550 - Family Business Management

MGT 4550 - Family Business Management. STRATEGIC MANAGEMENT OF THE FAMILY BUSINESS Chapter 10 Family Business Management, Concepts and Practice By A. Bakr Ibrahim & Willard H. Ellis. Instructor: Dr. Irene Duhaime. Class Schedule - Week 10 (03/29).

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MGT 4550 - Family Business Management

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  1. MGT 4550 - Family Business Management STRATEGIC MANAGEMENT OF THE FAMILY BUSINESS Chapter 10 Family Business Management, Concepts and Practice By A. Bakr Ibrahim & Willard H. Ellis Instructor: Dr. Irene Duhaime

  2. Class Schedule - Week 10 (03/29) • STRATEGIC MANAGEMENT OF THE FAMILY BUSINESS • Reading: Chapter 10 FBM • Questions • 1, 2, 38-41, 68, 69, 71, 72 FBAB

  3. Question 69 Strategic Planning, mission statements, business plans, how should these concepts apply to a family business?

  4. Question 1 How well is your business doing in your industry and in the context of the current economy?

  5. Strategic Management of the Family Business • Planning: systematic evaluation of firm’s mission, objectives, strategy against its capabilities/resources and the environment • process, not document • continuous and periodic scheduled • both direction setting and activity guiding • process has content & behavioral outputs

  6. Why Plan ? • To anticipate and respond to the dynamic, turbulent and unpredictable environment • To allow assessment of the past, present and the future • To guide the firm through strategic changes

  7. Question 2 What is the best way to develop a long term strategy, including developing a framework to continue the business over the long haul?

  8. Strategic Planning • Long term strategic planning • Operational planning • Budgeting

  9. The Strategic Planning Process

  10. The Strategic Planning Process - Mission Statement • Shared values and vision • A clear sense of purpose • Says what business your are in and scope of operations • Identify competitive advantage • Identify expectations of stakeholders • Identify industry and or market

  11. The Strategic Planning Process -Planning • Long-range Plan • Strategic critical to the firms’ survival from generation to generation • include succession plan, plan to go public, hiring professional management, diversifying or going international

  12. The Strategic Planning Process -Planning • Medium-range Plan • business direction for next 2 to 4 years • include targets critical to the firm’s survival • report on operational plan and performance, quarterly / half-yearly reporting

  13. The Strategic Planning Process -Planning • Operational Plan • business direction for next 3-,6-, 12- months, • financial projections, production schedules, inventory schedules, sales forecast, profit margin forecast. • Monthly reporting

  14. Strategic Planning in the Family Firm • Early - intuitive • longer phase than non-family firms • Later - more formal, systematic • often at successor generation stage • or at professional management stage

  15. The Strategic Planning - The Intuitive Process • Planning process is informal and intuitive and is based in gut feel • CEO/ Founders with keen sense of judgement and wisdom and vision. • Companies facing emerges often blend the intuitive behavior with strategic planning

  16. The Strategic Planning Process -Forecasting • Small Firms may use inexpensive and make use of published economic and Industry trends • Large forms may use elaborate statistical models or computerized applications (Decision Support Systems)

  17. The Strategic Planning Process -Formulating the Family Business

  18. Strategic Management & Strategic Planning • Processes that have content benefits and process benefits • Strategies specified to guide operational decision, actions of firm • Process is vehicle for communication, value transfer, leadership development

  19. Class Schedule - Following week (04/05) • FINANCIAL ISSUES FOR THE BUSINESS AND FAMILY • Reading: Chapter 9 Going Public, FBM • Questions: • 6, 42-51, 79, 97-100 FBAB • Cases: • Tender Touch Car Wash Ltd., p. 465FBM

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