FAMILY BUSINESS
Syllabus
Obiettivi Formativi
Molta attenzione è rivolta alla valutazione delle imprese familiari e alle loro opzioni di crescita al fine di fornire un percorso per analizzare come la proprietà, il management e il controllo familiare influenzino i loro risultati e come possa essere creato più valore e assicurato attraverso le generazioni.
CONOSCENZA E CAPACITÀ DI COMPRENSIONE: Alla fine del corso gli studenti conosceranno:
- Gli asset unici e le vulnerabilità delle imprese familiari;
- Il ruolo dell'Amministratore Delegato nella governance, nel management e nel trasferimento di potere;
- Le relazioni tra il ruolo del consiglio di amministrazione, del consiglio di famiglia e dei vertici aziendali manageriali nel fornire un contributo effettivo alla continuità dell'impresa;
- Le dinamiche chiave della famiglia;
- Quanto rilevante è per le famiglie gestire in modo professionale e collettivamente la ricchezza creata.
CAPACITÀ DI APPLICARE CONOSCENZA E COMPRENSIONE: Uno dei risultati attesi è il pieno coinvolgimento degli studenti nello svolgimento delle lezioni e, quindi, nel processo di apprendimento.
Guidati dall’'obiettivo di favorire l’'apprendimento dell’'intera classe (e non solo del singolo studente), è richiesto a tutti gli studenti:
1) di preparare i casi assegnati prima della lezione;
2) di preparare una presentazione PowerPoint di gruppo sui casi, basata sulla specifica assegnazione;
3) la lettura dei casi di studio assegnati prima di ogni lezione, così da consentire a ciascuno studente di partecipare ai lavori di gruppo e alle discussioni intraprese in aula.
AUTONOMIA DI GIUDIZIO: Alla fine del corso gli studenti saranno capaci di:
- Identificare i vari stakeholder e il ruolo della fiducia tra i membri della famiglia, nonché del loro impatto sulla successione e sulla continuità.
- Discutere le necessità di sviluppo e le sfide dei leader delle prossime generazioni.
- Analizzare l’effetto della tassazione delle proprietà sui trasferimenti proprietari tra le generazioni di proprietari dell’impresa familiare e le implicazioni delle strutture proprietarie sui vantaggi competitivi delle imprese familiari.
- Spiegare l’'importanza della pianificazione strategica per la continuità dell’'impresa familiare.
- Esplorare il ruolo critico e le sfide che i manager non familiari giocano nelle imprese familiari stesse.
- Analizzare l'’impatto della cultura familiare, delle comunicazioni familiari, dei conflitti familiari e dell'’unità familiare ed esplorare le loro interazioni con l’impresa familiare stessa.
- Valutare se desiderano cercare un percorso professionale nelle imprese familiari sia come manager chiave sia come consulenti professionali.
ABILITÀ COMUNICATIVE: Al fine di discutere efficacemente i casi, gli studenti dovranno:
• Fare riferimento a fatti e citazioni specifiche del caso.
• Essere pronti per fare commenti, porre domande o fare osservazioni.
Durante la discussione, gli studenti saranno chiamati a:
• Illustrare una breve presentazione in PowerPoint (max 10 slide, compresa la copertina)
• Prendere una posizione specifica su determinate questioni e/o punti.
• Porre domande chiarificatorie.
• Collaborare al fine di mantenere viva la discussione.
• Aiutare nel guidare e coinvolgere anche gli altri studenti nella discussione.
• Integrare la discussione con teorie, contenuti e concetti già visti in altri casi.
CAPACITÀ DI APPRENDIMENTO: Tramite la discussione dei casi in AULA ciascuno studente svilupperà:
1. La capacità di individuare i “"parametri” del problema (i concetti chiave del caso).
2. Una profonda conoscenza dell’oggetto del caso (comprensione del materiale, una buona risposta alle osservazioni degli altri colleghi).
3. La capacità di legare il tema principale discusso nel caso agli altri concetti studiati nel corso.
4. La capacità di coinvolgere altri colleghi nella discussione.
Learning Objectives
Much attention is paid to the assessment of family businesses and their growth options in order to provide a path to analyze how family ownership, management and control affect their outcomes and how more value can be created and secured across generations.
KNOWLEDGE AND UNDERSTANDING: At the end of the course the students will know:
- The unique assets and vulnerabilities of family businesses;
- The role of the CEO in governance, management and power transfer;
- The relationship between the role of the board of directors, family council and senior management in providing an effective contribution to the continuity of the business;
- The key dynamics of the family;
- How important it is for families to professionally and collectively manage the created wealth
APPLYING KNOWLEDGE AND UNDERSTANDING: One of the expected results is the full involvement of the students in the lectures of the course and, therefore, in the learning process.
Guided by the objective of encouraging the learning of the whole class (and not just of the individual student), it is required to all students:
1) to prepare the assigned cases before the lesson;
2) to prepare a group PowerPoint presentation on the cases, based on the specific assignment;
3) Reading the assigned case studies before each lesson, so that each student can participate in the group work and discussions undertaken in the classroom.
MAKING JUDGEMENTS: At the end of the course the students will be able to:
- Identify the various stakeholders and the role of trust between family members, as well as their impact on succession and continuity.
- Discuss the development needs and challenges of the leaders of the next generations.
- Analyse the effect of property taxation on ownership transfers between generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses.
- Explain the importance of strategic planning for the continuity of the family business.
- Explore the critical role and challenges that non-family managers play in family businesses themselves.
- Analyze the impact of family culture, family communications, family conflicts and family unity and explore their interactions with the family business itself.
- Assess whether they wish to seek a career path in family businesses both as key managers and as professional advisors.
COMMUNICATION SKILLS: In order to effectively discuss cases, students should:
- Refer to specific facts and quotes of the case.
- Be prepared to make comments, ask questions or make observations.
During the discussion, students will be asked to:
- Illustrate a short PowerPoint presentation (max 10 slides, including cover)
- Take a specific position on certain issues and/or points.
- Ask clarification questions.
- Collaborate in order to keep the discussion alive.
- Help guide and involve other students in the discussion.
- Integrate the discussion with theories, contents and concepts already seen in other cases.
LEARNING SKILLS: Through the discussion of cases in CLASS each student will develop:
1. The ability to identify the "parameters" of the problem (the key concepts of the case).
2. A deep knowledge of the subject of the case (understanding of the material, a good response to the observations of other colleagues).
3. The ability to link the main theme discussed in the case to the other concepts studied in the course.
4. The ability to involve other colleagues in the discussion.
Prerequisiti
Prerequisites
Programma
Sezione 1: Imprese familiari: aspetti peculiari e rilevanze (2 lezioni)
Sezione 2: Governance nell’impresa familiare (2 lezioni)
Sezione 3: Gestione strategica nell’impresa familiare (3 lezioni)
Sezione 4: Successione nell’impresa familiare (3 lezioni)
Sezione 5: Cambiamento e creazione di valore transgenerazionale (1 lezione)
Sezione 6: Rapporti interpersonali e conflitti nell'impresa familiare (2 lezioni)
Sezione 7: Gestione finanziaria nell’impresa familiare (2 lezioni)
Program
Section 1: Family firms: prevalence and relevance (2 lectures)
Section 2: Governance in the family firm (2 lectures)
Section 3: Strategic management in the family firm (3 lectures)
Section 4: Succession in the family firm (3 lectures)
Section 5: Change and transgenerational value creation (1 lecture)
Section 6: Interpersonal relationships and conflict in the family firm (2 lectures)
Section 7: Financial management in the family firm (2 lectures)
Testi Adottati
I lucidi delle lezioni e altri materiali saranno disponibili sul sito del corso.
Casi
Durante il corso saranno discussi 10 casi:
1. More than a move to Mexico (Capitolo 4: Zellweger, pagine: 43-45)
2. Beretti Holdings: More than a retirement decision (Capitolo 5: Zellweger, pagine: 109-112)
3. Henkel’s Genthin plant (Capitolo 6: Zellweger, pagine: 125)
4. Branding and CSR at HiPP (Capitolo 6: Zellweger, pagine: 165-166)
5. Managing paradoxes (Capitolo 6: Zellweger, pagine: 193-194)
6. Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Capitolo 7: Zellweger, pagine: 306-307)
7. Transgenerational value creation at Ahlstrom (Finland) (Capitolo 8: Zellweger, pagine: 361-363)
8. Conflict in the Solomon family (Capitolo 10: Zellweger, pagine: 488-491)
9. Tom’s world (Capitolo 9: Zellweger, pagine: 422-424)
10. Medco Energi Internasional
Books
Slides and other material will be available on the course website.
During the course, we will discuss 10 cases:
1. More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45)
2. Beretti Holdings: More than a retirement decision (Chapter 5: Zellweger, pages: 109-112)
3. Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125)
4. Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166)
5. Managing paradoxes (Chapter 6: Zellweger, pages: 193-194)
6. Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307)
7. Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363)
8. Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491)
9. Tom’s world (Chapter 9: Zellweger, pages: 422-424)
10. Medco Energi Internasional
Modalità di svolgimento
Al fine di facilitare l’'apprendimento e di fornire agli studenti uno sguardo sul mondo delle imprese familiari, infine, saranno organizzati momenti specifici di lavoro di gruppo per l’'analisi e soluzione di problematiche organizzative complesse.
Per raggiungere i suoi obiettivi il corso prevede letture, lezioni, esercizi, casi, compiti individuali ed in team e discussioni di classe. Le assegnazioni dei casi costituiscono una base importante per le discussioni di classe e devono essere completate prima di ogni sessione di classe.
Le lezioni saranno usate per evidenziare i punti chiave delle letture e per aggiungere ulteriori informazioni a supporto delle letture. I casi rappresentano un’opportunità per applicare quanto imparato ai problemi e agli scenari del mondo reale.
Teaching methods
To meet its goals, this course uses readings, lectures, exercises, cases, individual and team assignments, and class discussion. Case assignments provide an important foundation for class discussion and must completed prior to each class session.
Lectures will highlight key points from the readings and provide additional information to supplement the readings. Cases will provide the opportunity to apply what has been learned to real world issues and scenarios.
Regolamento Esame
1) Prova scritta. In questa prova, della durata di 3-4 ore, sarà assegnato un caso di studio con relative domande al fine di guidarne la discussione e alcune domande sul testo di riferimento. Per l'analisi del caso, conseguentemente, sarà richiesto agli studenti di rispondere alle domande utilizzando contenuti specifici e teorie studiate nel corso. Non sarà possibile ottenere punteggi per le risposte contenenti opinioni personali a meno che queste non siano supportate da teorie, studi o altro materiale di testo. È inoltre necessario descrivere "come" e "per quale ragione”" la teoria richiamata può essere applicata al caso oggetto di studio. Le risposte fornite saranno valutate sulla base sia della quantità, sia della qualità. Le risposte più complete e che dimostreranno un più alto livello di comprensione e di analisi riceveranno valutazioni più elevate.
Per le domande sul testo di riferimento, le domande possono essere aperte, chiuse (multiple choice) o una combinazione delle due. Le domande possono chiedere di discutere i modelli e le teorie presentate durante il corso. Possono essere anche presentati piccolo casi e focalizzare l’attenzione su alcuni aspetti teorici a questi collegati.
2) Prova Orale. Nella prova orale potrebbe essere chiesto allo studente sia di discutere alcuni piccoli casi pratici, sia di focalizzare l’attenzione su alcuni contenuti teorici.
Gli studenti frequentanti hanno inoltre la possibilità di partecipare al lavoro di gruppo. L’'biettivo del lavoro di gruppo è quello di dare al vostro team l’opportunità di applicare ciò che è stato appreso nel corso (attraverso lezioni, letture e discussione dei casi) ai problemi in una impresa familiare scelta da voi. Gli studenti frequentanti lavoreranno in gruppi di quattro (4) persone. Ai gruppi di lavoro frequentanti sarà permesso di ottenere un bonus da -3/+3 punti extra per il voto del primo esame dopo il corso. Saranno accettati per il lavoro di gruppo solo gli studenti frequentanti.
Exam Rules
In case of a written exam, the duration is about 3-4 hours and it includes:
a) Case discussion - It may be given a case study to which some questions may pertain in order to lead the discussion. As students respond to the questions, they should use specific content and theories (use names to identify theories and models) as the basis of their lecture, and/or text material. Also, students should describe how they see the content/theory applying to the situation. Answers will be evaluated based upon both quantity and quality. Answers that are more complete and demonstrate a higher level of understanding and analysis will receive more points.
b) Some questions directly connected to the course textbook – The questions could be open, closed (multiple choice), or a combination of the both. It may be asked to discuss the models and the theories presented during the course. It will be asked to interpret some real incidents and to focus your attention to some specific theoretical issues.
Also, regular attending students have the opportunity to partecipate at the Team Project. The purpose of the project is to give an opportunity to apply what has been learned in the course (through course lectures, readings, and case discussions) to problems in a family firm of your team's choice. Class members, regular attending students, will work in teams of four (4) people. To the Team Project regular attending students will be allowed to achieve a -3/+3 extra points to the final grade of the First Exam after the Course. Only regular attending students will be accepted for the Team Project.
Obiettivi Formativi
Molta attenzione è rivolta alla valutazione delle imprese familiari e alle loro opzioni di crescita al fine di fornire un percorso per analizzare come la proprietà, il management e il controllo familiare influenzino i loro risultati e come possa essere creato più valore e assicurato attraverso le generazioni.
CONOSCENZA E CAPACITÀ DI COMPRENSIONE: Alla fine del corso gli studenti conosceranno:
- Gli asset unici e le vulnerabilità delle imprese familiari;
- Il ruolo dell'Amministratore Delegato nella governance, nel management e nel trasferimento di potere;
- Le relazioni tra il ruolo del consiglio di amministrazione, del consiglio di famiglia e dei vertici aziendali manageriali nel fornire un contributo effettivo alla continuità dell'impresa;
- Le dinamiche chiave della famiglia;
- Quanto rilevante è per le famiglie gestire in modo professionale e collettivamente la ricchezza creata.
CAPACITÀ DI APPLICARE CONOSCENZA E COMPRENSIONE: Uno dei risultati attesi è il pieno coinvolgimento degli studenti nello svolgimento delle lezioni e, quindi, nel processo di apprendimento.
Guidati dall’'obiettivo di favorire l’'apprendimento dell’'intera classe (e non solo del singolo studente), è richiesto a tutti gli studenti:
1) di preparare i casi assegnati prima della lezione;
2) di preparare una presentazione PowerPoint di gruppo sui casi, basata sulla specifica assegnazione;
3) la lettura dei casi di studio assegnati prima di ogni lezione, così da consentire a ciascuno studente di partecipare ai lavori di gruppo e alle discussioni intraprese in aula.
AUTONOMIA DI GIUDIZIO: Alla fine del corso gli studenti saranno capaci di:
- Identificare i vari stakeholder e il ruolo della fiducia tra i membri della famiglia, nonché del loro impatto sulla successione e sulla continuità.
- Discutere le necessità di sviluppo e le sfide dei leader delle prossime generazioni.
- Analizzare l’effetto della tassazione delle proprietà sui trasferimenti proprietari tra le generazioni di proprietari dell’impresa familiare e le implicazioni delle strutture proprietarie sui vantaggi competitivi delle imprese familiari.
- Spiegare l’'importanza della pianificazione strategica per la continuità dell’'impresa familiare.
- Esplorare il ruolo critico e le sfide che i manager non familiari giocano nelle imprese familiari stesse.
- Analizzare l'’impatto della cultura familiare, delle comunicazioni familiari, dei conflitti familiari e dell'’unità familiare ed esplorare le loro interazioni con l’impresa familiare stessa.
- Valutare se desiderano cercare un percorso professionale nelle imprese familiari sia come manager chiave sia come consulenti professionali.
ABILITÀ COMUNICATIVE: Al fine di discutere efficacemente i casi, gli studenti dovranno:
• Fare riferimento a fatti e citazioni specifiche del caso.
• Essere pronti per fare commenti, porre domande o fare osservazioni.
Durante la discussione, gli studenti saranno chiamati a:
• Illustrare una breve presentazione in PowerPoint (max 10 slide, compresa la copertina)
• Prendere una posizione specifica su determinate questioni e/o punti.
• Porre domande chiarificatorie.
• Collaborare al fine di mantenere viva la discussione.
• Aiutare nel guidare e coinvolgere anche gli altri studenti nella discussione.
• Integrare la discussione con teorie, contenuti e concetti già visti in altri casi.
CAPACITÀ DI APPRENDIMENTO: Tramite la discussione dei casi in AULA ciascuno studente svilupperà:
1. La capacità di individuare i “"parametri” del problema (i concetti chiave del caso).
2. Una profonda conoscenza dell’oggetto del caso (comprensione del materiale, una buona risposta alle osservazioni degli altri colleghi).
3. La capacità di legare il tema principale discusso nel caso agli altri concetti studiati nel corso.
4. La capacità di coinvolgere altri colleghi nella discussione.
Learning Objectives
Much attention is paid to the assessment of family businesses and their growth options in order to provide a path to analyze how family ownership, management and control affect their outcomes and how more value can be created and secured across generations.
KNOWLEDGE AND UNDERSTANDING: At the end of the course the students will know:
- The unique assets and vulnerabilities of family businesses;
- The role of the CEO in governance, management and power transfer;
- The relationship between the role of the board of directors, family council and senior management in providing an effective contribution to the continuity of the business;
- The key dynamics of the family;
- How important it is for families to professionally and collectively manage the created wealth
APPLYING KNOWLEDGE AND UNDERSTANDING: One of the expected results is the full involvement of the students in the lectures of the course and, therefore, in the learning process.
Guided by the objective of encouraging the learning of the whole class (and not just of the individual student), it is required to all students:
1) to prepare the assigned cases before the lesson;
2) to prepare a group PowerPoint presentation on the cases, based on the specific assignment;
3) Reading the assigned case studies before each lesson, so that each student can participate in the group work and discussions undertaken in the classroom.
MAKING JUDGEMENTS: At the end of the course the students will be able to:
- Identify the various stakeholders and the role of trust between family members, as well as their impact on succession and continuity.
- Discuss the development needs and challenges of the leaders of the next generations.
- Analyse the effect of property taxation on ownership transfers between generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses.
- Explain the importance of strategic planning for the continuity of the family business.
- Explore the critical role and challenges that non-family managers play in family businesses themselves.
- Analyze the impact of family culture, family communications, family conflicts and family unity and explore their interactions with the family business itself.
- Assess whether they wish to seek a career path in family businesses both as key managers and as professional advisors.
COMMUNICATION SKILLS: In order to effectively discuss cases, students should:
- Refer to specific facts and quotes of the case.
- Be prepared to make comments, ask questions or make observations.
During the discussion, students will be asked to:
- Illustrate a short PowerPoint presentation (max 10 slides, including cover)
- Take a specific position on certain issues and/or points.
- Ask clarification questions.
- Collaborate in order to keep the discussion alive.
- Help guide and involve other students in the discussion.
- Integrate the discussion with theories, contents and concepts already seen in other cases.
LEARNING SKILLS: Through the discussion of cases in CLASS each student will develop:
1. The ability to identify the "parameters" of the problem (the key concepts of the case).
2. A deep knowledge of the subject of the case (understanding of the material, a good response to the observations of other colleagues).
3. The ability to link the main theme discussed in the case to the other concepts studied in the course.
4. The ability to involve other colleagues in the discussion.
Prerequisiti
Prerequisites
Programma
Sezione 1: Imprese familiari: aspetti peculiari e rilevanze (2 lezioni)
Sezione 2: Governance nell’impresa familiare (2 lezioni)
Sezione 3: Gestione strategica nell’impresa familiare (3 lezioni)
Sezione 4: Successione nell’impresa familiare (3 lezioni)
Sezione 5: Cambiamento e creazione di valore transgenerazionale (1 lezione)
Sezione 6: Rapporti interpersonali e conflitti nell'impresa familiare (2 lezioni)
Sezione 7: Gestione finanziaria nell’impresa familiare (2 lezioni)
Program
Section 1: Family firms: prevalence and relevance (2 lectures)
Section 2: Governance in the family firm (2 lectures)
Section 3: Strategic management in the family firm (3 lectures)
Section 4: Succession in the family firm (3 lectures)
Section 5: Change and transgenerational value creation (1 lecture)
Section 6: Interpersonal relationships and conflict in the family firm (2 lectures)
Section 7: Financial management in the family firm (2 lectures)
Testi Adottati
I lucidi delle lezioni e altri materiali saranno disponibili sul sito del corso.
Casi
Durante il corso saranno discussi 10 casi:
1. More than a move to Mexico (Capitolo 4: Zellweger, pagine: 43-45)
2. Beretti Holdings: More than a retirement decision (Capitolo 5: Zellweger, pagine: 109-112)
3. Henkel’s Genthin plant (Capitolo 6: Zellweger, pagine: 125)
4. Branding and CSR at HiPP (Capitolo 6: Zellweger, pagine: 165-166)
5. Managing paradoxes (Capitolo 6: Zellweger, pagine: 193-194)
6. Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Capitolo 7: Zellweger, pagine: 306-307)
7. Transgenerational value creation at Ahlstrom (Finland) (Capitolo 8: Zellweger, pagine: 361-363)
8. Conflict in the Solomon family (Capitolo 10: Zellweger, pagine: 488-491)
9. Tom’s world (Capitolo 9: Zellweger, pagine: 422-424)
10. Medco Energi Internasional
Books
Slides and other material will be available on the course website.
During the course, we will discuss 10 cases:
1. More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45)
2. Beretti Holdings: More than a retirement decision (Chapter 5: Zellweger, pages: 109-112)
3. Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125)
4. Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166)
5. Managing paradoxes (Chapter 6: Zellweger, pages: 193-194)
6. Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307)
7. Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363)
8. Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491)
9. Tom’s world (Chapter 9: Zellweger, pages: 422-424)
10. Medco Energi Internasional
Modalità di svolgimento
Al fine di facilitare l’'apprendimento e di fornire agli studenti uno sguardo sul mondo delle imprese familiari, infine, saranno organizzati momenti specifici di lavoro di gruppo per l’'analisi e soluzione di problematiche organizzative complesse.
Per raggiungere i suoi obiettivi il corso prevede letture, lezioni, esercizi, casi, compiti individuali ed in team e discussioni di classe. Le assegnazioni dei casi costituiscono una base importante per le discussioni di classe e devono essere completate prima di ogni sessione di classe.
Le lezioni saranno usate per evidenziare i punti chiave delle letture e per aggiungere ulteriori informazioni a supporto delle letture. I casi rappresentano un’opportunità per applicare quanto imparato ai problemi e agli scenari del mondo reale.
Teaching methods
To meet its goals, this course uses readings, lectures, exercises, cases, individual and team assignments, and class discussion. Case assignments provide an important foundation for class discussion and must completed prior to each class session.
Lectures will highlight key points from the readings and provide additional information to supplement the readings. Cases will provide the opportunity to apply what has been learned to real world issues and scenarios.
Regolamento Esame
1) Prova scritta. In questa prova, della durata di 3-4 ore, sarà assegnato un caso di studio con relative domande al fine di guidarne la discussione e alcune domande sul testo di riferimento. Per l'analisi del caso, conseguentemente, sarà richiesto agli studenti di rispondere alle domande utilizzando contenuti specifici e teorie studiate nel corso. Non sarà possibile ottenere punteggi per le risposte contenenti opinioni personali a meno che queste non siano supportate da teorie, studi o altro materiale di testo. È inoltre necessario descrivere "come" e "per quale ragione”" la teoria richiamata può essere applicata al caso oggetto di studio. Le risposte fornite saranno valutate sulla base sia della quantità, sia della qualità. Le risposte più complete e che dimostreranno un più alto livello di comprensione e di analisi riceveranno valutazioni più elevate.
Per le domande sul testo di riferimento, le domande possono essere aperte, chiuse (multiple choice) o una combinazione delle due. Le domande possono chiedere di discutere i modelli e le teorie presentate durante il corso. Possono essere anche presentati piccolo casi e focalizzare l’attenzione su alcuni aspetti teorici a questi collegati.
2) Prova Orale. Nella prova orale potrebbe essere chiesto allo studente sia di discutere alcuni piccoli casi pratici, sia di focalizzare l’attenzione su alcuni contenuti teorici.
Gli studenti frequentanti hanno inoltre la possibilità di partecipare al lavoro di gruppo. L’'biettivo del lavoro di gruppo è quello di dare al vostro team l’opportunità di applicare ciò che è stato appreso nel corso (attraverso lezioni, letture e discussione dei casi) ai problemi in una impresa familiare scelta da voi. Gli studenti frequentanti lavoreranno in gruppi di quattro (4) persone. Ai gruppi di lavoro frequentanti sarà permesso di ottenere un bonus da -3/+3 punti extra per il voto del primo esame dopo il corso. Saranno accettati per il lavoro di gruppo solo gli studenti frequentanti.
Exam Rules
In case of a written exam, the duration is about 3-4 hours and it includes:
a) Case discussion - It may be given a case study to which some questions may pertain in order to lead the discussion. As students respond to the questions, they should use specific content and theories (use names to identify theories and models) as the basis of their lecture, and/or text material. Also, students should describe how they see the content/theory applying to the situation. Answers will be evaluated based upon both quantity and quality. Answers that are more complete and demonstrate a higher level of understanding and analysis will receive more points.
b) Some questions directly connected to the course textbook – The questions could be open, closed (multiple choice), or a combination of the both. It may be asked to discuss the models and the theories presented during the course. It will be asked to interpret some real incidents and to focus your attention to some specific theoretical issues.
Also, regular attending students have the opportunity to partecipate at the Team Project. The purpose of the project is to give an opportunity to apply what has been learned in the course (through course lectures, readings, and case discussions) to problems in a family firm of your team's choice. Class members, regular attending students, will work in teams of four (4) people. To the Team Project regular attending students will be allowed to achieve a -3/+3 extra points to the final grade of the First Exam after the Course. Only regular attending students will be accepted for the Team Project.
Updated A.Y. 2021-2022
FAMILY BUSINESS
(Prof. Luca Gnan)
Teaching Staff responsible for the course:
Prof. Luca Gnan
E-mail: luca.gnan@uniroma2.it
Availability: Contact via e-mail
Prof.ssa Giulia Flamini
E-mail: giulia.flamini@uniroma2.it
Availability: Contact via e-mail
We are committed to making this course a valuable learning experience for you. After the first month, we will spend part of a class session evaluating our progress, and we will make any necessary changes to keep us on track. However, we welcome your feedback at any time in the semester. It is easiest to reach us by e-mail or during office hours, but we are always happy to set up an appointment. Additionally, if you have a disability that requires unique accommodation, please let us know ASAP so that we can be helpful to you.
E-mails, Office Hours & Feedback on Assignments
We endeavor to answer e-mails within one day. If you have not heard from us within that time, please resend the e-mail. Grades & comments will be posted online in the materials section of the course website. We will be happy to give feedback and discuss assignments after all grading is complete for a specific task. Office hours are scheduled by e-mail request.
We may answer questions of assignment clarification in class and via e-mails to benefit the entire class. We may also give extra grades (see below Team Project) during the course that, while generally designed to support learning in the course, will also help your participation grade. These are pass/fail and do not include comments.
Pre-requisites for the Course:
None
Course Description and Learning Objectives
Family businesses show distinct core competencies that can result in unique competitive advantages. They take a long-run view of the business—across generations, rather than publicly traded quarterly reports. Their capital can be very patient. Owners will sacrifice their salaries to make payroll. They are an integral part of their communities, unlike publicly traded counterparts that might abandon a community at the blink of a budget. They can engender a great deal of loyalty on the part of employees, and the existence of family may reduce agency problems.
Family Businesses also face challenges that threaten their continuity. The challenges are primarily the result of issues presented by the interaction of family, management, and ownership—particularly where the family wishes to perpetuate its influence and/or control from generation to generation. Family firms seem to be as agile in one generation as they are fragile across generations.
Family businesses start with an owner-managed first generation (usually an entrepreneur). The next generation—G2—is the sibling generation, and G3 is the cousin era. The probability of passing the company to the next generation diminishes significantly, with fewer than half making it to G2 and only about less than 15% making it to G3. So, despite the benefits of family, there can be some significant issues.
The course explores and analyzes the continuity challenges of a family business and its best management practices. This course focuses on pragmatic, action-oriented management, governance, finance, and family/business leadership skills.
Attention is devoted to evaluating family firms and their growth options to provide a roadmap for analyzing how family ownership, control, and management affect performances and how family firms can create and ensure more value through generations.
The course presents seven different sections:
· SECTION 1: Family firms: prevalence and relevance
· SECTION 2: Governance in the family firm
· SECTION 3: Strategic management in the family firm
· SECTION 4: Succession in the family firm
· SECTION 5: Change and transgenerational value creation
· SECTION 6: Interpersonal relationships and conflict in the family firm
· SECTION 7: Financial management in the family firm
The course addresses the governance, management, and finance of established family businesses. It examines succession, values, life cycles, business and marketing strategies, conflict resolution, communications, legal, and financial aspects, estate planning, management, philanthropy, and other topics that uniquely touch family business governance, management, and finance. It will convey the characteristics that differentiate family businesses from other businesses.
One of the features, which make this course unique and particularly modern, is a part of Section 7: Financial management in the family firm dedicated to the mysterious and fascinating world of the family office. This is the little-known but key professional practice of advising entire families-in-business, frequently large, diversified, and with wide ramifications, about the complete spectrum of activities necessary to ensure that wealth is created, preserved, transmitted, and spread across the enlarged family community. These services range from asset allocation to risk management, education, efficient tax structuring, corporate finance, corporate governance, intra-, and inter-generational transmission, philanthropy, etc. Given the enormous amount of wealth and power concerned, this phenomenon is increasingly important and starts to attract some focus, particularly on the best graduate students and professional talents.
Upon completion of this course, students should understand:
- The unique assets and vulnerabilities of family enterprises.
- The role of the CEO in governance, management, and the transfer of power.
- The relationship between the role of the board, the family council, and top management in providing effective governance for family business continuity.
- Key family dynamics.
- The relevance for families to manage collectively wealth created in professional ways,
and be able to:
- Identify the various stakeholders and the role of trust among family members and their impact on succession and continuity.
- Discuss the developmental needs and challenges of next-generation leaders.
- Analyze the effect of estate taxes on ownership transfer across generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses.
- Explain the importance of strategic planning to family business continuity.
- Explore the critical role and challenges that nonfamily managers play in family-owned operations.
- Analyze the impact of family culture, communication, conflict, and unity and explore their interaction effects on the family business.
- Assess whether they want to seek employment in family businesses as key employees/managers or in a professional advisory role.
Teaching methods
Lessons will be characterized by the transfer of knowledge and the strong interaction within the classroom; there are analyses of situations, problems, and business cases to facilitate participants in learning.
Regular attending students are strongly recommended to participate in all the lectures, preparations, and presentations of the business cases.
This course uses readings, lectures, exercises, cases, individual and team assignments, and class discussions to meet its goals. Case assignments provide an important foundation for class discussion and must be completed before each class session. The due dates for all cases and other assignments are listed in the class schedule at the end of the syllabus. Lectures will highlight key points from the readings and provide additional information to supplement the readings. Cases will allow you to apply what you have learned to real-world issues and scenarios. Because each of you brings unique perspectives and experiences to the class, participation in class discussions and activities is essential to your learning and that of other class members. To further enrich your learning, you will also be matched with an MScBA Teaching Assistant.
Textbook
Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709
Cases
During the course, we will discuss 10 cases:
1. More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45)
2. Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112)
3. Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125)
4. Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166)
5. Managing paradoxes (Chapter 6: Zellweger, pages: 193-194)
6. Bernet's choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307)
7. Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363)
8. Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491)
9. Tom's world (Chapter 9: Zellweger, pages: 422-424)
(the following case from Harvard Business School Publishing. You need to register to download the cases at the following link: https://hbr.org, then download the case at the indicated link)
10. Medco Energi Internasional
Additional References
- Poza, E. J., "Family Business", First Edition. Mason, OH: Thomson South-Western, 2004.
- Gnan, L. and Montemerlo, D., (2006), "Family-firm relationship in Italian SMEs: ownership and governance issues in a double-fold theoretical perspective", in P. Z. Poutziouris P., Smyrnios, K. X., and Klein, S. B., "Handbook of research on family business", Edward Elgar Publishing.
- Zattoni, A., Gnan, L., Huse, M., (2012) , "Does Family Involvement Influence Firm Performance? Exploring the Mediating Effects of Board Processes and Tasks", Journal Of Management, ISSN: 0149-2063, DOI: 10.1177/0149206312463936
- Gnan, L. and Songini, L., (2015), "Family involvement and agency cost control mechanisms in family small and medium-sized enterprises", Journal Of Small Business Management, vol. 53, p. 748-779, ISSN: 0047-2778, DOI: 10.1111/jsbm.12085
- Gnan, L., Montemerlo, D., Huse, M. (2015), "Governance systems in family SMEs: the substitution effects between family councils and corporate governance mechanisms", Journal of Small Business Management, p. 1-27, ISSN: 1540-627X, DOI: 10.1111/jsbm.12070
- Gnan, L., Montemerlo, D., Schulze, W., Corbetta, G., (2008), “Governance Structures in Italian Family SMEs” In: (a cura di): Comacchio A. and Pontiggia A., “L'organizzazione fa la differenza”, Roma: Carocci Editore, ISBN: 9788843045587
- Gnan, L. and Montemerlo, D., (2007), "Family-firm relationship in Italian SMEs: ownership and governance issues in a double-fold theoretical perspective" In: "Handbook of research on family business", Elgar, ISBN: 978-1845424107
- Songini, L., Gnan, L., Morelli, C., Vola, P., (2015), "The why and how of managerialization of family businesses: evidences from Italy", Piccola Impresa / Small Business, vol 1, DOI: 10.14596/pisb.179, pp 85-117
- Songini, L., Gnan, L., Malmi, T (2013), "The role and impact of accounting in family business", Journal of Family Business Strategy, vol. 4, p. 71-83, ISSN: 1877-8585, DOI: 10.1016/j.jfbs.2013.04.002
- Gnan, L., Songini, L., (2014), "The glass ceiling in SMEs and its impact on firm managerialisation: a comparison between family and nonfamily SMEs", International Journal of Business Governance And Ethics, vol. 9, ISSN: 1477-9048
- de Pedys, V. and Antonelli, A,. (2008) "Family office for family business", Oxford management Publishing, ISBN 978-1-906728-01-4
- Poutziouris, P., (2001) "Understanding family firms", in (Ed.) Adam, J., Institute of Directors, "The Growing Business Handbook", London: Kogan Page, Chapter 6.3: pp. 9-15, 4th edition, ISBN 074943600X
- Levin, R. and Travis, V., (1987), "Small company finance: what the books don't say", Harvard Business Review, nov-dec: 87608
- Villalonga, B. and Amit, R., (2005), "How do family ownership, control and management affect firm value", Journal of financial economics, 80: 385-417
- Wilson, R., (2013), "The family office Report", FamilyOfficesGroup.com
- Amit, R. and Perl, R., (2012) "2012 Family Governance Report", Wharton Global family Alliance, Wharton School, University of Pennsylvania
- Amit, R. and Lichtenstein, H., (2010), "Benchmarking the Single Family Office" Wharton Global Family Alliance, Wharton School, University of Pennsylvania
Suggested videos
1. Introductory video: 4 Lessons from the Best Family Businesses
https://hbr.org/video/4660653966001/4-lessons-from-the-best-family-businesses
2. Three circle model: importance of governance, setting goals, holistic leadership and caring for the interests of the family
https://www.youtube.com/watch?v=D85pqiL1tNM
3. The unique strengths and weaknesses of family businesses today, contrasting it with the humble mom-and-pop store the term usually brings to mind
https://www.youtube.com/watch?v=suL-HkP-2Ts
4. The topic of Building a Family Business That Lasts and provides viewers with four key points to walk away with
https://www.youtube.com/watch?v=vZ52w3wBP1U
5. The key attention points and delicacies involved in preparing and transferring a business to the next generation
https://www.youtube.com/watch?v=Io9aWtuSEh4
6. Family Business Governance: Family Constitution
https://www.youtube.com/watch?v=i5psd_84euA
7. Family-owned companies need to be run with emotional, as well as professional leadership
https://www.youtube.com/watch?v=2bYo2Ph48_E
8. Toward a theory of how some family firms nurture transgenerational entrepreneurship
https://www.youtube.com/watch?v=AzFginXvSrM
9. Family Business Longevity
https://www.youtube.com/watch?v=uoHRNLuoYHM
10. 5 Ways For Private Equity Firms to Raise Capital From Family Offices
https://www.youtube.com/watch?v=EX8TnQmOFyc
11. Address the challenges faced by family businesses
https://www.youtube.com/watch?v=mItel08kE-Q
12. Conflict in the Family Business
https://www.youtube.com/watch?v=CVILBwkMVxc
13. Stories of Wasteful Conflict in Family Businesses
https://www.youtube.com/watch?v=elzfKRYw1yA
Case Discussions
Regular attending students are expected to be fully engaged in the entire learning process. Regular attending students are expected to:
1) prepare the assigned readings of the cases before each class.
2) prepare as a group work a PowerPoint presentation on the case, based on the specific assignment.
3) come to class ready to participate and discuss to enhance the individual's learning and the class.
On the website of the course, students find for each case the relative assignment. Please carefully read the questions before the session and use them for preparing the PowerPoint presentation.
Each student will be involved in the class discussion on the cases and tie the assigned reading for the session. The objective is to bring all class members into the debate. The cases are designed to integrate the concepts from the case into the context of the course. The preparation and the discussion of the cases do not exclude the study of the theoretical concepts useful for the discussion of the cases themselves and the passing of the course exam.
With the cases' discussions in the CLASSROOM, each student will develop:
1. The ability to set the parameters for the problem (key concepts from the case).
2. A depth of knowledge about the case subject (understanding of material, excellent response to the observations of others).
3. The ability to tie in the case with other course concepts.
4. The ability to get others involved in the discussion.
To adequately discuss the cases, students do:
· Be prepared with facts and specific quotes from the case.
· Be prepared to comment, ask a question, or develop ideas about the case.
During the discussion, students do:
· Take a position on a question or a point.
- Ask clarifying questions.
· Help keep the discussion moving and on track.
· Help draw others into the discussion.
· Integrate theories and content from other cases.
During the discussion, students do not:
· Be unprepared and show your lack of knowledge.
- Monopolize the discussion.
- Make irrelevant comments.
· Be insensitive to other's desire to speak or to their opinions.
All the regular attending students are kindly invited to build up workgroups (MINIMUM 3 PERSONS – MAXIMUM 5 PERSONS). Each workgroup should prepare a PowerPoint presentation for each case. Into the first slide, the names of the students belonging to the group should be reported.
The structure of the presentation should follow the following outline:
- One or more introductory slides aimed at describing/reporting the story, the characters, and all the necessary elements to define the context and boundaries of the case clearly.
- One slide mentioning the questions of the assignment and underlining the learning goals of the case.
- One or more slides reporting the answers to each question of the assignment.
- One or more slides reporting the final remarks on the case.
- One closing slide about the lessons learned after the group discussion of the case.
How to prepare the PowerPoint presentation of the case?
Introduction – short presentation of the case, brief description of the problems and situations that should be coped with the discussion.
Diagnosis – Problem setting of the context and the situation. Description of the mains facts and elements connected with the concepts and models of Family Business. What went wrong, and which actions/situations, instead, were right? Which elements could be considered for the diagnosis?
Solution – Students should provide a possible answer to questions/problems related to the case and a possible and clear indication of how to approach the situation and how to solve it. The entire proposal should represent a consistent action plan in terms of behaviors and expected results.
Conclusions – Conclusions should not be longer than 300-500 words and should describe how the situation and the problem characterized the case, how Family Business schemata might help solve the case, and what the proposed solution might generate in terms of organizational consequences.
Lessons learned – At the end of the presentation elements/suggestions/advice that we "take-home" from the case discussion should be identified and reported.
NOTE: During the case discussion, students should explicitly address the context and the different situations with concepts related to Family Business and with models and theories of this course.
Case Discussions' Class Participation
The best way to learn, especially about FB, is to participate in your education actively. In this class, "participation" is defined as quality contributions to class discussion and exercises. There are four pre-requisites for successful participation:
- Be here on time and prepared. If you are not here, you cannot contribute much to class discussion. If you need to miss class for a predictable reason (e.g., job interview, athletic competition), please notify us at least 24 hours in advance so that we can make arrangements for any in-class exercises and so that you can obtain the materials distributed during the class. Of course, we realize that in some cases, unforeseeable emergencies arise. Although we will not directly penalize you for non-attendance, be aware that multiple absences will indirectly hurt you by preventing you from participating in class, thereby lowering your participation grade. To contribute to class discussion, you must come to class having carefully prepared all assignments (i.e., readings, cases, exercises).
- Be brave. Everyone in this class is smart, engaging, and has unique life experiences to share. You will get the most out of this course if you ask questions, voice opinions, and express your thoughts to one another. If you feel uncomfortable talking in class, please send me an e-mail or set up an appointment to talk with me early in the semester. We will do everything we can to accommodate your circumstances, but we can only do so if they are brought to our attention.
- Be courteous. Successful participation includes treating your classmates respectfully and professionally. Listen carefully to the comments and questions that your classmates voice. You may learn something new from their perspectives, and you will be able to avoid merely repeating something that another classmate has said earlier in the discussion. Also, it is perfectly acceptable for you to voice disagreement with an opinion provided by another student. The open debate often leads to the most thoughtful and informative class discussions. However, please express your argument in a kind and considerate manner.
- Be engaged. This class is "unplugged." Once class starts, all electronics (e.g., computers, cell phones, tablets, etc.) should be turned off and put away. If you need to use a device because of a language or disability issue, you need to secure permission at the beginning of the class. The misuse of an electronic device (e.g., surfing the web or texting) will adversely affect your grade.
To facilitate the visioning of its PowerPoint presentation in the classroom, each workgroup should take a personal computer with PowerPoint installed and an available VGA connection.
By 8 pm of the day before the case discussion, all regular attending students should send to the Course's Instructors, attaching the case presentation prepared. ONLY STUDENTS WHO HAD HANDED OVER ALL THE CASE PRESENTATIONS WILL BE ADMITTED TO THE 1st EXAM AFTER THE COURSE.
Policy for Late Assignments
As in the business world, work must be received on time to receive full credit. If you are late on an assignment, your access to the 1st exam after the course will be compromised. You are always welcome to hand in an assignment before its due date if you know that you will be busy as the due date approaches. If you think that you will not complete an assignment by the stated due date, please speak with us in advance to make alternative arrangements. Our policy on late assignments will depend on the specific circumstances surrounding the problem and thus may differ from student to student. Providing advance notice about a late assignment will minimize the penalty you receive on that assignment but does not guarantee that there will be no penalty for turning the assignment in late.
Other learning sources
Slides and other materials will be available on the course website.
THE SLIDES DO NOT REPRESENT A SUPPORT FOR AN EFFECTIVE AND SUCCESSFUL PREPARATION FOR THE EXAM OF THE COURSE. THEY REPRESENT ONLY A HELP TO FACILITATE THE TRANSFER OF THE KNOWLEDGE TO STUDENTS DURING THE LECTURES.
Attendance
Because of the concentrated nature of the MScBA program, attendance in class is crucial.
Not regular attending students will be required to prepare for the exam ALL the chapters of the textbook Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709 and ALL the cases discussed in the classroom.
NOTE: Attendance to the first class session is mandatory. Important information about the course and the instructor's expectations are given during the first session. If you know that you will have to be absent for one session, please contact your instructor to ensure that absence from a session is acceptable.
Exam
The 1st exam after the course is a written exam (the 1st), while all the other exams will be oral.
In the case of a written exam, the duration is about 3-4 hours, and it includes:
a) Case discussion - You may be given a case study to which some questions may pertain to lead the discussion. As you respond to the questions, please use specific content and theories (use names to identify theories and models) as the basis of your analysis. You will not receive credit for your personal opinions unless backed by theory, lecture, and/or text material. Also, describe how you see the content/theory applying to the situation. Your answers will be evaluated based upon both quantity and quality. Answers that are more complete and demonstrate a higher level of understanding and analysis will receive more points.
b) Some questions directly connected to the course textbook – The questions could be open, closed (multiple choice), or a combination of both. You may be asked to discuss the models and the theories presented during the course. You will be asked to interpret some real incidents and focus your attention on specific theoretical issues.
1st exam after the course participation and exam grades registering on the booklet
Only regular attending students that have delivered the hard copies of ALL the cases to the Instructors can take the 1st exam after the course with a format explicitly dedicated to them.
Only regular registered students on the DELPHI System will be allowed to register their grades.
The 1st exam grades will be registered after the official exam date; Teachers will communicate that date. It is compulsory to come on that exam date to record the grade on the Delphi and the booklet.
Team Project
The purpose of the project is to allow your team to apply what has been learned in the course (through course lectures, readings, and case discussions) to problems in a family firm of your team's choice.
Class members, regular attending students, will work in teams of four (4) people.
To the Team Project, regular attending students will be allowed to achieve a -3/+3 extra points to the final grade of the 1st exam after the course. Only regular attending students taking the 1 st exam after the course will be accepted for the Team Project.
Your team should identify a family firm to study (Please, no student groups).
Your team is to gather information from people in the family firm through direct contact. You may supplement this information with data from the media, the organization's literature, and other secondary sources. You should identify a relatively recent problem to analyze (i.e., this should not be a historical account of a problem and the company's solution). You should focus your analysis by applying the concepts from the course. While it is acceptable to incorporate several concepts from the course, please aim for depth rather than breadth regarding course concepts. Your goal is to diagnose the mechanisms causing the problem or issue of concern in the organization. Initially, you may notice many symptoms (for instance, a crisis after the succession, seemingly an unhealthy family culture, low family members' commitment and involvement, governance issues, etc.), but your task is to get to the underlying reason for these symptoms. And beware, sometimes the initial symptoms we think we see are not what they appear to be.
There are three broad goals for this assignment:
1. One goal of this assignment is obviously to take the initiative to make a positive contribution to a family firm.
2. Another primary goal is to provide an opportunity for you to learn more about family businesses firsthand and use your critical thinking and reflection skills to link your experience with this family firm to your learning concerning family business theories.
3. The final goal is to provide a forum for you to hone your team member and leader skills and reflect on the learning gained from this team experience. Each team will make a presentation and write a paper that describes what you did for the family firm, what you learned about the family business, and what you learned about working on a team.
To meet these broad goals, your team should answer the following questions in the assignments detailed below.
a) What are the issues or problems facing the family firm?
b) What can Course concepts be applied to understand why this problem is occurring?
c) What recommendations can you offer to help improve the family business functioning?
Deliverables of the Team Project:
1. The project proposal is due to Instructors by the 9th session of the course by 5 pm. It should include:
a) the names of your group members
b) your team name
c) the name of the organization
d) the name, contact information, and level of your contact person
e) the method you will use to gain access to the organization
f) a brief description (one paragraph) of the problem facing the organization.
2. Your written project is due to Instructors by the 18th session of the course by 5 pm .
It should contain a maximum of 15 double-spaced pages (1 cm margins, 12 point font). You will be penalized significantly for exceeding this limit. The limit does not include appendices, which you are free to use to provide charts, figures, or other background material not necessary in the main body of your analysis. However, appendices that are not directly referenced in the main text will not be read. LATE PROJECT WRITE-UPS WILL NOT BE ACCEPTED.
This written project should summarize what you did for/within the organization, what you have learned about organizational behavior, and what you have learned about working on a team.
Grading of the Team Project:
Your group project will be evaluated on the following criteria:
a. Problem definition: How well (i.e., thoroughly and concisely) describe the organizational context, the relevant parties, and the factors that are important to the problem?
b. Accurate and thorough use of course concepts.
c. Integration of course concepts with information about the company and problem, i.e., how well do you integrate course concepts with details about the problem to illuminate the problem in a way that leads to solutions?
d. The extent to which recommendations are consistent with analysis.
e. Quality of written analysis.
Analytical Syllabus
|
# |
Agenda |
Lecture/ Case discussion |
Lecturer |
|
SECTION 1: Family firms: prevalence and relevance |
|||
|
1 |
Introduction of the Course (Chapter 1: Zellweger, pages: 1-3) 1. Thematic focus 2. Intended audience 3. Structure and pedagogical tools Defining the family business (Chapter 2: Zellweger, pages: 4-22) 1. The distinction between family and nonfamily firms 2. Defining family business by type of family involvement 3. Circle models of family influence 4. Family firm identity 5. Family business definition |
Lecture |
GNAN |
|
2 |
Prevalence and economic contribution of family firms around the globe (Chapter 3: Zellweger, pages: 24-33) 1. Prevalence of family firms worldwide 2. Economic contribution of family firms 3. Institutional setting and the prevalence of family firms Strengths and weaknesses of family firms (Chapter 4: Zellweger, pages: 36-42) 1. Typical strengths of family firms 2. Typical weaknesses of family firms 3. Bivalent attributes of family firm characteristics CASE STUDY: More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45) |
Lecture and Case |
GNAN |
|
SECTION 2: Governance in the family firm |
|||
|
3 |
Governance in the family firm: premises, corporate and ownership governance (Chapter 5: Zellweger, pages: 46-72) 1. Why do family firms need governance? 2. Typical governance constellations in family firms 3. Performance implications of governance constellations 4. Untangling corporate, ownership, family governance 5. Corporate governance 6. Ownership governance |
Lecture |
GNAN |
|
4 |
Governance in the family firm: family governance (Chapter 5: Zellweger, pages: 73-105) 1. Family governance 2. Governance documents: code of conduct and family charter 3. Governance bodies: family assembly and family council 4. Integrated governance in family firms CASE STUDY: Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112) |
Lecture and Case |
GNAN |
|
SECTION 3: Strategic management in the family firm |
|||
|
5 |
Strategic management in the family business: competitive advantages and the agency perspective (Chapter 6: Zellweger, pages: 116-134) 1. Strategic decision making in family firms 2. Conceptualizing the competitive advantage of family firms 3. The agency perspective CASE STUDY: Henkel's Genthin plant (Chapter 6: Zellweger, page: 125) |
Lecture and Case |
GNAN |
|
6 |
Strategic management in the family business: RBV and OI perspectives (Chapter 6: Zellweger, pages: 137-163) 1. The resource-based perspective 2. The organizational identity perspective CASE STUDY: Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166) |
Lecture and Case |
GNAN |
|
7 |
Strategic management in the family business: institutional and paradox perspectives (Chapter 6: Zellweger, pages: 167-194) 1. The institutional perspective 2. The paradox perspective 3. Generic strategies for family firms 4. Tools for strategic management in family firms CASE STUDY: Managing paradoxes (Chapter 6: Zellweger, pages: 193-194) |
Lecture and Case |
GNAN |
|
SECTION 4: Succession in the family firm |
|||
|
8 |
Succession in the family firm: goals and processual issues (Chapter 7: Zellweger, pages: 203-234) 1. Succession options 2. Opportunities and challenges of succession options 3. Significance of succession options 4. Declining relevance of infra-family succession 5. Sources of complexity in family business succession 6. Structuring the succession process: succession framework 7. Clarifying goals and priorities |
Lecture |
GNAN |
|
9 |
Succession in the family firm: change strategy and who is in charge of the change (Chapter 7: Zellweger, pages: 240-254) 1. Reviewing the firm's strategy 2. Planning the transition of responsibilities |
Lecture |
GNAN |
|
10 |
Succession in the family firm: value, finance, legal, and tax issues (Chapter 7: Zellweger, pages: 258-305) 1. Valuing the firm 2. Financing the succession 3. Defining the legal and tax setup CASE STUDY: Bernet's choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307) |
Lecture and Case |
GNAN |
|
SECTION 5: Change and transgenerational value creation |
|||
|
11 |
Change and transgenerational value creation (Chapter 8: Zellweger, pages: 311-356) 1. Change and adaptation in family firms 2. Longevity of family firms 3. Transgenerational value creation in family firms CASE STUDY: Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363) |
Lecture and Case |
GNAN |
|
SECTION 6: Interpersonal relationships and conflict in the family firm |
|||
|
12 |
Interpersonal relationships and conflict in the family firm: social issues, family values, and perceptions (Chapter 10: Zellweger, pages: 428-466) 1. The social structure of the family 2. Trends in the social structure of the family 3. International variance in family values 4. Understanding interpersonal dynamics in the family firm: a systemic view 5. Justice perceptions |
Lecture |
GNAN |
|
13 |
Interpersonal relationships and conflict in the family firm: managing conflicts (Chapter 10: Zellweger, pages: 468-487) 1. Why family firms are fertile contexts for conflict 2. Types of conflict 3. Conflict dynamics 4. Conflict-management styles 5. Communication strategies 6. How to behave in the face of conflict CASE STUDY: Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491) |
Lecture and Case |
GNAN |
|
SECTION 7: Financial management in the family firm |
|||
|
14 |
Financial management in the family firm: differences with no family firms (Chapter 9: Zellweger, pages: 368-379) 1. Why finance is different for family firms 2. Family equity as a distinct asset class 3. Performance of family firms: a short review of the evidence 4. Risk taking in family firms |
Lecture |
GNAN |
|
15 |
Financial management in the family firm: financial tools (Chapter 9: Zellweger, pages: 380-400) 1. Debt financing 2. Equity financing 3. Leverage 4. Value management 5. Key financial indicators 6. Dilemmas in the financial management of family firms |
Lecture |
GNAN |
|
16 |
Financial management in the family firm: financial sustainability (Chapter 9: Zellweger, pages: 402-407) 1. Principles for the sustainable financial management of family firms 2. The role of the CFO in family firms CASE STUDY: Tom's world (Chapter 9: Zellweger, pages: 422-424) |
Lecture and Case |
GNAN |
|
17 |
Financial management in the family firm: compensations (Chapter 9: Zellweger, pages: 407-411) 1. Management compensation in family firms CASE STUDY: Medco Energi Internasional (HBS 9-207-021) |
Lecture and Case |
GNAN |
|
18 |
Financial management in the family firm: family offices (Chapter 9: Zellweger, pages: 412-417 and Chapter 5: Zellweger, pages: 83-89) 1. The responsible shareholder in the family firm 2. Wealth governance |
Lecture |
GNAN |
Updated A.Y. 2021-2022
FAMILY BUSINESS
(Prof. Luca Gnan)
Teaching Staff responsible for the course:
Prof. Luca Gnan
E-mail: luca.gnan@uniroma2.it
Availability: Contact via e-mail
Prof.ssa Giulia Flamini
E-mail: giulia.flamini@uniroma2.it
Availability: Contact via e-mail
We are committed to making this course a valuable learning experience for you. After the first month, we will spend part of a class session evaluating our progress, and we will make any necessary changes to keep us on track. However, we welcome your feedback at any time in the semester. It is easiest to reach us by e-mail or during office hours, but we are always happy to set up an appointment. Additionally, if you have a disability that requires unique accommodation, please let us know ASAP so that we can be helpful to you.
E-mails, Office Hours & Feedback on Assignments
We endeavor to answer e-mails within one day. If you have not heard from us within that time, please resend the e-mail. Grades & comments will be posted online in the materials section of the course website. We will be happy to give feedback and discuss assignments after all grading is complete for a specific task. Office hours are scheduled by e-mail request.
We may answer questions of assignment clarification in class and via e-mails to benefit the entire class. We may also give extra grades (see below Team Project) during the course that, while generally designed to support learning in the course, will also help your participation grade. These are pass/fail and do not include comments.
Pre-requisites for the Course:
None
Course Description and Learning Objectives
Family businesses show distinct core competencies that can result in unique competitive advantages. They take a long-run view of the business—across generations, rather than publicly traded quarterly reports. Their capital can be very patient. Owners will sacrifice their salaries to make payroll. They are an integral part of their communities, unlike publicly traded counterparts that might abandon a community at the blink of a budget. They can engender a great deal of loyalty on the part of employees, and the existence of family may reduce agency problems.
Family Businesses also face challenges that threaten their continuity. The challenges are primarily the result of issues presented by the interaction of family, management, and ownership—particularly where the family wishes to perpetuate its influence and/or control from generation to generation. Family firms seem to be as agile in one generation as they are fragile across generations.
Family businesses start with an owner-managed first generation (usually an entrepreneur). The next generation—G2—is the sibling generation, and G3 is the cousin era. The probability of passing the company to the next generation diminishes significantly, with fewer than half making it to G2 and only about less than 15% making it to G3. So, despite the benefits of family, there can be some significant issues.
The course explores and analyzes the continuity challenges of a family business and its best management practices. This course focuses on pragmatic, action-oriented management, governance, finance, and family/business leadership skills.
Attention is devoted to evaluating family firms and their growth options to provide a roadmap for analyzing how family ownership, control, and management affect performances and how family firms can create and ensure more value through generations.
The course presents seven different sections:
· SECTION 1: Family firms: prevalence and relevance
· SECTION 2: Governance in the family firm
· SECTION 3: Strategic management in the family firm
· SECTION 4: Succession in the family firm
· SECTION 5: Change and transgenerational value creation
· SECTION 6: Interpersonal relationships and conflict in the family firm
· SECTION 7: Financial management in the family firm
The course addresses the governance, management, and finance of established family businesses. It examines succession, values, life cycles, business and marketing strategies, conflict resolution, communications, legal, and financial aspects, estate planning, management, philanthropy, and other topics that uniquely touch family business governance, management, and finance. It will convey the characteristics that differentiate family businesses from other businesses.
One of the features, which make this course unique and particularly modern, is a part of Section 7: Financial management in the family firm dedicated to the mysterious and fascinating world of the family office. This is the little-known but key professional practice of advising entire families-in-business, frequently large, diversified, and with wide ramifications, about the complete spectrum of activities necessary to ensure that wealth is created, preserved, transmitted, and spread across the enlarged family community. These services range from asset allocation to risk management, education, efficient tax structuring, corporate finance, corporate governance, intra-, and inter-generational transmission, philanthropy, etc. Given the enormous amount of wealth and power concerned, this phenomenon is increasingly important and starts to attract some focus, particularly on the best graduate students and professional talents.
Upon completion of this course, students should understand:
- The unique assets and vulnerabilities of family enterprises.
- The role of the CEO in governance, management, and the transfer of power.
- The relationship between the role of the board, the family council, and top management in providing effective governance for family business continuity.
- Key family dynamics.
- The relevance for families to manage collectively wealth created in professional ways,
and be able to:
- Identify the various stakeholders and the role of trust among family members and their impact on succession and continuity.
- Discuss the developmental needs and challenges of next-generation leaders.
- Analyze the effect of estate taxes on ownership transfer across generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses.
- Explain the importance of strategic planning to family business continuity.
- Explore the critical role and challenges that nonfamily managers play in family-owned operations.
- Analyze the impact of family culture, communication, conflict, and unity and explore their interaction effects on the family business.
- Assess whether they want to seek employment in family businesses as key employees/managers or in a professional advisory role.
Teaching methods
Lessons will be characterized by the transfer of knowledge and the strong interaction within the classroom; there are analyses of situations, problems, and business cases to facilitate participants in learning.
Regular attending students are strongly recommended to participate in all the lectures, preparations, and presentations of the business cases.
This course uses readings, lectures, exercises, cases, individual and team assignments, and class discussions to meet its goals. Case assignments provide an important foundation for class discussion and must be completed before each class session. The due dates for all cases and other assignments are listed in the class schedule at the end of the syllabus. Lectures will highlight key points from the readings and provide additional information to supplement the readings. Cases will allow you to apply what you have learned to real-world issues and scenarios. Because each of you brings unique perspectives and experiences to the class, participation in class discussions and activities is essential to your learning and that of other class members. To further enrich your learning, you will also be matched with an MScBA Teaching Assistant.
Textbook
Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709
Cases
During the course, we will discuss 10 cases:
1. More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45)
2. Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112)
3. Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125)
4. Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166)
5. Managing paradoxes (Chapter 6: Zellweger, pages: 193-194)
6. Bernet's choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307)
7. Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363)
8. Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491)
9. Tom's world (Chapter 9: Zellweger, pages: 422-424)
(the following case from Harvard Business School Publishing. You need to register to download the cases at the following link: https://hbr.org, then download the case at the indicated link)
10. Medco Energi Internasional
Additional References
- Poza, E. J., "Family Business", First Edition. Mason, OH: Thomson South-Western, 2004.
- Gnan, L. and Montemerlo, D., (2006), "Family-firm relationship in Italian SMEs: ownership and governance issues in a double-fold theoretical perspective", in P. Z. Poutziouris P., Smyrnios, K. X., and Klein, S. B., "Handbook of research on family business", Edward Elgar Publishing.
- Zattoni, A., Gnan, L., Huse, M., (2012) , "Does Family Involvement Influence Firm Performance? Exploring the Mediating Effects of Board Processes and Tasks", Journal Of Management, ISSN: 0149-2063, DOI: 10.1177/0149206312463936
- Gnan, L. and Songini, L., (2015), "Family involvement and agency cost control mechanisms in family small and medium-sized enterprises", Journal Of Small Business Management, vol. 53, p. 748-779, ISSN: 0047-2778, DOI: 10.1111/jsbm.12085
- Gnan, L., Montemerlo, D., Huse, M. (2015), "Governance systems in family SMEs: the substitution effects between family councils and corporate governance mechanisms", Journal of Small Business Management, p. 1-27, ISSN: 1540-627X, DOI: 10.1111/jsbm.12070
- Gnan, L., Montemerlo, D., Schulze, W., Corbetta, G., (2008), “Governance Structures in Italian Family SMEs” In: (a cura di): Comacchio A. and Pontiggia A., “L'organizzazione fa la differenza”, Roma: Carocci Editore, ISBN: 9788843045587
- Gnan, L. and Montemerlo, D., (2007), "Family-firm relationship in Italian SMEs: ownership and governance issues in a double-fold theoretical perspective" In: "Handbook of research on family business", Elgar, ISBN: 978-1845424107
- Songini, L., Gnan, L., Morelli, C., Vola, P., (2015), "The why and how of managerialization of family businesses: evidences from Italy", Piccola Impresa / Small Business, vol 1, DOI: 10.14596/pisb.179, pp 85-117
- Songini, L., Gnan, L., Malmi, T (2013), "The role and impact of accounting in family business", Journal of Family Business Strategy, vol. 4, p. 71-83, ISSN: 1877-8585, DOI: 10.1016/j.jfbs.2013.04.002
- Gnan, L., Songini, L., (2014), "The glass ceiling in SMEs and its impact on firm managerialisation: a comparison between family and nonfamily SMEs", International Journal of Business Governance And Ethics, vol. 9, ISSN: 1477-9048
- de Pedys, V. and Antonelli, A,. (2008) "Family office for family business", Oxford management Publishing, ISBN 978-1-906728-01-4
- Poutziouris, P., (2001) "Understanding family firms", in (Ed.) Adam, J., Institute of Directors, "The Growing Business Handbook", London: Kogan Page, Chapter 6.3: pp. 9-15, 4th edition, ISBN 074943600X
- Levin, R. and Travis, V., (1987), "Small company finance: what the books don't say", Harvard Business Review, nov-dec: 87608
- Villalonga, B. and Amit, R., (2005), "How do family ownership, control and management affect firm value", Journal of financial economics, 80: 385-417
- Wilson, R., (2013), "The family office Report", FamilyOfficesGroup.com
- Amit, R. and Perl, R., (2012) "2012 Family Governance Report", Wharton Global family Alliance, Wharton School, University of Pennsylvania
- Amit, R. and Lichtenstein, H., (2010), "Benchmarking the Single Family Office" Wharton Global Family Alliance, Wharton School, University of Pennsylvania
Suggested videos
1. Introductory video: 4 Lessons from the Best Family Businesses
https://hbr.org/video/4660653966001/4-lessons-from-the-best-family-businesses
2. Three circle model: importance of governance, setting goals, holistic leadership and caring for the interests of the family
https://www.youtube.com/watch?v=D85pqiL1tNM
3. The unique strengths and weaknesses of family businesses today, contrasting it with the humble mom-and-pop store the term usually brings to mind
https://www.youtube.com/watch?v=suL-HkP-2Ts
4. The topic of Building a Family Business That Lasts and provides viewers with four key points to walk away with
https://www.youtube.com/watch?v=vZ52w3wBP1U
5. The key attention points and delicacies involved in preparing and transferring a business to the next generation
https://www.youtube.com/watch?v=Io9aWtuSEh4
6. Family Business Governance: Family Constitution
https://www.youtube.com/watch?v=i5psd_84euA
7. Family-owned companies need to be run with emotional, as well as professional leadership
https://www.youtube.com/watch?v=2bYo2Ph48_E
8. Toward a theory of how some family firms nurture transgenerational entrepreneurship
https://www.youtube.com/watch?v=AzFginXvSrM
9. Family Business Longevity
https://www.youtube.com/watch?v=uoHRNLuoYHM
10. 5 Ways For Private Equity Firms to Raise Capital From Family Offices
https://www.youtube.com/watch?v=EX8TnQmOFyc
11. Address the challenges faced by family businesses
https://www.youtube.com/watch?v=mItel08kE-Q
12. Conflict in the Family Business
https://www.youtube.com/watch?v=CVILBwkMVxc
13. Stories of Wasteful Conflict in Family Businesses
https://www.youtube.com/watch?v=elzfKRYw1yA
Case Discussions
Regular attending students are expected to be fully engaged in the entire learning process. Regular attending students are expected to:
1) prepare the assigned readings of the cases before each class.
2) prepare as a group work a PowerPoint presentation on the case, based on the specific assignment.
3) come to class ready to participate and discuss to enhance the individual's learning and the class.
On the website of the course, students find for each case the relative assignment. Please carefully read the questions before the session and use them for preparing the PowerPoint presentation.
Each student will be involved in the class discussion on the cases and tie the assigned reading for the session. The objective is to bring all class members into the debate. The cases are designed to integrate the concepts from the case into the context of the course. The preparation and the discussion of the cases do not exclude the study of the theoretical concepts useful for the discussion of the cases themselves and the passing of the course exam.
With the cases' discussions in the CLASSROOM, each student will develop:
1. The ability to set the parameters for the problem (key concepts from the case).
2. A depth of knowledge about the case subject (understanding of material, excellent response to the observations of others).
3. The ability to tie in the case with other course concepts.
4. The ability to get others involved in the discussion.
To adequately discuss the cases, students do:
· Be prepared with facts and specific quotes from the case.
· Be prepared to comment, ask a question, or develop ideas about the case.
During the discussion, students do:
· Take a position on a question or a point.
- Ask clarifying questions.
· Help keep the discussion moving and on track.
· Help draw others into the discussion.
· Integrate theories and content from other cases.
During the discussion, students do not:
· Be unprepared and show your lack of knowledge.
- Monopolize the discussion.
- Make irrelevant comments.
· Be insensitive to other's desire to speak or to their opinions.
All the regular attending students are kindly invited to build up workgroups (MINIMUM 3 PERSONS – MAXIMUM 5 PERSONS). Each workgroup should prepare a PowerPoint presentation for each case. Into the first slide, the names of the students belonging to the group should be reported.
The structure of the presentation should follow the following outline:
- One or more introductory slides aimed at describing/reporting the story, the characters, and all the necessary elements to define the context and boundaries of the case clearly.
- One slide mentioning the questions of the assignment and underlining the learning goals of the case.
- One or more slides reporting the answers to each question of the assignment.
- One or more slides reporting the final remarks on the case.
- One closing slide about the lessons learned after the group discussion of the case.
How to prepare the PowerPoint presentation of the case?
Introduction – short presentation of the case, brief description of the problems and situations that should be coped with the discussion.
Diagnosis – Problem setting of the context and the situation. Description of the mains facts and elements connected with the concepts and models of Family Business. What went wrong, and which actions/situations, instead, were right? Which elements could be considered for the diagnosis?
Solution – Students should provide a possible answer to questions/problems related to the case and a possible and clear indication of how to approach the situation and how to solve it. The entire proposal should represent a consistent action plan in terms of behaviors and expected results.
Conclusions – Conclusions should not be longer than 300-500 words and should describe how the situation and the problem characterized the case, how Family Business schemata might help solve the case, and what the proposed solution might generate in terms of organizational consequences.
Lessons learned – At the end of the presentation elements/suggestions/advice that we "take-home" from the case discussion should be identified and reported.
NOTE: During the case discussion, students should explicitly address the context and the different situations with concepts related to Family Business and with models and theories of this course.
Case Discussions' Class Participation
The best way to learn, especially about FB, is to participate in your education actively. In this class, "participation" is defined as quality contributions to class discussion and exercises. There are four pre-requisites for successful participation:
- Be here on time and prepared. If you are not here, you cannot contribute much to class discussion. If you need to miss class for a predictable reason (e.g., job interview, athletic competition), please notify us at least 24 hours in advance so that we can make arrangements for any in-class exercises and so that you can obtain the materials distributed during the class. Of course, we realize that in some cases, unforeseeable emergencies arise. Although we will not directly penalize you for non-attendance, be aware that multiple absences will indirectly hurt you by preventing you from participating in class, thereby lowering your participation grade. To contribute to class discussion, you must come to class having carefully prepared all assignments (i.e., readings, cases, exercises).
- Be brave. Everyone in this class is smart, engaging, and has unique life experiences to share. You will get the most out of this course if you ask questions, voice opinions, and express your thoughts to one another. If you feel uncomfortable talking in class, please send me an e-mail or set up an appointment to talk with me early in the semester. We will do everything we can to accommodate your circumstances, but we can only do so if they are brought to our attention.
- Be courteous. Successful participation includes treating your classmates respectfully and professionally. Listen carefully to the comments and questions that your classmates voice. You may learn something new from their perspectives, and you will be able to avoid merely repeating something that another classmate has said earlier in the discussion. Also, it is perfectly acceptable for you to voice disagreement with an opinion provided by another student. The open debate often leads to the most thoughtful and informative class discussions. However, please express your argument in a kind and considerate manner.
- Be engaged. This class is "unplugged." Once class starts, all electronics (e.g., computers, cell phones, tablets, etc.) should be turned off and put away. If you need to use a device because of a language or disability issue, you need to secure permission at the beginning of the class. The misuse of an electronic device (e.g., surfing the web or texting) will adversely affect your grade.
To facilitate the visioning of its PowerPoint presentation in the classroom, each workgroup should take a personal computer with PowerPoint installed and an available VGA connection.
By 8 pm of the day before the case discussion, all regular attending students should send to the Course's Instructors, attaching the case presentation prepared. ONLY STUDENTS WHO HAD HANDED OVER ALL THE CASE PRESENTATIONS WILL BE ADMITTED TO THE 1st EXAM AFTER THE COURSE.
Policy for Late Assignments
As in the business world, work must be received on time to receive full credit. If you are late on an assignment, your access to the 1st exam after the course will be compromised. You are always welcome to hand in an assignment before its due date if you know that you will be busy as the due date approaches. If you think that you will not complete an assignment by the stated due date, please speak with us in advance to make alternative arrangements. Our policy on late assignments will depend on the specific circumstances surrounding the problem and thus may differ from student to student. Providing advance notice about a late assignment will minimize the penalty you receive on that assignment but does not guarantee that there will be no penalty for turning the assignment in late.
Other learning sources
Slides and other materials will be available on the course website.
THE SLIDES DO NOT REPRESENT A SUPPORT FOR AN EFFECTIVE AND SUCCESSFUL PREPARATION FOR THE EXAM OF THE COURSE. THEY REPRESENT ONLY A HELP TO FACILITATE THE TRANSFER OF THE KNOWLEDGE TO STUDENTS DURING THE LECTURES.
Attendance
Because of the concentrated nature of the MScBA program, attendance in class is crucial.
Not regular attending students will be required to prepare for the exam ALL the chapters of the textbook Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709 and ALL the cases discussed in the classroom.
NOTE: Attendance to the first class session is mandatory. Important information about the course and the instructor's expectations are given during the first session. If you know that you will have to be absent for one session, please contact your instructor to ensure that absence from a session is acceptable.
Exam
The 1st exam after the course is a written exam (the 1st), while all the other exams will be oral.
In the case of a written exam, the duration is about 3-4 hours, and it includes:
a) Case discussion - You may be given a case study to which some questions may pertain to lead the discussion. As you respond to the questions, please use specific content and theories (use names to identify theories and models) as the basis of your analysis. You will not receive credit for your personal opinions unless backed by theory, lecture, and/or text material. Also, describe how you see the content/theory applying to the situation. Your answers will be evaluated based upon both quantity and quality. Answers that are more complete and demonstrate a higher level of understanding and analysis will receive more points.
b) Some questions directly connected to the course textbook – The questions could be open, closed (multiple choice), or a combination of both. You may be asked to discuss the models and the theories presented during the course. You will be asked to interpret some real incidents and focus your attention on specific theoretical issues.
1st exam after the course participation and exam grades registering on the booklet
Only regular attending students that have delivered the hard copies of ALL the cases to the Instructors can take the 1st exam after the course with a format explicitly dedicated to them.
Only regular registered students on the DELPHI System will be allowed to register their grades.
The 1st exam grades will be registered after the official exam date; Teachers will communicate that date. It is compulsory to come on that exam date to record the grade on the Delphi and the booklet.
Team Project
The purpose of the project is to allow your team to apply what has been learned in the course (through course lectures, readings, and case discussions) to problems in a family firm of your team's choice.
Class members, regular attending students, will work in teams of four (4) people.
To the Team Project, regular attending students will be allowed to achieve a -3/+3 extra points to the final grade of the 1st exam after the course. Only regular attending students taking the 1 st exam after the course will be accepted for the Team Project.
Your team should identify a family firm to study (Please, no student groups).
Your team is to gather information from people in the family firm through direct contact. You may supplement this information with data from the media, the organization's literature, and other secondary sources. You should identify a relatively recent problem to analyze (i.e., this should not be a historical account of a problem and the company's solution). You should focus your analysis by applying the concepts from the course. While it is acceptable to incorporate several concepts from the course, please aim for depth rather than breadth regarding course concepts. Your goal is to diagnose the mechanisms causing the problem or issue of concern in the organization. Initially, you may notice many symptoms (for instance, a crisis after the succession, seemingly an unhealthy family culture, low family members' commitment and involvement, governance issues, etc.), but your task is to get to the underlying reason for these symptoms. And beware, sometimes the initial symptoms we think we see are not what they appear to be.
There are three broad goals for this assignment:
1. One goal of this assignment is obviously to take the initiative to make a positive contribution to a family firm.
2. Another primary goal is to provide an opportunity for you to learn more about family businesses firsthand and use your critical thinking and reflection skills to link your experience with this family firm to your learning concerning family business theories.
3. The final goal is to provide a forum for you to hone your team member and leader skills and reflect on the learning gained from this team experience. Each team will make a presentation and write a paper that describes what you did for the family firm, what you learned about the family business, and what you learned about working on a team.
To meet these broad goals, your team should answer the following questions in the assignments detailed below.
a) What are the issues or problems facing the family firm?
b) What can Course concepts be applied to understand why this problem is occurring?
c) What recommendations can you offer to help improve the family business functioning?
Deliverables of the Team Project:
1. The project proposal is due to Instructors by the 9th session of the course by 5 pm. It should include:
a) the names of your group members
b) your team name
c) the name of the organization
d) the name, contact information, and level of your contact person
e) the method you will use to gain access to the organization
f) a brief description (one paragraph) of the problem facing the organization.
2. Your written project is due to Instructors by the 18th session of the course by 5 pm .
It should contain a maximum of 15 double-spaced pages (1 cm margins, 12 point font). You will be penalized significantly for exceeding this limit. The limit does not include appendices, which you are free to use to provide charts, figures, or other background material not necessary in the main body of your analysis. However, appendices that are not directly referenced in the main text will not be read. LATE PROJECT WRITE-UPS WILL NOT BE ACCEPTED.
This written project should summarize what you did for/within the organization, what you have learned about organizational behavior, and what you have learned about working on a team.
Grading of the Team Project:
Your group project will be evaluated on the following criteria:
a. Problem definition: How well (i.e., thoroughly and concisely) describe the organizational context, the relevant parties, and the factors that are important to the problem?
b. Accurate and thorough use of course concepts.
c. Integration of course concepts with information about the company and problem, i.e., how well do you integrate course concepts with details about the problem to illuminate the problem in a way that leads to solutions?
d. The extent to which recommendations are consistent with analysis.
e. Quality of written analysis.
Analytical Syllabus
|
# |
Agenda |
Lecture/ Case discussion |
Lecturer |
|
SECTION 1: Family firms: prevalence and relevance |
|||
|
1 |
Introduction of the Course (Chapter 1: Zellweger, pages: 1-3) 1. Thematic focus 2. Intended audience 3. Structure and pedagogical tools Defining the family business (Chapter 2: Zellweger, pages: 4-22) 1. The distinction between family and nonfamily firms 2. Defining family business by type of family involvement 3. Circle models of family influence 4. Family firm identity 5. Family business definition |
Lecture |
GNAN |
|
2 |
Prevalence and economic contribution of family firms around the globe (Chapter 3: Zellweger, pages: 24-33) 1. Prevalence of family firms worldwide 2. Economic contribution of family firms 3. Institutional setting and the prevalence of family firms Strengths and weaknesses of family firms (Chapter 4: Zellweger, pages: 36-42) 1. Typical strengths of family firms 2. Typical weaknesses of family firms 3. Bivalent attributes of family firm characteristics CASE STUDY: More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45) |
Lecture and Case |
GNAN |
|
SECTION 2: Governance in the family firm |
|||
|
3 |
Governance in the family firm: premises, corporate and ownership governance (Chapter 5: Zellweger, pages: 46-72) 1. Why do family firms need governance? 2. Typical governance constellations in family firms 3. Performance implications of governance constellations 4. Untangling corporate, ownership, family governance 5. Corporate governance 6. Ownership governance |
Lecture |
GNAN |
|
4 |
Governance in the family firm: family governance (Chapter 5: Zellweger, pages: 73-105) 1. Family governance 2. Governance documents: code of conduct and family charter 3. Governance bodies: family assembly and family council 4. Integrated governance in family firms CASE STUDY: Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112) |
Lecture and Case |
GNAN |
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SECTION 3: Strategic management in the family firm |
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5 |
Strategic management in the family business: competitive advantages and the agency perspective (Chapter 6: Zellweger, pages: 116-134) 1. Strategic decision making in family firms 2. Conceptualizing the competitive advantage of family firms 3. The agency perspective CASE STUDY: Henkel's Genthin plant (Chapter 6: Zellweger, page: 125) |
Lecture and Case |
GNAN |
|
6 |
Strategic management in the family business: RBV and OI perspectives (Chapter 6: Zellweger, pages: 137-163) 1. The resource-based perspective 2. The organizational identity perspective CASE STUDY: Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166) |
Lecture and Case |
GNAN |
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7 |
Strategic management in the family business: institutional and paradox perspectives (Chapter 6: Zellweger, pages: 167-194) 1. The institutional perspective 2. The paradox perspective 3. Generic strategies for family firms 4. Tools for strategic management in family firms CASE STUDY: Managing paradoxes (Chapter 6: Zellweger, pages: 193-194) |
Lecture and Case |
GNAN |
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SECTION 4: Succession in the family firm |
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8 |
Succession in the family firm: goals and processual issues (Chapter 7: Zellweger, pages: 203-234) 1. Succession options 2. Opportunities and challenges of succession options 3. Significance of succession options 4. Declining relevance of infra-family succession 5. Sources of complexity in family business succession 6. Structuring the succession process: succession framework 7. Clarifying goals and priorities |
Lecture |
GNAN |
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9 |
Succession in the family firm: change strategy and who is in charge of the change (Chapter 7: Zellweger, pages: 240-254) 1. Reviewing the firm's strategy 2. Planning the transition of responsibilities |
Lecture |
GNAN |
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10 |
Succession in the family firm: value, finance, legal, and tax issues (Chapter 7: Zellweger, pages: 258-305) 1. Valuing the firm 2. Financing the succession 3. Defining the legal and tax setup CASE STUDY: Bernet's choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307) |
Lecture and Case |
GNAN |
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SECTION 5: Change and transgenerational value creation |
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11 |
Change and transgenerational value creation (Chapter 8: Zellweger, pages: 311-356) 1. Change and adaptation in family firms 2. Longevity of family firms 3. Transgenerational value creation in family firms CASE STUDY: Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363) |
Lecture and Case |
GNAN |
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SECTION 6: Interpersonal relationships and conflict in the family firm |
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12 |
Interpersonal relationships and conflict in the family firm: social issues, family values, and perceptions (Chapter 10: Zellweger, pages: 428-466) 1. The social structure of the family 2. Trends in the social structure of the family 3. International variance in family values 4. Understanding interpersonal dynamics in the family firm: a systemic view 5. Justice perceptions |
Lecture |
GNAN |
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13 |
Interpersonal relationships and conflict in the family firm: managing conflicts (Chapter 10: Zellweger, pages: 468-487) 1. Why family firms are fertile contexts for conflict 2. Types of conflict 3. Conflict dynamics 4. Conflict-management styles 5. Communication strategies 6. How to behave in the face of conflict CASE STUDY: Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491) |
Lecture and Case |
GNAN |
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SECTION 7: Financial management in the family firm |
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14 |
Financial management in the family firm: differences with no family firms (Chapter 9: Zellweger, pages: 368-379) 1. Why finance is different for family firms 2. Family equity as a distinct asset class 3. Performance of family firms: a short review of the evidence 4. Risk taking in family firms |
Lecture |
GNAN |
|
15 |
Financial management in the family firm: financial tools (Chapter 9: Zellweger, pages: 380-400) 1. Debt financing 2. Equity financing 3. Leverage 4. Value management 5. Key financial indicators 6. Dilemmas in the financial management of family firms |
Lecture |
GNAN |
|
16 |
Financial management in the family firm: financial sustainability (Chapter 9: Zellweger, pages: 402-407) 1. Principles for the sustainable financial management of family firms 2. The role of the CFO in family firms CASE STUDY: Tom's world (Chapter 9: Zellweger, pages: 422-424) |
Lecture and Case |
GNAN |
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17 |
Financial management in the family firm: compensations (Chapter 9: Zellweger, pages: 407-411) 1. Management compensation in family firms CASE STUDY: Medco Energi Internasional (HBS 9-207-021) |
Lecture and Case |
GNAN |
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18 |
Financial management in the family firm: family offices (Chapter 9: Zellweger, pages: 412-417 and Chapter 5: Zellweger, pages: 83-89) 1. The responsible shareholder in the family firm 2. Wealth governance |
Lecture |
GNAN |
Updated A.Y. 2020-2021
FAMILY BUSINESS
(Prof. Luca Gnan)
Teaching Staff responsible for the Course:
Prof. Luca Gnan
E-mail: luca.gnan@uniroma2.it
Availability: Contact via e-mail
Prof.ssa Giulia Flamini
E-mail: giulia.flamini@uniroma2.it
Availability: Contact via e-mail
We are committed to making this course a valuable learning experience for you. After the first month, we will spend part of a class session evaluating our progress, and we will make any necessary changes to keep us on track. However, we welcome your feedback at any time in the semester. It is easiest to reach us by e-mail or during office hours, but we are always happy to set up an appointment. Additionally, if you have a disability that requires unique accommodation, please let us know ASAP so that we can be helpful to you.
E-mails, Office Hours & Feedback on Assignments
We endeavor to answer e-mails within one day. If you have not heard from us within that time, please resend the e-mail. Grades & comments will be posted online in the materials section of the course website. We will be happy to give feedback and discuss assignments after all grading is complete for a specific task. Office hours are scheduled by e-mail request.
We may answer questions of assignment clarification in class and via e-mails to benefit the entire class. We may also give extra grades (see below Team Project) during the course that, while generally designed to support learning in the course, will also help your participation grade. These are pass/fail and do not include comments.
Pre-requisites for the Course:
None
Course description and Learning Objectives
Family businesses shows distinct core competencies that can result in unique competitive advantages. They take a long run view of the business—across generations, rather than publicly traded quarterly reports. Their capital can be very patient, owners will sacrifice their salaries in order to make payroll, and they are an integral part of their communities, unlike publicly traded counterparts that might abandon a community at the blink of a budget. They can engender a great deal of loyalty on the part of employees, and the existence of family may reduce agency problems.
Family Businesses also face challenges that threaten their continuity. The challenges are primarily the result of issues presented by the interaction of family, management, and ownership—particularly where the family wishes to perpetuate its influence and/or control from generation to generation. Family firms seem to be as agile in one generation as they are fragile across generations.
Family businesses start with an owner-managed first generation (usually an entrepreneur). The next generation—G2—is the sibling generation, and G3 is the cousin era. The probability of passing the company to the next generation diminishes significantly, with fewer than half making it to G2 and only about less than 15% making it to G3. So, despite the benefits of family, there can be some significant issues.
The course explores and analyzes continuity challenges of family business and their best management practices. The focus of this course is on pragmatic, action-oriented, management, governance, finance, and family/business leadership skills.
Attention is devoted to evaluating family firms and their growth options to provide a roadmap for analyzing how family ownership, control, and management affect performances and how family firms can create and ensure more value through generations.
The course presents seven different sections:
- SECTION 1: Family firms: prevalence and relevance
- SECTION 2: Governance in the family firm
- SECTION 3: Strategic management in the family firm
- SECTION 4: Succession in the family firm
- SECTION 5: Change and transgenerational value creation
- SECTION 6: Interpersonal relationships and conflict in the family firm
- SECTION 7: Financial management in the family firm
The course addresses the governance, the management, and the finance of established family businesses. It examines succession, values, life cycles, business and marketing strategies, conflict resolution, communications, legal, and financial aspects, estate planning, management, philanthropy and other topics that uniquely touch family business governance, management and finance. It will convey the characteristics that differentiate family businesses from other businesses.
One of the features, which make this course unique and particularly modern, is a part of the Section 7: Financial management in the family firm dedicated to the mysterious and fascinating world of the family office. This is the little-known, but key professional practice of advising entire families-in-business, frequently large, diversified and with wide ramifications, about the complete spectrum of activities necessary to ensure that wealth is created, preserved, transmitted and spread across the enlarged family community. These services range from asset allocation to risk management, to education, efficient tax structuring, corporate finance and corporate governance, intra- and inter- generational transmission, philanthropy, etc. Given the enormous amount of wealth and power concerned, this phenomenon shows increasingly importance and starts to attract some focus, particularly by the best graduate students and professional talents.
Upon completion of this course, students should understand:
- The unique assets and vulnerabilities of family enterprises.
- The role of the CEO in governance, management, and the transfer of power.
- The relationship between the role of the board, the family council, and top management in providing effective governance for family business continuity.
- Key family dynamics.
- The relevance for families to manage collectively wealth created in professional ways,
and be able to:
- Identify the various stakeholders and the role of trust among family members and their impact on succession and continuity.
- Discuss the developmental needs and challenges of next generation leaders.
- Analyze the effect of estate taxes on ownership transfer across generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses.
- Explain the importance of strategic planning to family business continuity.
- Explore the critical role and challenges that non-family managers play in family-owned operations.
- Analyze the impact of family culture, family communication, family conflict, and family unity and explore their interaction effects on the family business.
- Assess whether they want to seek employment in family businesses both as key employees/managers or in a professional advisory role.
Teaching methods
Lessons will be characterized by the transfer of knowledge and the strong interaction within the classroom; there are analyses of situations, problems, and business cases to facilitate participants in learning.
Regular attending students are strongly recommended to participate in all the lectures and preparations and presentations of the business cases.
To meet its goals, this course uses readings, lectures, exercises, cases, individual and team assignments, and class discussion. Case assignments provide an important foundation for class discussion and must be completed before each class session. The due dates for all cases and other assignments are listed in the class schedule at the end of the syllabus. Lectures will be used to highlight key points from the readings and provide additional information to supplement the readings. Cases will allow you to apply what you have learned to real-world issues and scenarios. Because each of you brings unique perspectives and experiences to the class, participation in class discussions and activities is essential to your learning as well as that of other class members. To further enrich your learning, you will also be matched with an MScBA Teaching Assistant.
Textbook
Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709
Cases
During the course, we will discuss 10 cases:
- More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45)
- Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112)
- Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125)
- Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166)
- Managing paradoxes (Chapter 6: Zellweger, pages: 193-194)
- Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307)
- Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363)
- Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491)
- Tom’s world (Chapter 9: Zellweger, pages: 422-424)
(the following case from Harvard Business School Publishing. You need to register to download the cases at the following link: https://hbr.org, then download the case at the indicated link)
- Medco Energi Internasional
Additional References
- Poza, E. J., “Family Business”, First Edition. Mason, OH: Thomson South-Western, 2004.
- Gnan, L. and Montemerlo, D., (2006), “Family-firm relationship in Italian SMEs: ownership and governance issues in a double-fold theoretical perspective”, in P. Z. Poutziouris P., Smyrnios, K. X., and Klein, S. B., “Handbook of research on family business”, Edward Elgar Publishing.
- Zattoni, A., Gnan, L., Huse, M., (2012) ,“Does Family Involvement Influence Firm Performance? Exploring the Mediating Effects of Board Processes and Tasks”, Journal Of Management, ISSN: 0149-2063, DOI: 10.1177/0149206312463936
- Gnan, L. and Songini, L., (2015), “Family involvement and agency cost control mechanisms in family small and medium-sized enterprises”, Journal Of Small Business Management, vol. 53, p. 748-779, ISSN: 0047-2778, DOI: 10.1111/jsbm.12085
- Gnan, L., Montemerlo, D., Huse, M. (2015), “Governance systems in family SMEs: the substitution effects between family councils and corporate governance mechanisms”, Journal of Small Business Management, p. 1-27, ISSN: 1540-627X, DOI: 10.1111/jsbm.12070
- Gnan, L., Montemerlo, D., Schulze, W., Corbetta, G., (2008), “Governance Structures in Italian Family SMEs” In: (a cura di): Comacchio A. and Pontiggia A., “L'organizzazione fa la differenza”, Roma: Carocci Editore, ISBN: 9788843045587
- Gnan, L. and Montemerlo, D., (2007), “Family-firm relationship in Italian SMEs: ownership and governance issues in a double-fold theoretical perspective” In: “Handbook of research on family business”, Elgar, ISBN: 978-1845424107
- Songini, L., Gnan, L., Morelli, C., Vola, P., (2015), “The why and how of managerialization of family businesses: evidences from Italy”, Piccola Impresa / Small Business, vol 1, DOI: 10.14596/pisb.179, pp 85-117
- Songini, L., Gnan, L., Malmi, T (2013), “The role and impact of accounting in family business”, Journal of Family Business Strategy, vol. 4, p. 71-83, ISSN: 1877-8585, DOI: 10.1016/j.jfbs.2013.04.002
- Gnan, L., Songini, L., (2014), “The glass ceiling in SMEs and its impact on firm managerialisation: a comparison between family and non-family SMEs”, International Journal of Business Governance And Ethics, vol. 9, ISSN: 1477-9048
- de Pedys, V. and Antonelli, A,. (2008) “Family office for family business”, Oxford management Publishing, ISBN 978-1-906728-01-4
- Poutziouris, P., (2001) “Understanding family firms”, in (Ed.) Adam, J., Institute of Directors, “The Growing Business Handbook”, London: Kogan Page, Chapter 6.3: pp. 9-15, 4th edition, ISBN 074943600X
- Levin, R. and Travis, V., (1987), “Small company finance: what the books don’t say”, Harvard Business Review, nov-dec: 87608
- Villalonga, B. and Amit, R., (2005), “How do family ownership, control and management affect firm value”, Journal of financial economics, 80: 385-417
- Wilson, R., (2013), “The family office Report”, FamilyOfficesGroup.com
- Amit, R. and Perl, R., (2012) “2012 Family Governance Report”, Wharton Global family Alliance, Wharton School, University of Pennsylvania
- Amit, R. and Lichtenstein, H., (2010), “Benchmarking the Single Family Office” Wharton Global Family Alliance, Wharton School, University of Pennsylvania
Suggested videos
- Introductory video: 4 Lessons from the Best Family Businesses
https://hbr.org/video/4660653966001/4-lessons-from-the-best-family-businesses
- Three circle model: importance of governance, setting goals, holistic leadership and caring for the interests of the family
https://www.youtube.com/watch?v=D85pqiL1tNM
- The unique strengths and weaknesses of family businesses today, contrasting it with the humble mom-and-pop store the term usually brings to mind
https://www.youtube.com/watch?v=suL-HkP-2Ts
- The topic of Building a Family Business That Lasts and provides viewers with four key points to walk away with
https://www.youtube.com/watch?v=vZ52w3wBP1U
- The key attention points and delicacies involved in preparing and transferring a business to the next generation
https://www.youtube.com/watch?v=Io9aWtuSEh4
- Family Business Governance: Family Constitution
https://www.youtube.com/watch?v=i5psd_84euA
- Family-owned companies need to be run with emotional, as well as professional leadership
https://www.youtube.com/watch?v=2bYo2Ph48_E
- Toward a theory of how some family firms nurture transgenerational entrepreneurship
https://www.youtube.com/watch?v=AzFginXvSrM
- Family Business Longevity
https://www.youtube.com/watch?v=uoHRNLuoYHM
- 5 Ways For Private Equity Firms to Raise Capital From Family Offices
https://www.youtube.com/watch?v=EX8TnQmOFyc
- Address the challenges faced by family businesses
https://www.youtube.com/watch?v=mItel08kE-Q
- Conflict in the Family Business
https://www.youtube.com/watch?v=CVILBwkMVxc
- Stories of Wasteful Conflict in Family Businesses
https://www.youtube.com/watch?v=elzfKRYw1yA
Case Discussions
Regular attending students are expected to be fully engaged in the entire learning process. Regular attending students are expected to:
- prepare the assigned readings of the cases before each class.
- prepare as a group work a PowerPoint presentation on the case, based on the specific assignment.
- come to class prepared to participate and to discuss to enhance the learning of the individual and the class.
On the web site of the course, students find for each case the relative assignment. Please carefully read the questions before the session and use them for preparing the PowerPoint presentation.
Each student will be involved in the class discussion on the cases and tie the assigned reading for the session. The objective is to bring all class members in the debate. The cases are designed to integrate the concepts from the case into the context of the course. The preparation and the discussion of the cases do not exclude the study of the theoretical concepts useful for the discussion of the cases themselves and the passing of the exam of the course.
With the cases' discussions in the CLASSROOM, each student will develop:
- The ability to set the parameters for the problem (key concepts from the case).
- A depth of knowledge about the case subject (understanding of material, excellent response to the observations of others).
- The ability to tie-in case with other course concepts.
- The ability to get others involved in the discussion.
To adequately discuss the cases, students do:
- Be prepared with facts and specific quotes from the case.
- Be prepared to comment, ask a question, or develop ideas about the case.
During the discussion, students do:
- Take a position on a question or a point.
- Ask clarifying questions.
- Help keep the discussion moving and on track.
- Help draw others into the discussion.
- Integrate theories and content from other cases.
During the discussion, students do not:
- Be unprepared and show your lack of knowledge.
- Monopolize the discussion.
- Make irrelevant comments.
- Be insensitive to other's desire to speak or to their opinions.
All the regular attending students are kindly invited to build up workgroups (MINIMUM 3 PERSONS – MAXIMUM 5 PERSONS). Each workgroup should prepare a PowerPoint presentation for each case. Into the first slide, the names of the students belonging to the group should be reported.
The structure of the presentation should follow the following outline:
- One or more introductory slides aimed at describing/reporting the story, the characters, all the necessary elements to define the context and the boundaries of the case clearly.
- One slide mentioning the questions of the assignment and underlining the learning goals of the case.
- One or more slides reporting the answers to each question of the assignment.
- One or more slides reporting the final remarks on the case.
- One closing slide about the lessons learned after the group discussion of the case.
How to prepare the PowerPoint presentation of the case?
Introduction – short presentation of case, short description of the problems and situations that should be coped with the discussion.
Diagnosis – Problem setting of the context and the situation. Description of the mains facts and elements connected with the concepts and models of Family Business. What went wrong, and which actions/situations, instead, were right? Which elements could be considered for the diagnosis?
Solution – Students should provide a possible answer to questions/problems related to the case and a viable and clear indication of how to approach the situation and how to solve it. The entire proposal should represent a consistent action plan in terms of behaviors and expected results.
Conclusions – Conclusions should not be longer than 300-500 words and should describe how the situation and the problem characterized the case, on how Family Business schemata might help to solve the case, and what the proposed solution might generate in terms of organizational consequences.
Lessons learned – At the end of the presentation elements/suggestions/advises that we "take home" from the case discussion should be identified and reported.
NOTE: During the case discussion, students should explicitly address the context and the different situations with concepts related to Family Business and with models and theories of this course.
Case Discussions' Class Participation
We believe that the best way to learn, especially about ODB, is to participate in your education actively. In this class, "participation" is defined in terms of quality contributions to class discussion and exercises. There are four pre-requisites for successful participation:
- Be here on time and prepared. If you are not here, you cannot contribute much to class discussion. If you need to miss class for a predictable reason (e.g., job interview, athletic competition), please notify us at least 24 hours in advance so that we can make arrangements for any in-class exercises and so that you can obtain the materials distributed during the class. Of course, we realize that in some cases unforeseeable emergencies arise. Although we will not directly penalize you for non-attendance, be aware that multiple absences will indirectly hurt you by preventing you from participating in class, thereby lowering your participation grade. To contribute to class discussion, you must come to class having carefully prepared all assignments (i.e., readings, cases, exercises).
- Be brave. Everyone in this class is smart, engaging, and has unique life experiences to share. You will get the most out of this course if you ask questions, voice opinions, and express your thoughts to one another. If you feel uncomfortable talking in class, please send me an e-mail or set up an appointment to talk with me early in the semester. We will do everything we can to accommodate each of your circumstances, but we can only do so if they are brought to our attention.
- Be courteous. Successful participation includes treating your classmates respectfully and professionally. Listen carefully to the comments and questions that your classmates voice. You may learn something new from their perspectives, and you will be able to avoid merely repeating something that another classmate has said earlier in the discussion. Also, it is perfectly acceptable for you to voice disagreement with an opinion provided by another student. The open debate often leads to the most thoughtful and informative class discussions. However, please express your argument in a kind and considerate manner.
- Be engaged. This class is "unplugged." Once class starts, all electronics (e.g., computers, cell phones, tablets, etc.) should be turned off and put away. If you need to use a device because of a language or disability issue, you need to secure permission at the beginning of the class. The misuse of an electronic device (e.g., surfing the web or texting) will adversely affect your grade.
To facilitate the visioning of its PowerPoint presentation in the classroom, each workgroup should take a personal computer with PowerPoint installed and an available VGA connection.
By the 8 pm of the day before of the case discussion, all regular attending students should send to the course's Instructors, attaching the case presentation prepared. ONLY STUDENTS WHO HAD HANDED OVER ALL THE CASE PRESENTATIONS WILL BE ADMITTED TO THE 1st EXAM AFTER THE COURSE.
Policy for Late Assignments
As in the business world, work must be received on time to receive full credit. If you are late on an assignment, your access to the Pre-Exam will be compromised. You are always welcome to hand in an assignment before its due date if you know that you will be busy as the due date approaches. If you think that you will not be able to complete an assignment by the stated due date, please speak with us in advance to make alternative arrangements. Our policy on late assignments will depend on the specific circumstances surrounding the problem, and thus may differ from student to student. Providing advance notice about a late assignment will minimize the penalty you receive on that assignment but does not guarantee that there will be no penalty for turning the assignment in late.
Other learning sources
Slides and other materials will be available under the course web site.
THE SLIDES DO NOT REPRESENT A SUPPORT FOR AN EFFECTIVE AND SUCCESSFUL PREPARATION TO THE EXAM OF THE COURSE. THEY REPRESENT ONLY A HELP TO FACILITATE THE TRANSFER OF THE KNOWLEDGE TO STUDENTS DURING THE LECTURES.
Attendance
Because of the concentrated nature of the MScBA program, attendance in class is crucial.
Students with less than 85% of attendance to lectures and case discussions (including arriving late or leaving early) will be required to prepare for the exam ALL the chapters of the textbook Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709 and ALL the cases discussed in classroom.
NOTE: Attendance to the first class session is mandatory. Important information about the course and the instructor's expectations are given during the first session. If you know that you will have to be absent for one session, please contact your instructor to ensure that absence from a session is acceptable.
Exam
The 1st exam after the course is a written exam (the 1st), while all the other exams will be oral exam.
In case of a written exam, the duration is about 3-4 hours and it includes:
- Case discussion - You may be given a case study to which some questions may pertain in order to lead the discussion. As you respond to the questions, please use specific content and theories (use names to identify theories and models) as the basis of your analysis. You will not receive credit for your personal opinions unless backed by theory, lecture, and/or text material. Also, describe how you see the content/theory applying to the situation. Your answers will be evaluated based upon both quantity and quality. Answers that are more complete and demonstrate a higher level of understanding and analysis will receive more points.
- Some questions directly connected to the course textbook – The questions could open, closed (multiple choice), or a combination of the both. You may be asked to discuss the models and the theories presented during the course. You will be asked to interpret some real incidents and to focus your attention to some specific theoretical issues.
1st exam after the course participation and exam grades registering on the booklet
Only regular attending students (85% of attendance to lectures and case discussions, including arriving late or leaving early) that have delivered the hard copies of ALL the case to the Instructors can take the 1st exam after the course with a format explicitly dedicated to them.
Only regular registered students on the DELPHI System will be allowed to register their grades.
The 1st exam grades will be registered after the official exam date; Teachers will communicate that date. It is compulsory to come on that date of the exam for registering the grade on the Delphi and the booklet.
Team Project
The purpose of the project is to give your team an opportunity to apply what has been learned in the course (through course lectures, readings, and case discussions) to problems in a family firm of your team's choice.
Class members, regular attending students, will work in teams of four (4) people.
To the Team Project, regular attending students will be allowed to achieve a -3/+3 extra points to the final grade of the 1st exam after the course. Only regular attending students, taking the 1st exam after the course will be accepted for the Team Project.
Your team should identify a family firm to study (Please, no student groups).
Your team is to gather information from people in the family firm through direct contact. You may supplement this information with data from the media, the organization's literature, and other secondary sources. You should identify a relatively recent problem to analyze (i.e., this should not be an historical account of a problem and the company's solution). You should focus your analysis by applying the concepts from the course. While it is acceptable to incorporate several concepts from the course, please aim for depth rather than breadth regarding the use of course concepts. Your goal is to diagnose the mechanisms that are causing the problem or issue of concern in the organization. Initially, you may notice many symptoms (for instance, a crisis after the succession, seemingly an unhealthy family culture, low family members’ commitment and involvement, governance issues, etc.), but your task is to get to the underlying reason for these symptoms. And beware, sometimes the initial symptoms we think we see are not what they appear to be.
There are three broad goals for this assignment:
- One goal of this assignment is obviously to take the initiative to make a positive contribution to a family firm.
- Another major goal is to provide an opportunity for you to learn more about family businesses first hand and to use your critical thinking and reflection skills to link your experience with this family firm to your learning in relation to family business theories.
- The final goal is to provide a forum for you to hone your skills as a team member and leader and to reflect on the learning gained from this team experience. Each team will make a presentation and write a paper that describes what you did for the family firm, what you learned about family business, and what you learned about working on a team.
To meet these broad goals, your team should answer the following questions in the assignments detailed below.
- What are the issues or problems facing the family firm?
- What course concepts can be applied to understand why this problem is occurring?
- What recommendations can you offer to help improve the family business functioning?
Deliverables of the Team Project:
- The project proposal is due to Instructors by the date of the 9th session of the course by 5 pm. It should include:
- the names of your group members
- your team name
- the name of the organization
- the name, contact information and level of your contact person
- the method you will use to gain access to the organization
- a brief description (one paragraph) of the problem facing the organization.
- Your written project is due to Instructors by the date of the 18th session of the course by 5 pm.
It should contain a maximum of 15 double spaced pages (1 cm margins, 12 point font). You will be penalized significantly for exceeding this limit. The limit does not include appendices, which you are free to use to provide charts, figures, or other background material not necessary in the main body of your analysis. However, appendices that are not directly referenced in the main text will not be read. LATE PROJECT WRITE-UPS WILL NOT BE ACCEPTED.
This written project should summarize what you did for/within the organization, what you have learned about organizational behavior, and what you have learned about working on a team.
Grading of the Team Project:
Your group project will be evaluated on the following criteria:
- Problem definition: How well (i.e., thoroughly and concisely) do you describe the organizational context, the relevant parties, and the factors that are important to the problem?
- Accurate and thorough use of course concepts.
- Integration of course concepts with information about the company and problem, i.e., how well do you integrate course concepts with information about the problem to illuminate the problem in a way that leads to solutions?
- Extent to which recommendations are consistent with analysis.
- Quality of written analysis.
Analytical Syllabus
|
# |
Agenda |
Lecture/ Case discussion |
Lecturer |
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SECTION 1: Family firms: prevalence and relevance |
|||
|
1 |
Introduction of the course (Chapter 1: Zellweger, pages: 1-3) 1. Thematic focus 2. Intended audience 3. Structure and pedagogical tools Defining the family business (Chapter 2: Zellweger, pages: 4-22) 1. The distinction between family and nonfamily firms 2. Defining family business by type of family involvement 3. Circle models of family influence 4. Family firm identity 5. Family business definition |
Lecture |
GNAN |
|
2 |
Prevalence and economic contribution of family firms around the globe (Chapter 3: Zellweger, pages: 24-33) 1. Prevalence of family firms worldwide 2. Economic contribution of family firms 3. Institutional setting and the prevalence of family firms Strengths and weaknesses of family firms (Chapter 4: Zellweger, pages: 36-42) 1. Typical strengths of family firms 2. Typical weaknesses of family firms 3. Bivalent attributes of family firm characteristics CASE STUDY: More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45) |
Lecture and Case |
GNAN |
|
SECTION 2: Governance in the family firm |
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|
3 |
Governance in the family firm: premises, corporate and ownership governance (Chapter 5: Zellweger, pages: 46-72) 1. Why do family firms need governance? 2. Typical governance constellations in family firms 3. Performance implications of governance constellations 4. Untangling corporate, ownership, family governance 5. Corporate governance 6. Ownership governance |
Lecture |
GNAN |
|
4 |
Governance in the family firm: family governance (Chapter 5: Zellweger, pages: 73-105) 1. Family governance 2. Governance documents: code of conduct and family charter 3. Governance bodies: family assembly and family council 4. Integrated governance in family firms CASE STUDY: Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112) |
Lecture and Case |
GNAN |
|
SECTION 3: Strategic management in the family firm |
|||
|
5 |
Strategic management in the family business: competitive advantages and the agency perspective (Chapter 6: Zellweger, pages: 116-134) 1. Strategic decision making in family firms 2. Conceptualizing the competitive advantage of family firms 3. The agency perspective CASE STUDY: Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125) |
Lecture and Case |
GNAN |
|
6 |
Strategic management in the family business: RBV and OI perspectives (Chapter 6: Zellweger, pages: 137-163) 1. The resource-based perspective 2. The organizational identity perspective CASE STUDY: Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166) |
Lecture and Case |
GNAN |
|
7 |
Strategic management in the family business: institutional and paradox perspectives (Chapter 6: Zellweger, pages: 167-194) 1. The institutional perspective 2. The paradox perspective 3. Generic strategies for family firms 4. Tools for strategic management in family firms CASE STUDY: Managing paradoxes (Chapter 6: Zellweger, pages: 193-194) |
Lecture and Case |
GNAN |
|
SECTION 4: Succession in the family firm |
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|
8 |
Succession in the family firm: goals and processual issues (Chapter 7: Zellweger, pages: 203-234) 1. Succession options 2. Opportunities and challenges of succession options 3. Significance of succession options 4. Declining relevance of infra-family succession 5. Sources of complexity in family business succession 6. Structuring the succession process: succession framework 7. Clarifying goals and priorities |
Lecture |
GNAN |
|
9 |
Succession in the family firm: change strategy and who is in charge of the change (Chapter 7: Zellweger, pages: 240-254) 1. Reviewing the firm's strategy 2. Planning the transition of responsibilities |
Lecture |
GNAN |
|
10 |
Succession in the family firm: value, finance, legal, and tax issues (Chapter 7: Zellweger, pages: 258-305) 1. Valuing the firm 2. Financing the succession 3. Defining the legal and tax setup CASE STUDY: Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307) |
Lecture and Case |
GNAN |
|
SECTION 5: Change and transgenerational value creation |
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|
11 |
Change and transgenerational value creation (Chapter 8: Zellweger, pages: 311-356) 1. Change and adaptation in family firms 2. Longevity of family firms 3. Transgenerational value creation in family firms CASE STUDY: Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363) |
Lecture and Case |
GNAN |
|
SECTION 6: Interpersonal relationships and conflict in the family firm |
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|
12 |
Interpersonal relationships and conflict in the family firm: social issues, family values, and perceptions (Chapter 10: Zellweger, pages: 428-466) 1. The social structure of the family 2. Trends in the social structure of the family 3. International variance in family values 4. Understanding interpersonal dynamics in the family firm: a systemic view 5. Justice perceptions |
Lecture |
GNAN |
|
13 |
Interpersonal relationships and conflict in the family firm: managing conflicts (Chapter 10: Zellweger, pages: 468-487) 1. Why family firms are fertile contexts for conflict 2. Types of conflict 3. Conflict dynamics 4. Conflict-management styles 5. Communication strategies 6. How to behave in the face of conflict CASE STUDY: Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491) |
Lecture and Case |
GNAN |
|
SECTION 7: Financial management in the family firm |
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|
14 |
Financial management in the family firm: differences with no family firms (Chapter 9: Zellweger, pages: 368-379) 1. Why finance is different for family firms 2. Family equity as a distinct asset class 3. Performance of family firms: a short review of the evidence 4. Risk taking in family firms |
Lecture |
GNAN |
|
15 |
Financial management in the family firm: financial tools (Chapter 9: Zellweger, pages: 380-400) 1. Debt financing 2. Equity financing 3. Leverage 4. Value management 5. Key financial indicators 6. Dilemmas in the financial management of family firms |
Lecture |
GNAN |
|
16 |
Financial management in the family firm: financial sustainability (Chapter 9: Zellweger, pages: 402-407) 1. Principles for the sustainable financial management of family firms 2. The role of the CFO in family firms CASE STUDY: Tom’s world (Chapter 9: Zellweger, pages: 422-424) |
Lecture and Case |
GNAN |
|
17 |
Financial management in the family firm: compensations (Chapter 9: Zellweger, pages: 407-411) 1. Management compensation in family firms CASE STUDY: Medco Energi Internasional (HBS 9-207-021) |
Lecture and Case |
GNAN |
|
18 |
Financial management in the family firm: family offices (Chapter 9: Zellweger, pages: 412-417 and Chapter 5: Zellweger, pages: 83-89) 1. The responsible shareholder in the family firm 2. Wealth governance |
Lecture |
GNAN |
Updated A.Y. 2020-2021
FAMILY BUSINESS
(Prof. Luca Gnan)
Teaching Staff responsible for the Course:
Prof. Luca Gnan
E-mail: luca.gnan@uniroma2.it
Availability: Contact via e-mail
Prof.ssa Giulia Flamini
E-mail: giulia.flamini@uniroma2.it
Availability: Contact via e-mail
We are committed to making this course a valuable learning experience for you. After the first month, we will spend part of a class session evaluating our progress, and we will make any necessary changes to keep us on track. However, we welcome your feedback at any time in the semester. It is easiest to reach us by e-mail or during office hours, but we are always happy to set up an appointment. Additionally, if you have a disability that requires unique accommodation, please let us know ASAP so that we can be helpful to you.
E-mails, Office Hours & Feedback on Assignments
We endeavor to answer e-mails within one day. If you have not heard from us within that time, please resend the e-mail. Grades & comments will be posted online in the materials section of the course website. We will be happy to give feedback and discuss assignments after all grading is complete for a specific task. Office hours are scheduled by e-mail request.
We may answer questions of assignment clarification in class and via e-mails to benefit the entire class. We may also give extra grades (see below Team Project) during the course that, while generally designed to support learning in the course, will also help your participation grade. These are pass/fail and do not include comments.
Pre-requisites for the Course:
None
Course description and Learning Objectives
Family businesses shows distinct core competencies that can result in unique competitive advantages. They take a long run view of the business—across generations, rather than publicly traded quarterly reports. Their capital can be very patient, owners will sacrifice their salaries in order to make payroll, and they are an integral part of their communities, unlike publicly traded counterparts that might abandon a community at the blink of a budget. They can engender a great deal of loyalty on the part of employees, and the existence of family may reduce agency problems.
Family Businesses also face challenges that threaten their continuity. The challenges are primarily the result of issues presented by the interaction of family, management, and ownership—particularly where the family wishes to perpetuate its influence and/or control from generation to generation. Family firms seem to be as agile in one generation as they are fragile across generations.
Family businesses start with an owner-managed first generation (usually an entrepreneur). The next generation—G2—is the sibling generation, and G3 is the cousin era. The probability of passing the company to the next generation diminishes significantly, with fewer than half making it to G2 and only about less than 15% making it to G3. So, despite the benefits of family, there can be some significant issues.
The course explores and analyzes continuity challenges of family business and their best management practices. The focus of this course is on pragmatic, action-oriented, management, governance, finance, and family/business leadership skills.
Attention is devoted to evaluating family firms and their growth options to provide a roadmap for analyzing how family ownership, control, and management affect performances and how family firms can create and ensure more value through generations.
The course presents seven different sections:
- SECTION 1: Family firms: prevalence and relevance
- SECTION 2: Governance in the family firm
- SECTION 3: Strategic management in the family firm
- SECTION 4: Succession in the family firm
- SECTION 5: Change and transgenerational value creation
- SECTION 6: Interpersonal relationships and conflict in the family firm
- SECTION 7: Financial management in the family firm
The course addresses the governance, the management, and the finance of established family businesses. It examines succession, values, life cycles, business and marketing strategies, conflict resolution, communications, legal, and financial aspects, estate planning, management, philanthropy and other topics that uniquely touch family business governance, management and finance. It will convey the characteristics that differentiate family businesses from other businesses.
One of the features, which make this course unique and particularly modern, is a part of the Section 7: Financial management in the family firm dedicated to the mysterious and fascinating world of the family office. This is the little-known, but key professional practice of advising entire families-in-business, frequently large, diversified and with wide ramifications, about the complete spectrum of activities necessary to ensure that wealth is created, preserved, transmitted and spread across the enlarged family community. These services range from asset allocation to risk management, to education, efficient tax structuring, corporate finance and corporate governance, intra- and inter- generational transmission, philanthropy, etc. Given the enormous amount of wealth and power concerned, this phenomenon shows increasingly importance and starts to attract some focus, particularly by the best graduate students and professional talents.
Upon completion of this course, students should understand:
- The unique assets and vulnerabilities of family enterprises.
- The role of the CEO in governance, management, and the transfer of power.
- The relationship between the role of the board, the family council, and top management in providing effective governance for family business continuity.
- Key family dynamics.
- The relevance for families to manage collectively wealth created in professional ways,
and be able to:
- Identify the various stakeholders and the role of trust among family members and their impact on succession and continuity.
- Discuss the developmental needs and challenges of next generation leaders.
- Analyze the effect of estate taxes on ownership transfer across generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses.
- Explain the importance of strategic planning to family business continuity.
- Explore the critical role and challenges that non-family managers play in family-owned operations.
- Analyze the impact of family culture, family communication, family conflict, and family unity and explore their interaction effects on the family business.
- Assess whether they want to seek employment in family businesses both as key employees/managers or in a professional advisory role.
Teaching methods
Lessons will be characterized by the transfer of knowledge and the strong interaction within the classroom; there are analyses of situations, problems, and business cases to facilitate participants in learning.
Regular attending students are strongly recommended to participate in all the lectures and preparations and presentations of the business cases.
To meet its goals, this course uses readings, lectures, exercises, cases, individual and team assignments, and class discussion. Case assignments provide an important foundation for class discussion and must be completed before each class session. The due dates for all cases and other assignments are listed in the class schedule at the end of the syllabus. Lectures will be used to highlight key points from the readings and provide additional information to supplement the readings. Cases will allow you to apply what you have learned to real-world issues and scenarios. Because each of you brings unique perspectives and experiences to the class, participation in class discussions and activities is essential to your learning as well as that of other class members. To further enrich your learning, you will also be matched with an MScBA Teaching Assistant.
Textbook
Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709
Cases
During the course, we will discuss 10 cases:
- More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45)
- Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112)
- Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125)
- Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166)
- Managing paradoxes (Chapter 6: Zellweger, pages: 193-194)
- Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307)
- Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363)
- Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491)
- Tom’s world (Chapter 9: Zellweger, pages: 422-424)
(the following case from Harvard Business School Publishing. You need to register to download the cases at the following link: https://hbr.org, then download the case at the indicated link)
- Medco Energi Internasional
Additional References
- Poza, E. J., “Family Business”, First Edition. Mason, OH: Thomson South-Western, 2004.
- Gnan, L. and Montemerlo, D., (2006), “Family-firm relationship in Italian SMEs: ownership and governance issues in a double-fold theoretical perspective”, in P. Z. Poutziouris P., Smyrnios, K. X., and Klein, S. B., “Handbook of research on family business”, Edward Elgar Publishing.
- Zattoni, A., Gnan, L., Huse, M., (2012) ,“Does Family Involvement Influence Firm Performance? Exploring the Mediating Effects of Board Processes and Tasks”, Journal Of Management, ISSN: 0149-2063, DOI: 10.1177/0149206312463936
- Gnan, L. and Songini, L., (2015), “Family involvement and agency cost control mechanisms in family small and medium-sized enterprises”, Journal Of Small Business Management, vol. 53, p. 748-779, ISSN: 0047-2778, DOI: 10.1111/jsbm.12085
- Gnan, L., Montemerlo, D., Huse, M. (2015), “Governance systems in family SMEs: the substitution effects between family councils and corporate governance mechanisms”, Journal of Small Business Management, p. 1-27, ISSN: 1540-627X, DOI: 10.1111/jsbm.12070
- Gnan, L., Montemerlo, D., Schulze, W., Corbetta, G., (2008), “Governance Structures in Italian Family SMEs” In: (a cura di): Comacchio A. and Pontiggia A., “L'organizzazione fa la differenza”, Roma: Carocci Editore, ISBN: 9788843045587
- Gnan, L. and Montemerlo, D., (2007), “Family-firm relationship in Italian SMEs: ownership and governance issues in a double-fold theoretical perspective” In: “Handbook of research on family business”, Elgar, ISBN: 978-1845424107
- Songini, L., Gnan, L., Morelli, C., Vola, P., (2015), “The why and how of managerialization of family businesses: evidences from Italy”, Piccola Impresa / Small Business, vol 1, DOI: 10.14596/pisb.179, pp 85-117
- Songini, L., Gnan, L., Malmi, T (2013), “The role and impact of accounting in family business”, Journal of Family Business Strategy, vol. 4, p. 71-83, ISSN: 1877-8585, DOI: 10.1016/j.jfbs.2013.04.002
- Gnan, L., Songini, L., (2014), “The glass ceiling in SMEs and its impact on firm managerialisation: a comparison between family and non-family SMEs”, International Journal of Business Governance And Ethics, vol. 9, ISSN: 1477-9048
- de Pedys, V. and Antonelli, A,. (2008) “Family office for family business”, Oxford management Publishing, ISBN 978-1-906728-01-4
- Poutziouris, P., (2001) “Understanding family firms”, in (Ed.) Adam, J., Institute of Directors, “The Growing Business Handbook”, London: Kogan Page, Chapter 6.3: pp. 9-15, 4th edition, ISBN 074943600X
- Levin, R. and Travis, V., (1987), “Small company finance: what the books don’t say”, Harvard Business Review, nov-dec: 87608
- Villalonga, B. and Amit, R., (2005), “How do family ownership, control and management affect firm value”, Journal of financial economics, 80: 385-417
- Wilson, R., (2013), “The family office Report”, FamilyOfficesGroup.com
- Amit, R. and Perl, R., (2012) “2012 Family Governance Report”, Wharton Global family Alliance, Wharton School, University of Pennsylvania
- Amit, R. and Lichtenstein, H., (2010), “Benchmarking the Single Family Office” Wharton Global Family Alliance, Wharton School, University of Pennsylvania
Suggested videos
- Introductory video: 4 Lessons from the Best Family Businesses
https://hbr.org/video/4660653966001/4-lessons-from-the-best-family-businesses
- Three circle model: importance of governance, setting goals, holistic leadership and caring for the interests of the family
https://www.youtube.com/watch?v=D85pqiL1tNM
- The unique strengths and weaknesses of family businesses today, contrasting it with the humble mom-and-pop store the term usually brings to mind
https://www.youtube.com/watch?v=suL-HkP-2Ts
- The topic of Building a Family Business That Lasts and provides viewers with four key points to walk away with
https://www.youtube.com/watch?v=vZ52w3wBP1U
- The key attention points and delicacies involved in preparing and transferring a business to the next generation
https://www.youtube.com/watch?v=Io9aWtuSEh4
- Family Business Governance: Family Constitution
https://www.youtube.com/watch?v=i5psd_84euA
- Family-owned companies need to be run with emotional, as well as professional leadership
https://www.youtube.com/watch?v=2bYo2Ph48_E
- Toward a theory of how some family firms nurture transgenerational entrepreneurship
https://www.youtube.com/watch?v=AzFginXvSrM
- Family Business Longevity
https://www.youtube.com/watch?v=uoHRNLuoYHM
- 5 Ways For Private Equity Firms to Raise Capital From Family Offices
https://www.youtube.com/watch?v=EX8TnQmOFyc
- Address the challenges faced by family businesses
https://www.youtube.com/watch?v=mItel08kE-Q
- Conflict in the Family Business
https://www.youtube.com/watch?v=CVILBwkMVxc
- Stories of Wasteful Conflict in Family Businesses
https://www.youtube.com/watch?v=elzfKRYw1yA
Case Discussions
Regular attending students are expected to be fully engaged in the entire learning process. Regular attending students are expected to:
- prepare the assigned readings of the cases before each class.
- prepare as a group work a PowerPoint presentation on the case, based on the specific assignment.
- come to class prepared to participate and to discuss to enhance the learning of the individual and the class.
On the web site of the course, students find for each case the relative assignment. Please carefully read the questions before the session and use them for preparing the PowerPoint presentation.
Each student will be involved in the class discussion on the cases and tie the assigned reading for the session. The objective is to bring all class members in the debate. The cases are designed to integrate the concepts from the case into the context of the course. The preparation and the discussion of the cases do not exclude the study of the theoretical concepts useful for the discussion of the cases themselves and the passing of the exam of the course.
With the cases' discussions in the CLASSROOM, each student will develop:
- The ability to set the parameters for the problem (key concepts from the case).
- A depth of knowledge about the case subject (understanding of material, excellent response to the observations of others).
- The ability to tie-in case with other course concepts.
- The ability to get others involved in the discussion.
To adequately discuss the cases, students do:
- Be prepared with facts and specific quotes from the case.
- Be prepared to comment, ask a question, or develop ideas about the case.
During the discussion, students do:
- Take a position on a question or a point.
- Ask clarifying questions.
- Help keep the discussion moving and on track.
- Help draw others into the discussion.
- Integrate theories and content from other cases.
During the discussion, students do not:
- Be unprepared and show your lack of knowledge.
- Monopolize the discussion.
- Make irrelevant comments.
- Be insensitive to other's desire to speak or to their opinions.
All the regular attending students are kindly invited to build up workgroups (MINIMUM 3 PERSONS – MAXIMUM 5 PERSONS). Each workgroup should prepare a PowerPoint presentation for each case. Into the first slide, the names of the students belonging to the group should be reported.
The structure of the presentation should follow the following outline:
- One or more introductory slides aimed at describing/reporting the story, the characters, all the necessary elements to define the context and the boundaries of the case clearly.
- One slide mentioning the questions of the assignment and underlining the learning goals of the case.
- One or more slides reporting the answers to each question of the assignment.
- One or more slides reporting the final remarks on the case.
- One closing slide about the lessons learned after the group discussion of the case.
How to prepare the PowerPoint presentation of the case?
Introduction – short presentation of case, short description of the problems and situations that should be coped with the discussion.
Diagnosis – Problem setting of the context and the situation. Description of the mains facts and elements connected with the concepts and models of Family Business. What went wrong, and which actions/situations, instead, were right? Which elements could be considered for the diagnosis?
Solution – Students should provide a possible answer to questions/problems related to the case and a viable and clear indication of how to approach the situation and how to solve it. The entire proposal should represent a consistent action plan in terms of behaviors and expected results.
Conclusions – Conclusions should not be longer than 300-500 words and should describe how the situation and the problem characterized the case, on how Family Business schemata might help to solve the case, and what the proposed solution might generate in terms of organizational consequences.
Lessons learned – At the end of the presentation elements/suggestions/advises that we "take home" from the case discussion should be identified and reported.
NOTE: During the case discussion, students should explicitly address the context and the different situations with concepts related to Family Business and with models and theories of this course.
Case Discussions' Class Participation
We believe that the best way to learn, especially about ODB, is to participate in your education actively. In this class, "participation" is defined in terms of quality contributions to class discussion and exercises. There are four pre-requisites for successful participation:
- Be here on time and prepared. If you are not here, you cannot contribute much to class discussion. If you need to miss class for a predictable reason (e.g., job interview, athletic competition), please notify us at least 24 hours in advance so that we can make arrangements for any in-class exercises and so that you can obtain the materials distributed during the class. Of course, we realize that in some cases unforeseeable emergencies arise. Although we will not directly penalize you for non-attendance, be aware that multiple absences will indirectly hurt you by preventing you from participating in class, thereby lowering your participation grade. To contribute to class discussion, you must come to class having carefully prepared all assignments (i.e., readings, cases, exercises).
- Be brave. Everyone in this class is smart, engaging, and has unique life experiences to share. You will get the most out of this course if you ask questions, voice opinions, and express your thoughts to one another. If you feel uncomfortable talking in class, please send me an e-mail or set up an appointment to talk with me early in the semester. We will do everything we can to accommodate each of your circumstances, but we can only do so if they are brought to our attention.
- Be courteous. Successful participation includes treating your classmates respectfully and professionally. Listen carefully to the comments and questions that your classmates voice. You may learn something new from their perspectives, and you will be able to avoid merely repeating something that another classmate has said earlier in the discussion. Also, it is perfectly acceptable for you to voice disagreement with an opinion provided by another student. The open debate often leads to the most thoughtful and informative class discussions. However, please express your argument in a kind and considerate manner.
- Be engaged. This class is "unplugged." Once class starts, all electronics (e.g., computers, cell phones, tablets, etc.) should be turned off and put away. If you need to use a device because of a language or disability issue, you need to secure permission at the beginning of the class. The misuse of an electronic device (e.g., surfing the web or texting) will adversely affect your grade.
To facilitate the visioning of its PowerPoint presentation in the classroom, each workgroup should take a personal computer with PowerPoint installed and an available VGA connection.
By the 8 pm of the day before of the case discussion, all regular attending students should send to the course's Instructors, attaching the case presentation prepared. ONLY STUDENTS WHO HAD HANDED OVER ALL THE CASE PRESENTATIONS WILL BE ADMITTED TO THE 1st EXAM AFTER THE COURSE.
Policy for Late Assignments
As in the business world, work must be received on time to receive full credit. If you are late on an assignment, your access to the Pre-Exam will be compromised. You are always welcome to hand in an assignment before its due date if you know that you will be busy as the due date approaches. If you think that you will not be able to complete an assignment by the stated due date, please speak with us in advance to make alternative arrangements. Our policy on late assignments will depend on the specific circumstances surrounding the problem, and thus may differ from student to student. Providing advance notice about a late assignment will minimize the penalty you receive on that assignment but does not guarantee that there will be no penalty for turning the assignment in late.
Other learning sources
Slides and other materials will be available under the course web site.
THE SLIDES DO NOT REPRESENT A SUPPORT FOR AN EFFECTIVE AND SUCCESSFUL PREPARATION TO THE EXAM OF THE COURSE. THEY REPRESENT ONLY A HELP TO FACILITATE THE TRANSFER OF THE KNOWLEDGE TO STUDENTS DURING THE LECTURES.
Attendance
Because of the concentrated nature of the MScBA program, attendance in class is crucial.
Students with less than 85% of attendance to lectures and case discussions (including arriving late or leaving early) will be required to prepare for the exam ALL the chapters of the textbook Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709 and ALL the cases discussed in classroom.
NOTE: Attendance to the first class session is mandatory. Important information about the course and the instructor's expectations are given during the first session. If you know that you will have to be absent for one session, please contact your instructor to ensure that absence from a session is acceptable.
Exam
The 1st exam after the course is a written exam (the 1st), while all the other exams will be oral exam.
In case of a written exam, the duration is about 3-4 hours and it includes:
- Case discussion - You may be given a case study to which some questions may pertain in order to lead the discussion. As you respond to the questions, please use specific content and theories (use names to identify theories and models) as the basis of your analysis. You will not receive credit for your personal opinions unless backed by theory, lecture, and/or text material. Also, describe how you see the content/theory applying to the situation. Your answers will be evaluated based upon both quantity and quality. Answers that are more complete and demonstrate a higher level of understanding and analysis will receive more points.
- Some questions directly connected to the course textbook – The questions could open, closed (multiple choice), or a combination of the both. You may be asked to discuss the models and the theories presented during the course. You will be asked to interpret some real incidents and to focus your attention to some specific theoretical issues.
1st exam after the course participation and exam grades registering on the booklet
Only regular attending students (85% of attendance to lectures and case discussions, including arriving late or leaving early) that have delivered the hard copies of ALL the case to the Instructors can take the 1st exam after the course with a format explicitly dedicated to them.
Only regular registered students on the DELPHI System will be allowed to register their grades.
The 1st exam grades will be registered after the official exam date; Teachers will communicate that date. It is compulsory to come on that date of the exam for registering the grade on the Delphi and the booklet.
Team Project
The purpose of the project is to give your team an opportunity to apply what has been learned in the course (through course lectures, readings, and case discussions) to problems in a family firm of your team's choice.
Class members, regular attending students, will work in teams of four (4) people.
To the Team Project, regular attending students will be allowed to achieve a -3/+3 extra points to the final grade of the 1st exam after the course. Only regular attending students, taking the 1st exam after the course will be accepted for the Team Project.
Your team should identify a family firm to study (Please, no student groups).
Your team is to gather information from people in the family firm through direct contact. You may supplement this information with data from the media, the organization's literature, and other secondary sources. You should identify a relatively recent problem to analyze (i.e., this should not be an historical account of a problem and the company's solution). You should focus your analysis by applying the concepts from the course. While it is acceptable to incorporate several concepts from the course, please aim for depth rather than breadth regarding the use of course concepts. Your goal is to diagnose the mechanisms that are causing the problem or issue of concern in the organization. Initially, you may notice many symptoms (for instance, a crisis after the succession, seemingly an unhealthy family culture, low family members’ commitment and involvement, governance issues, etc.), but your task is to get to the underlying reason for these symptoms. And beware, sometimes the initial symptoms we think we see are not what they appear to be.
There are three broad goals for this assignment:
- One goal of this assignment is obviously to take the initiative to make a positive contribution to a family firm.
- Another major goal is to provide an opportunity for you to learn more about family businesses first hand and to use your critical thinking and reflection skills to link your experience with this family firm to your learning in relation to family business theories.
- The final goal is to provide a forum for you to hone your skills as a team member and leader and to reflect on the learning gained from this team experience. Each team will make a presentation and write a paper that describes what you did for the family firm, what you learned about family business, and what you learned about working on a team.
To meet these broad goals, your team should answer the following questions in the assignments detailed below.
- What are the issues or problems facing the family firm?
- What course concepts can be applied to understand why this problem is occurring?
- What recommendations can you offer to help improve the family business functioning?
Deliverables of the Team Project:
- The project proposal is due to Instructors by the date of the 9th session of the course by 5 pm. It should include:
- the names of your group members
- your team name
- the name of the organization
- the name, contact information and level of your contact person
- the method you will use to gain access to the organization
- a brief description (one paragraph) of the problem facing the organization.
- Your written project is due to Instructors by the date of the 18th session of the course by 5 pm.
It should contain a maximum of 15 double spaced pages (1 cm margins, 12 point font). You will be penalized significantly for exceeding this limit. The limit does not include appendices, which you are free to use to provide charts, figures, or other background material not necessary in the main body of your analysis. However, appendices that are not directly referenced in the main text will not be read. LATE PROJECT WRITE-UPS WILL NOT BE ACCEPTED.
This written project should summarize what you did for/within the organization, what you have learned about organizational behavior, and what you have learned about working on a team.
Grading of the Team Project:
Your group project will be evaluated on the following criteria:
- Problem definition: How well (i.e., thoroughly and concisely) do you describe the organizational context, the relevant parties, and the factors that are important to the problem?
- Accurate and thorough use of course concepts.
- Integration of course concepts with information about the company and problem, i.e., how well do you integrate course concepts with information about the problem to illuminate the problem in a way that leads to solutions?
- Extent to which recommendations are consistent with analysis.
- Quality of written analysis.
Analytical Syllabus
|
# |
Agenda |
Lecture/ Case discussion |
Lecturer |
|
SECTION 1: Family firms: prevalence and relevance |
|||
|
1 |
Introduction of the course (Chapter 1: Zellweger, pages: 1-3) 1. Thematic focus 2. Intended audience 3. Structure and pedagogical tools Defining the family business (Chapter 2: Zellweger, pages: 4-22) 1. The distinction between family and nonfamily firms 2. Defining family business by type of family involvement 3. Circle models of family influence 4. Family firm identity 5. Family business definition |
Lecture |
GNAN |
|
2 |
Prevalence and economic contribution of family firms around the globe (Chapter 3: Zellweger, pages: 24-33) 1. Prevalence of family firms worldwide 2. Economic contribution of family firms 3. Institutional setting and the prevalence of family firms Strengths and weaknesses of family firms (Chapter 4: Zellweger, pages: 36-42) 1. Typical strengths of family firms 2. Typical weaknesses of family firms 3. Bivalent attributes of family firm characteristics CASE STUDY: More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45) |
Lecture and Case |
GNAN |
|
SECTION 2: Governance in the family firm |
|||
|
3 |
Governance in the family firm: premises, corporate and ownership governance (Chapter 5: Zellweger, pages: 46-72) 1. Why do family firms need governance? 2. Typical governance constellations in family firms 3. Performance implications of governance constellations 4. Untangling corporate, ownership, family governance 5. Corporate governance 6. Ownership governance |
Lecture |
GNAN |
|
4 |
Governance in the family firm: family governance (Chapter 5: Zellweger, pages: 73-105) 1. Family governance 2. Governance documents: code of conduct and family charter 3. Governance bodies: family assembly and family council 4. Integrated governance in family firms CASE STUDY: Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112) |
Lecture and Case |
GNAN |
|
SECTION 3: Strategic management in the family firm |
|||
|
5 |
Strategic management in the family business: competitive advantages and the agency perspective (Chapter 6: Zellweger, pages: 116-134) 1. Strategic decision making in family firms 2. Conceptualizing the competitive advantage of family firms 3. The agency perspective CASE STUDY: Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125) |
Lecture and Case |
GNAN |
|
6 |
Strategic management in the family business: RBV and OI perspectives (Chapter 6: Zellweger, pages: 137-163) 1. The resource-based perspective 2. The organizational identity perspective CASE STUDY: Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166) |
Lecture and Case |
GNAN |
|
7 |
Strategic management in the family business: institutional and paradox perspectives (Chapter 6: Zellweger, pages: 167-194) 1. The institutional perspective 2. The paradox perspective 3. Generic strategies for family firms 4. Tools for strategic management in family firms CASE STUDY: Managing paradoxes (Chapter 6: Zellweger, pages: 193-194) |
Lecture and Case |
GNAN |
|
SECTION 4: Succession in the family firm |
|||
|
8 |
Succession in the family firm: goals and processual issues (Chapter 7: Zellweger, pages: 203-234) 1. Succession options 2. Opportunities and challenges of succession options 3. Significance of succession options 4. Declining relevance of infra-family succession 5. Sources of complexity in family business succession 6. Structuring the succession process: succession framework 7. Clarifying goals and priorities |
Lecture |
GNAN |
|
9 |
Succession in the family firm: change strategy and who is in charge of the change (Chapter 7: Zellweger, pages: 240-254) 1. Reviewing the firm's strategy 2. Planning the transition of responsibilities |
Lecture |
GNAN |
|
10 |
Succession in the family firm: value, finance, legal, and tax issues (Chapter 7: Zellweger, pages: 258-305) 1. Valuing the firm 2. Financing the succession 3. Defining the legal and tax setup CASE STUDY: Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307) |
Lecture and Case |
GNAN |
|
SECTION 5: Change and transgenerational value creation |
|||
|
11 |
Change and transgenerational value creation (Chapter 8: Zellweger, pages: 311-356) 1. Change and adaptation in family firms 2. Longevity of family firms 3. Transgenerational value creation in family firms CASE STUDY: Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363) |
Lecture and Case |
GNAN |
|
SECTION 6: Interpersonal relationships and conflict in the family firm |
|||
|
12 |
Interpersonal relationships and conflict in the family firm: social issues, family values, and perceptions (Chapter 10: Zellweger, pages: 428-466) 1. The social structure of the family 2. Trends in the social structure of the family 3. International variance in family values 4. Understanding interpersonal dynamics in the family firm: a systemic view 5. Justice perceptions |
Lecture |
GNAN |
|
13 |
Interpersonal relationships and conflict in the family firm: managing conflicts (Chapter 10: Zellweger, pages: 468-487) 1. Why family firms are fertile contexts for conflict 2. Types of conflict 3. Conflict dynamics 4. Conflict-management styles 5. Communication strategies 6. How to behave in the face of conflict CASE STUDY: Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491) |
Lecture and Case |
GNAN |
|
SECTION 7: Financial management in the family firm |
|||
|
14 |
Financial management in the family firm: differences with no family firms (Chapter 9: Zellweger, pages: 368-379) 1. Why finance is different for family firms 2. Family equity as a distinct asset class 3. Performance of family firms: a short review of the evidence 4. Risk taking in family firms |
Lecture |
GNAN |
|
15 |
Financial management in the family firm: financial tools (Chapter 9: Zellweger, pages: 380-400) 1. Debt financing 2. Equity financing 3. Leverage 4. Value management 5. Key financial indicators 6. Dilemmas in the financial management of family firms |
Lecture |
GNAN |
|
16 |
Financial management in the family firm: financial sustainability (Chapter 9: Zellweger, pages: 402-407) 1. Principles for the sustainable financial management of family firms 2. The role of the CFO in family firms CASE STUDY: Tom’s world (Chapter 9: Zellweger, pages: 422-424) |
Lecture and Case |
GNAN |
|
17 |
Financial management in the family firm: compensations (Chapter 9: Zellweger, pages: 407-411) 1. Management compensation in family firms CASE STUDY: Medco Energi Internasional (HBS 9-207-021) |
Lecture and Case |
GNAN |
|
18 |
Financial management in the family firm: family offices (Chapter 9: Zellweger, pages: 412-417 and Chapter 5: Zellweger, pages: 83-89) 1. The responsible shareholder in the family firm 2. Wealth governance |
Lecture |
GNAN |
Updated A.Y. 2019-2020
FAMILY BUSINESS
(Prof. Luca Gnan)
Teaching Staff responsible for the Course:
Prof. Luca Gnan
Email: luca.gnan@uniroma2.it
Availability: Contact via email
Prof.ssa Giulia Flamini
E-mail: giulia.flamini@uniroma2.it
Availability: Contact via email
We are committed to making this course a valuable learning experience for you. After the first month, we will spend part of a class session evaluating our progress, and we will make any necessary changes to keep us on track. However, we welcome your feedback at any time in the semester. It is easiest to reach us by email or during office hours, but we are always happy to set up an appointment. Additionally, if you have a disability that requires special accommodation, please let us know ASAP so that we can be helpful to you.
Emails, Office Hours & Feedback on Assignments
We endeavor to answer emails within 1 day. If you have not heard from us within that time, please resend the email. We will post grades & comments online in the materials section of the course website. We will be happy to give feedback and discuss assignments after all grading is complete for a certain assignment. We schedule office hours by email request.
We may answer questions of assignment clarification in class and via emails to benefit the entire class. We may also give extra grades (see below Team Project) during the course that, while generally designed to support learning in the course, will also help your participation grade. These are pass/fail and do not include comments.
Pre-requisites for the Course:
None
Course description and Learning Objectives
Family businesses shows distinct core competencies that can result in unique competitive advantages. They take a long run view of the business—across generations, rather than publicly traded quarterly reports. Their capital can be very patient, owners will sacrifice their salaries in order to make payroll, and they are an integral part of their communities, unlike publicly traded counterparts that might abandon a community at the blink of a budget. They can engender a great deal of loyalty on the part of employees, and the existence of family may reduce agency problems.
Family Businesses also face challenges that threaten their continuity. The challenges are primarily the result of issues presented by the interaction of family, management, and ownership—particularly where the family wishes to perpetuate its influence and/or control from generation to generation. Family firms seem to be as agile in one generation as they are fragile across generations.
Family businesses start with an owner-managed first generation (usually an entrepreneur). The next generation—G2—is the sibling generation, and G3 is the cousin era. The probability of passing the company to the next generation diminishes significantly, with fewer than half making it to G2 and only about less than 15% making it to G3. So, despite the benefits of family, there can be some significant issues.
The course explores and analyzes continuity challenges of family business and their best management practices. The focus of this course is on pragmatic, action-oriented, management, governance, finance, and family/business leadership skills.
Attention is devoted to evaluating family firms and their growth options to provide a roadmap for analyzing how family ownership, control, and management affect performances and how family firms can create and ensure more value through generations.
The course presents seven different sections:
· SECTION 1: Family firms: prevalence and relevance
· SECTION 2: Governance in the family firm
· SECTION 3: Strategic management in the family firm
· SECTION 4: Succession in the family firm
· SECTION 5: Change and transgenerational value creation
· SECTION 6: Interpersonal relationships and conflict in the family firm
· SECTION 7: Financial management in the family firm
The course addresses the governance, the management, and the finance of established family businesses. It examines succession, values, life cycles, business and marketing strategies, conflict resolution, communications, legal, and financial aspects, estate planning, management, philanthropy and other topics that uniquely touch family business governance, management and finance. It will convey the characteristics that differentiate family businesses from other businesses.
One of the features, which make this course unique and particularly modern, is a part of the Section 7: Financial management in the family firm dedicated to the mysterious and fascinating world of the family office. This is the little-known, but key professional practice of advising entire families-in-business, frequently large, diversified and with wide ramifications, about the complete spectrum of activities necessary to ensure that wealth is created, preserved, transmitted and spread across the enlarged family community. These services range from asset allocation to risk management, to education, efficient tax structuring, corporate finance and corporate governance, intra- and inter- generational transmission, philanthropy, etc. Given the enormous amount of wealth and power concerned, this phenomenon shows increasingly importance and starts to attract some focus, particularly by the best graduate students and professional talents.
Upon completion of this course, students should understand:
- The unique assets and vulnerabilities of family enterprises.
- The role of the CEO in governance, management, and the transfer of power.
- The relationship between the role of the board, the family council, and top management in providing effective governance for family business continuity.
- Key family dynamics.
- The relevance for families to manage collectively wealth created in professional ways,
and be able to:
- Identify the various stakeholders and the role of trust among family members and their impact on succession and continuity.
- Discuss the developmental needs and challenges of next generation leaders.
- Analyze the effect of estate taxes on ownership transfer across generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses.
- Explain the importance of strategic planning to family business continuity.
- Explore the critical role and challenges that non-family managers play in family-owned operations.
- Analyze the impact of family culture, family communication, family conflict, and family unity and explore their interaction effects on the family business.
- Assess whether they want to seek employment in family businesses both as key employees/managers or in a professional advisory role.
Teaching methods
Lessons will focus on transferring knowledge and on a strong interaction within the classroom; there are analysis of situations problems and business cases in order to facilitate participants in learning.
Regular attending students (in order to be a regular attending student, a participant should achieve at least an 85% of presence to lectures and case discussions) are strongly recommended to participate to all the lectures and to all the preparations and presentations of the business cases.
To meet its goals, this course uses readings, lectures, exercises, cases, individual and team assignments, and class discussion. Case assignments provide an important foundation for class discussion and must completed prior to each class session. The analytical syllabus (at the end of this document) shows due dates for all cases and other assignments in the class schedule. Lectures will highlight key points from the readings and provide additional information to supplement the readings. Cases will provide you with the opportunity to apply what you have learned to real world issues and scenarios. Because each of you brings unique perspectives and experiences to the class, participation in class discussions and activities is essential to your own learning as well as that of other class members. To enrich further your learning, an MScBA Teaching Assistant will also match you.
Textbook
Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709
Cases
During the course, we will discuss 10 cases:
1. More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45)
2. Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112)
3. Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125)
4. Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166)
5. Managing paradoxes (Chapter 6: Zellweger, pages: 193-194)
6. Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307)
7. Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363)
8. Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491)
9. Tom’s world (Chapter 9: Zellweger, pages: 422-424)
(the following case from Harvard Business School Publishing. You need to register to download the cases at the following link: https://hbr.org, then download the case at the indicated link)
10. Medco Energi Internasional
Additional References
- Poza, E. J., “Family Business”, First Edition. Mason, OH: Thomson South-Western, 2004.
- Gnan, L. and Montemerlo, D., (2006), “Family-firm relationship in Italian SMEs: ownership and governance issues in a double-fold theoretical perspective”, in P. Z. Poutziouris P., Smyrnios, K. X., and Klein, S. B., “Handbook of research on family business”, Edward Elgar Publishing.
- Zattoni, A., Gnan, L., Huse, M., (2012) ,“Does Family Involvement Influence Firm Performance? Exploring the Mediating Effects of Board Processes and Tasks”, Journal Of Management, ISSN: 0149-2063, DOI: 10.1177/0149206312463936
- Gnan, L. and Songini, L., (2015), “Family involvement and agency cost control mechanisms in family small and medium-sized enterprises”, Journal Of Small Business Management, vol. 53, p. 748-779, ISSN: 0047-2778, DOI: 10.1111/jsbm.12085
- Gnan, L., Montemerlo, D., Huse, M. (2015), “Governance systems in family SMEs: the substitution effects between family councils and corporate governance mechanisms”, Journal of Small Business Management, p. 1-27, ISSN: 1540-627X, DOI: 10.1111/jsbm.12070
- Gnan, L., Montemerlo, D., Schulze, W., Corbetta, G., (2008), “Governance Structures in Italian Family SMEs” In: (a cura di): Comacchio A. and Pontiggia A., “L'organizzazione fa la differenza”, Roma: Carocci Editore, ISBN: 9788843045587
- Gnan, L. and Montemerlo, D., (2007), “Family-firm relationship in Italian SMEs: ownership and governance issues in a double-fold theoretical perspective” In: “Handbook of research on family business”, Elgar, ISBN: 978-1845424107
- Songini, L., Gnan, L., Morelli, C., Vola, P., (2015), “The why and how of managerialization of family businesses: evidences from Italy”, Piccola Impresa / Small Business, vol 1, DOI: 10.14596/pisb.179, pp 85-117
- Songini, L., Gnan, L., Malmi, T (2013), “The role and impact of accounting in family business”, Journal of Family Business Strategy, vol. 4, p. 71-83, ISSN: 1877-8585, DOI: 10.1016/j.jfbs.2013.04.002
- Gnan, L., Songini, L., (2014), “The glass ceiling in SMEs and its impact on firm managerialisation: a comparison between family and non-family SMEs”, International Journal of Business Governance And Ethics, vol. 9, ISSN: 1477-9048
- de Pedys, V. and Antonelli, A,. (2008) “Family office for family business”, Oxford management Publishing, ISBN 978-1-906728-01-4
- Poutziouris, P., (2001) “Understanding family firms”, in (Ed.) Adam, J., Institute of Directors, “The Growing Business Handbook”, London: Kogan Page, Chapter 6.3: pp. 9-15, 4th edition, ISBN 074943600X
- Levin, R. and Travis, V., (1987), “Small company finance: what the books don’t say”, Harvard Business Review, nov-dec: 87608
- Villalonga, B. and Amit, R., (2005), “How do family ownership, control and management affect firm value”, Journal of financial economics, 80: 385-417
- Wilson, R., (2013), “The family office Report”, FamilyOfficesGroup.com
- Amit, R. and Perl, R., (2012) “2012 Family Governance Report”, Wharton Global family Alliance, Wharton School, University of Pennsylvania
- Amit, R. and Lichtenstein, H., (2010), “Benchmarking the Single Family Office” Wharton Global Family Alliance, Wharton School, University of Pennsylvania
Suggested videos
1. Introductory video: 4 Lessons from the Best Family Businesses
https://hbr.org/video/4660653966001/4-lessons-from-the-best-family-businesses
2. Three circle model: importance of governance, setting goals, holistic leadership and caring for the interests of the family
https://www.youtube.com/watch?v=D85pqiL1tNM
3. The unique strengths and weaknesses of family businesses today, contrasting it with the humble mom-and-pop store the term usually brings to mind
https://www.youtube.com/watch?v=suL-HkP-2Ts
4. The topic of Building a Family Business That Lasts and provides viewers with four key points to walk away with
https://www.youtube.com/watch?v=vZ52w3wBP1U
5. The key attention points and delicacies involved in preparing and transferring a business to the next generation
https://www.youtube.com/watch?v=Io9aWtuSEh4
6. Family Business Governance: Family Constitution
https://www.youtube.com/watch?v=i5psd_84euA
7. Family-owned companies need to be run with emotional, as well as professional leadership
https://www.youtube.com/watch?v=2bYo2Ph48_E
8. Toward a theory of how some family firms nurture transgenerational entrepreneurship
https://www.youtube.com/watch?v=AzFginXvSrM
9. Family Business Longevity
https://www.youtube.com/watch?v=uoHRNLuoYHM
10. 5 Ways For Private Equity Firms to Raise Capital From Family Offices
https://www.youtube.com/watch?v=EX8TnQmOFyc
11. Address the challenges faced by family businesses
https://www.youtube.com/watch?v=mItel08kE-Q
12. Conflict in the Family Business
https://www.youtube.com/watch?v=CVILBwkMVxc
13. Stories of Wasteful Conflict in Family Businesses
https://www.youtube.com/watch?v=elzfKRYw1yA
Case Discussions
We expect that regular attending students are fully engaged in the entire learning process. This means that we expect regular attending students to:
1) prepare the assigned readings of the cases prior to each class;
2) prepare as a group work a PowerPoint presentation on the case, based on the specific assignment;
3) come to class prepared to participate and to discuss in order to enhance the learning of the individual and the class.
On the web site of the course, students find for each case the relative assignment. Please read carefully the questions before the lesson and use them for preparing the PowerPoint presentation.
Each student will be involved the class discussion on the cases and tie the assigned reading for the session. The objective is to bring all class members into the discussion. The cases intend to integrate the concepts from the case into the context of the course. The preparation and the discussion of the cases do not exclude the study of the theoretical concepts useful for the discussion of the cases themselves and for the passing of the exam of the course.
With the cases’ discussions in CLASSROOM, each student will develop:
1. The ability to set the parameters for the problem (key concepts from the case).
2. A depth of knowledge about the case subject (understanding of material, good response to the observations of others).
3. The ability to tie-in case with other course concepts.
4. The ability to get others involved in the discussion.
In order to discuss effectively the cases, students do:
· Be prepared with facts and specific quotes from the case.
· Be prepared to make a comment, ask a question, or make a statement about the case.
During the discussion, students do:
· Take a position on a question or a point.
- Ask clarifying questions.
· Help keep the discussion moving and on track.
· Help draw others into the discussion.
· Integrate theories and content from other cases.
During the discussion, students do not:
· Be unprepared and show your lack of knowledge.
- Monopolize the discussion.
- Make irrelevant comments.
· Be insensitive to other’s desire to speak or to their opinions.
We kindly invite all the regular attending students to build up work groups (MINIMUM 3 PERSONS – MAXIMUM 5 PERSONS). Each work group should prepare a PowerPoint presentation for each case. Into the first slide, each work group should report the names of the students belonging to the group.
The structure of the presentation should follow the following outline:
- One or more introductory slides aimed at describing/reporting the story, the characters, all the necessary elements in order to define clearly the context and the boundaries of the case.
- One slide mentioning the questions of the assignment and underlining the learning goals of the case.
- One or more slides reporting the answers to each question of the assignment.
- One or more slides reporting the final remarks on the case.
- One closing slide about the lessons learned after the group discussion of the case.
How to prepare the PowerPoint presentation of the case?
Introduction – short presentation of case, short description of the problems and situations that should be coped with the discussion.
Diagnosis – Problem setting of the context and of the situation. Description of the mains facts and elements connected with the concepts and models of Family Business (e.g. Ownership issues, conflicts, family culture, governance issues, leadership, managing people, succession, etc.). What went wrong and which actions/situations, instead, were right? Which elements could be considered for the diagnosis?
Solution – Students should provide a possible solution to questions/problems related with the case and a viable and clear indication on how to approach the situation and how to solve it. The entire proposal should represent a consistent action plan in terms of behaviors and expected results.
Conclusions – Conclusions should not be longer than 300-500 words and should provide a description on how the situation and the problem characterized the case, on how Family Business schemata might help to solve the case, and what the proposed solution might generate in terms of family and managerial consequences.
Lessons learned – At the end of the presentation elements/suggestions/advices that we “take home” from the case discussion should be clearly identified and reported.
NOTE: During the case discussion, students should explicitly address the context and the different situations with concepts related with Family Business and with models and theories of this course.
Case Discussions’ Class Participation
We believe that the best way to learn, especially about family Business, is to actively participate in your education. In this class, “participation” is defined in terms of quality contributions to class discussion and exercises. There are four prerequisites for successful participation:
1. Be here on time and prepared. If you are not here, you cannot contribute much to class discussion. If you need to miss class for a predictable reason (e.g., job interview, athletic competition), please notify us at least 24 hours in advance so that we can arrange for any in-class exercises and so that you can obtain the materials distributed during the class. Of course, we realize that in some cases unforeseeable emergencies arise. Although we will not directly penalize you for non-attendance, be aware that multiple absences will indirectly hurt you by preventing you from participating in class, thereby lowering your participation grade. To contribute to class discussion, you must come to class having carefully prepared all assignments (i.e., readings, cases, exercises).
2. Be brave. Everyone in this class is smart, interesting, and has unique life experiences to share. You will get the most out of this course if you ask questions, voice opinions, and express your thoughts to one another. If you feel uncomfortable talking in class, please send me an email or set up an appointment to talk with me early in the semester. We will do everything we can to accommodate each of your individual circumstances, but we can only do so if they are brought to our attention.
3. Be courteous. Successful participation includes treating your classmates in a respectful and professional manner. Listen carefully to the comments and questions that your classmates voice. You may learn something new from their perspectives, and you will be able to avoid simply repeating something that another classmate has said earlier in discussion. Also, it is perfectly acceptable for you to voice disagreement with an opinion provided by another student. Open debate often leads to the most thoughtful and informative class discussions. However, please voice your disagreement in a kind and considerate manner.
4. Be engaged. This class is “unplugged.” Once class starts, all electronics (e.g., computers, cell phones, tablets, etc.) should be turned off and put away. If you need to use a device because of a language or disability issue, you need to secure permission at the beginning of the class. The misuse of an electronic device (e.g., surfing the web or texting) will adversely affect your grade.
In order to facilitate the visioning of its own PowerPoint presentation in classroom, each work group should take a personal computer with PowerPoint installed and an available VGA connection.
By the 8pm of the day before of the case discussion, all regular attending students should send to the course’s Instructors, attaching the case presentation prepared. ONLY STUDENTS WHO HAD HANDED OVER ALL THE CASE PRESENTATIONS WILL BE ADMITTED TO THE PRE-EXAM.
Policy for Late Assignments
As in the business world, work must be received on time in order to receive full credit. If you are late on an assignment, your access to the Pre-Exam will be compromised. You are always welcome to hand in an assignment before its due date if you know that you will be busy as the due date approaches. If you think that you will not be able to complete an assignment by the stated due date, please speak with us in advance to make alternative arrangements. Our policy on late assignments will depend on the specific circumstances surrounding the problem, and thus may differ from student to student. Providing advance notice about a late assignment will minimize the penalty you receive on that assignment, but does not guarantee that there will be no penalty for turning the assignment in late.
Other learning sources
Slides and other material will be available on the course website.
THE SLIDES DO NOT REPRESENT A SUPPORT FOR AN EFFECTIVE AND SUCCESFUL PREPARATION TO THE EXAM OF THE COURSE. THEY REPRESENT ONLY A HELP TO FACILITATE THE TRANSFER OF THE KNOWLEDGES TO STUDENTS DURING THE LESSONS.
Attendance
Because of the concentrated nature of the MScBA programme, attendance in class is very important.
Students with less than 85% of attendance to lectures and case discussions (including arriving late or leaving early) will be required to prepare for the exam ALL the chapters of the textbook Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709 and ALL the cases discussed in classroom.
NOTE : Attendance for the first class session is mandatory as important information regarding the course and the instructors’ expectations are given. If you know in advance that you will be absent for one session, please contact your instructor to ensure that absence from a particular session is acceptable.
Exam
The exam, depending on the number of the registered student, is a written exam or an oral exam.
In case of a written exam, the duration is about 3-4 hours and it includes:
a) Case discussion - You may be given a case study to which some questions may pertain in order to lead the discussion. As you respond to the questions, please use specific content and theories (use names to identify theories and models) as the basis of your analysis. You will not receive credit for your personal opinions unless backed by theory, lecture, and/or text material. Also, describe how you see the content/theory applying to the situation. Your answers will be evaluated based upon both quantity and quality. Answers that are more complete and demonstrate a higher level of understanding and analysis will receive more points.
b) Some questions directly connected to the course textbook – The questions could open, closed (multiple choice), or a combination of the both. You may be asked to discuss the models and the theories presented during the course. You will be asked to interpret some real incidents and to focus your attention to some specific theoretical issues.
Pre-Exam participation and exam grades registering on the booklet
Only regular attending students (85% of attendance to lectures and case discussions, including arriving late or leaving early) that have delivered the hard copies of ALL the case to the Instructors are allowed to take the pre-exam.
Only regular registered students on the DELPHI System will be allowed to register their grade.
The pre-exam grades will be registered on the first official exam date AFTER THE COURSE ENDING. It is compulsory to come on that date of the exam for registering the grade on the Delphi and on the booklet.
Team Project
The purpose of the project is to give your team an opportunity to apply what has been learned in the course (through course lectures, readings, and case discussions) to problems in a family firm of your team's choice.
Class members, regular attending students, will work in teams of four (4) people.
To the Team Project regular attending students will be allowed to achieve a -3/+3 extra points to the final grade of the Pre-Exam. Only regular attending students, taking the Pre-Exam will be accepted for the Team Project.
Your team should identify a family firm to study (Please, no student groups).
Your team is to gather information from people in the family firm through direct contact. You may supplement this information with data from the media, the organization's literature, and other secondary sources. You should identify a relatively recent problem to analyze (i.e., this should not be an historical account of a problem and the company's solution). You should focus your analysis by applying the concepts from the course. While it is acceptable to incorporate several concepts from the course, please aim for depth rather than breadth regarding the use of course concepts. Your goal is to diagnose the mechanisms that are causing the problem or issue of concern in the organization. Initially, you may notice many symptoms (for instance, a crisis after the succession, seemingly an unhealthy family culture, low family members’ commitment and involvement, governance issues, etc.), but your task is to get to the underlying reason for these symptoms. And beware, sometimes the initial symptoms we think we see are not what they appear to be.
There are three broad goals for this assignment:
1. One goal of this assignment is obviously to take the initiative to make a positive contribution to a family firm.
2. Another major goal is to provide an opportunity for you to learn more about family businesses first hand and to use your critical thinking and reflection skills to link your experience with this family firm to your learning in relation to family business theories.
3. The final goal is to provide a forum for you to hone your skills as a team member and leader and to reflect on the learning gained from this team experience. Each team will make a presentation and write a paper that describes what you did for the family firm, what you learned about family business, and what you learned about working on a team.
To meet these broad goals, your team should answer the following questions in the assignments detailed below.
a) What are the issues or problems facing the family firm?
b) What course concepts can be applied to understand why this problem is occurring?
c) What recommendations can you offer to help improve the family business functioning?
Deliverables of the Team Project:
1. The project proposal e-mail is due by email to Instructors by the date of the 9th session of the course by 5pm. It should include:
a) The names of your group members
b) Your team name
c) The name of the organization
d) The name, contact information and level of your contact person
e) The method you will use to gain access to the organization
f) A brief description (one paragraph) of the problem facing the organization.
2. Your written project is due by email to Instructors by the date of the 18th session of the course by 5pm .
It should contain a maximum of 15 double spaced pages (1 cm margins, 12 point font). You will be penalized significantly for exceeding this limit. The limit does not include appendices, which you are free to use to provide charts, figures, or other background material not necessary in the main body of your analysis. However, appendices that are not directly referenced in the main text will not be read. LATE PROJECT WRITE-UPS WILL NOT BE ACCEPTED.
This written project should summarize what you did for/within the family firm, what you have learned about family business, and what you have learned about working on a team.
Grading of the Team Project:
Your group project will be evaluated on the following criteria:
a. Problem definition: How well (i.e., thoroughly and concisely) do you describe the family business context, the relevant parties, and the factors that are important to the problem?
b. Accurate and thorough use of course concepts.
c. Integration of course concepts with information about the family firm and problem, i.e., how well do you integrate course concepts with information about the problem to illuminate the problem in a way that leads to solutions?
d. Extent to which recommendations are consistent with analysis.
e. Quality of written analysis.
Analytical Syllabus
|
# |
Agenda |
Lecture/ Case discussion |
Lecturer |
|
SECTION 1: Family firms: prevalence and relevance |
|||
|
1 |
Introduction of the course (Chapter 1: Zellweger, pages: 1-3) 1. Thematic focus 2. Intended audience 3. Structure and pedagogical tools Defining the family business (Chapter 2: Zellweger, pages: 4-22) 1. The distinction between family and nonfamily firms 2. Defining family business by type of family involvement 3. Circle models of family influence 4. Family firm identity 5. Family business definition |
Lecture |
GNAN |
|
2 |
Prevalence and economic contribution of family firms around the globe (Chapter 3: Zellweger, pages: 24-33) 1. Prevalence of family firms worldwide 2. Economic contribution of family firms 3. Institutional setting and the prevalence of family firms Strengths and weaknesses of family firms (Chapter 4: Zellweger, pages: 36-42) 1. Typical strengths of family firms 2. Typical weaknesses of family firms 3. Bivalent attributes of family firm characteristics CASE STUDY: More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45) |
Lecture and Case |
GNAN |
|
SECTION 2: Governance in the family firm |
|||
|
3 |
Governance in the family firm: premises, corporate and ownership governance (Chapter 5: Zellweger, pages: 46-72) 1. Why do family firms need governance? 2. Typical governance constellations in family firms 3. Performance implications of governance constellations 4. Untangling corporate, ownership, family governance 5. Corporate governance 6. Ownership governance |
Lecture |
GNAN |
|
4 |
Governance in the family firm: family governance (Chapter 5: Zellweger, pages: 73-105) 1. Family governance 2. Governance documents: code of conduct and family charter 3. Governance bodies: family assembly and family council 4. Integrated governance in family firms CASE STUDY: Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112) |
Lecture and Case |
GNAN |
|
SECTION 3: Strategic management in the family firm |
|||
|
5 |
Strategic management in the family business: competitive advantages and the agency perspective (Chapter 6: Zellweger, pages: 116-134) 1. Strategic decision making in family firms 2. Conceptualizing the competitive advantage of family firms 3. The agency perspective CASE STUDY: Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125) |
Lecture and Case |
GNAN |
|
6 |
Strategic management in the family business: RBV and OI perspectives (Chapter 6: Zellweger, pages: 137-163) 1. The resource-based perspective 2. The organizational identity perspective CASE STUDY: Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166) |
Lecture and Case |
GNAN |
|
7 |
Strategic management in the family business: institutional and paradox perspectives (Chapter 6: Zellweger, pages: 167-194) 1. The institutional perspective 2. The paradox perspective 3. Generic strategies for family firms 4. Tools for strategic management in family firms CASE STUDY: Managing paradoxes (Chapter 6: Zellweger, pages: 193-194) |
Lecture and Case |
GNAN |
|
SECTION 4: Succession in the family firm |
|||
|
8 |
Succession in the family firm: goals and processual issues (Chapter 7: Zellweger, pages: 203-234) 1. Succession options 2. Opportunities and challenges of succession options 3. Significance of succession options 4. Declining relevance of infra-family succession 5. Sources of complexity in family business succession 6. Structuring the succession process: succession framework 7. Clarifying goals and priorities |
Lecture |
GNAN |
|
9 |
Succession in the family firm: change strategy and who is in charge of the change (Chapter 7: Zellweger, pages: 240-254) 1. Reviewing the firm's strategy 2. Planning the transition of responsibilities |
Lecture |
GNAN |
|
10 |
Succession in the family firm: value, finance, legal, and tax issues (Chapter 7: Zellweger, pages: 258-305) 1. Valuing the firm 2. Financing the succession 3. Defining the legal and tax setup CASE STUDY: Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307) |
Lecture and Case |
GNAN |
|
SECTION 5: Change and transgenerational value creation |
|||
|
11 |
Change and transgenerational value creation (Chapter 8: Zellweger, pages: 311-356) 1. Change and adaptation in family firms 2. Longevity of family firms 3. Transgenerational value creation in family firms CASE STUDY: Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363) |
Lecture and Case |
GNAN |
|
SECTION 6: Interpersonal relationships and conflict in the family firm |
|||
|
12 |
Interpersonal relationships and conflict in the family firm: social issues, family values, and perceptions (Chapter 10: Zellweger, pages: 428-466) 1. The social structure of the family 2. Trends in the social structure of the family 3. International variance in family values 4. Understanding interpersonal dynamics in the family firm: a systemic view 5. Justice perceptions |
Lecture |
GNAN |
|
13 |
Interpersonal relationships and conflict in the family firm: managing conflicts (Chapter 10: Zellweger, pages: 468-487) 1. Why family firms are fertile contexts for conflict 2. Types of conflict 3. Conflict dynamics 4. Conflict-management styles 5. Communication strategies 6. How to behave in the face of conflict CASE STUDY: Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491) |
Lecture and Case |
GNAN |
|
SECTION 7: Financial management in the family firm |
|||
|
14 |
|||
Updated A.Y. 2019-2020
FAMILY BUSINESS
(Prof. Luca Gnan)
Teaching Staff responsible for the Course:
Prof. Luca Gnan
Email: luca.gnan@uniroma2.it
Availability: Contact via email
Prof.ssa Giulia Flamini
E-mail: giulia.flamini@uniroma2.it
Availability: Contact via email
We are committed to making this course a valuable learning experience for you. After the first month, we will spend part of a class session evaluating our progress, and we will make any necessary changes to keep us on track. However, we welcome your feedback at any time in the semester. It is easiest to reach us by email or during office hours, but we are always happy to set up an appointment. Additionally, if you have a disability that requires special accommodation, please let us know ASAP so that we can be helpful to you.
Emails, Office Hours & Feedback on Assignments
We endeavor to answer emails within 1 day. If you have not heard from us within that time, please resend the email. We will post grades & comments online in the materials section of the course website. We will be happy to give feedback and discuss assignments after all grading is complete for a certain assignment. We schedule office hours by email request.
We may answer questions of assignment clarification in class and via emails to benefit the entire class. We may also give extra grades (see below Team Project) during the course that, while generally designed to support learning in the course, will also help your participation grade. These are pass/fail and do not include comments.
Pre-requisites for the Course:
None
Course description and Learning Objectives
Family businesses shows distinct core competencies that can result in unique competitive advantages. They take a long run view of the business—across generations, rather than publicly traded quarterly reports. Their capital can be very patient, owners will sacrifice their salaries in order to make payroll, and they are an integral part of their communities, unlike publicly traded counterparts that might abandon a community at the blink of a budget. They can engender a great deal of loyalty on the part of employees, and the existence of family may reduce agency problems.
Family Businesses also face challenges that threaten their continuity. The challenges are primarily the result of issues presented by the interaction of family, management, and ownership—particularly where the family wishes to perpetuate its influence and/or control from generation to generation. Family firms seem to be as agile in one generation as they are fragile across generations.
Family businesses start with an owner-managed first generation (usually an entrepreneur). The next generation—G2—is the sibling generation, and G3 is the cousin era. The probability of passing the company to the next generation diminishes significantly, with fewer than half making it to G2 and only about less than 15% making it to G3. So, despite the benefits of family, there can be some significant issues.
The course explores and analyzes continuity challenges of family business and their best management practices. The focus of this course is on pragmatic, action-oriented, management, governance, finance, and family/business leadership skills.
Attention is devoted to evaluating family firms and their growth options to provide a roadmap for analyzing how family ownership, control, and management affect performances and how family firms can create and ensure more value through generations.
The course presents seven different sections:
· SECTION 1: Family firms: prevalence and relevance
· SECTION 2: Governance in the family firm
· SECTION 3: Strategic management in the family firm
· SECTION 4: Succession in the family firm
· SECTION 5: Change and transgenerational value creation
· SECTION 6: Interpersonal relationships and conflict in the family firm
· SECTION 7: Financial management in the family firm
The course addresses the governance, the management, and the finance of established family businesses. It examines succession, values, life cycles, business and marketing strategies, conflict resolution, communications, legal, and financial aspects, estate planning, management, philanthropy and other topics that uniquely touch family business governance, management and finance. It will convey the characteristics that differentiate family businesses from other businesses.
One of the features, which make this course unique and particularly modern, is a part of the Section 7: Financial management in the family firm dedicated to the mysterious and fascinating world of the family office. This is the little-known, but key professional practice of advising entire families-in-business, frequently large, diversified and with wide ramifications, about the complete spectrum of activities necessary to ensure that wealth is created, preserved, transmitted and spread across the enlarged family community. These services range from asset allocation to risk management, to education, efficient tax structuring, corporate finance and corporate governance, intra- and inter- generational transmission, philanthropy, etc. Given the enormous amount of wealth and power concerned, this phenomenon shows increasingly importance and starts to attract some focus, particularly by the best graduate students and professional talents.
Upon completion of this course, students should understand:
- The unique assets and vulnerabilities of family enterprises.
- The role of the CEO in governance, management, and the transfer of power.
- The relationship between the role of the board, the family council, and top management in providing effective governance for family business continuity.
- Key family dynamics.
- The relevance for families to manage collectively wealth created in professional ways,
and be able to:
- Identify the various stakeholders and the role of trust among family members and their impact on succession and continuity.
- Discuss the developmental needs and challenges of next generation leaders.
- Analyze the effect of estate taxes on ownership transfer across generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses.
- Explain the importance of strategic planning to family business continuity.
- Explore the critical role and challenges that non-family managers play in family-owned operations.
- Analyze the impact of family culture, family communication, family conflict, and family unity and explore their interaction effects on the family business.
- Assess whether they want to seek employment in family businesses both as key employees/managers or in a professional advisory role.
Teaching methods
Lessons will focus on transferring knowledge and on a strong interaction within the classroom; there are analysis of situations problems and business cases in order to facilitate participants in learning.
Regular attending students (in order to be a regular attending student, a participant should achieve at least an 85% of presence to lectures and case discussions) are strongly recommended to participate to all the lectures and to all the preparations and presentations of the business cases.
To meet its goals, this course uses readings, lectures, exercises, cases, individual and team assignments, and class discussion. Case assignments provide an important foundation for class discussion and must completed prior to each class session. The analytical syllabus (at the end of this document) shows due dates for all cases and other assignments in the class schedule. Lectures will highlight key points from the readings and provide additional information to supplement the readings. Cases will provide you with the opportunity to apply what you have learned to real world issues and scenarios. Because each of you brings unique perspectives and experiences to the class, participation in class discussions and activities is essential to your own learning as well as that of other class members. To enrich further your learning, an MScBA Teaching Assistant will also match you.
Textbook
Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709
Cases
During the course, we will discuss 10 cases:
1. More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45)
2. Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112)
3. Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125)
4. Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166)
5. Managing paradoxes (Chapter 6: Zellweger, pages: 193-194)
6. Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307)
7. Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363)
8. Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491)
9. Tom’s world (Chapter 9: Zellweger, pages: 422-424)
(the following case from Harvard Business School Publishing. You need to register to download the cases at the following link: https://hbr.org, then download the case at the indicated link)
10. Medco Energi Internasional
Additional References
- Poza, E. J., “Family Business”, First Edition. Mason, OH: Thomson South-Western, 2004.
- Gnan, L. and Montemerlo, D., (2006), “Family-firm relationship in Italian SMEs: ownership and governance issues in a double-fold theoretical perspective”, in P. Z. Poutziouris P., Smyrnios, K. X., and Klein, S. B., “Handbook of research on family business”, Edward Elgar Publishing.
- Zattoni, A., Gnan, L., Huse, M., (2012) ,“Does Family Involvement Influence Firm Performance? Exploring the Mediating Effects of Board Processes and Tasks”, Journal Of Management, ISSN: 0149-2063, DOI: 10.1177/0149206312463936
- Gnan, L. and Songini, L., (2015), “Family involvement and agency cost control mechanisms in family small and medium-sized enterprises”, Journal Of Small Business Management, vol. 53, p. 748-779, ISSN: 0047-2778, DOI: 10.1111/jsbm.12085
- Gnan, L., Montemerlo, D., Huse, M. (2015), “Governance systems in family SMEs: the substitution effects between family councils and corporate governance mechanisms”, Journal of Small Business Management, p. 1-27, ISSN: 1540-627X, DOI: 10.1111/jsbm.12070
- Gnan, L., Montemerlo, D., Schulze, W., Corbetta, G., (2008), “Governance Structures in Italian Family SMEs” In: (a cura di): Comacchio A. and Pontiggia A., “L'organizzazione fa la differenza”, Roma: Carocci Editore, ISBN: 9788843045587
- Gnan, L. and Montemerlo, D., (2007), “Family-firm relationship in Italian SMEs: ownership and governance issues in a double-fold theoretical perspective” In: “Handbook of research on family business”, Elgar, ISBN: 978-1845424107
- Songini, L., Gnan, L., Morelli, C., Vola, P., (2015), “The why and how of managerialization of family businesses: evidences from Italy”, Piccola Impresa / Small Business, vol 1, DOI: 10.14596/pisb.179, pp 85-117
- Songini, L., Gnan, L., Malmi, T (2013), “The role and impact of accounting in family business”, Journal of Family Business Strategy, vol. 4, p. 71-83, ISSN: 1877-8585, DOI: 10.1016/j.jfbs.2013.04.002
- Gnan, L., Songini, L., (2014), “The glass ceiling in SMEs and its impact on firm managerialisation: a comparison between family and non-family SMEs”, International Journal of Business Governance And Ethics, vol. 9, ISSN: 1477-9048
- de Pedys, V. and Antonelli, A,. (2008) “Family office for family business”, Oxford management Publishing, ISBN 978-1-906728-01-4
- Poutziouris, P., (2001) “Understanding family firms”, in (Ed.) Adam, J., Institute of Directors, “The Growing Business Handbook”, London: Kogan Page, Chapter 6.3: pp. 9-15, 4th edition, ISBN 074943600X
- Levin, R. and Travis, V., (1987), “Small company finance: what the books don’t say”, Harvard Business Review, nov-dec: 87608
- Villalonga, B. and Amit, R., (2005), “How do family ownership, control and management affect firm value”, Journal of financial economics, 80: 385-417
- Wilson, R., (2013), “The family office Report”, FamilyOfficesGroup.com
- Amit, R. and Perl, R., (2012) “2012 Family Governance Report”, Wharton Global family Alliance, Wharton School, University of Pennsylvania
- Amit, R. and Lichtenstein, H., (2010), “Benchmarking the Single Family Office” Wharton Global Family Alliance, Wharton School, University of Pennsylvania
Suggested videos
1. Introductory video: 4 Lessons from the Best Family Businesses
https://hbr.org/video/4660653966001/4-lessons-from-the-best-family-businesses
2. Three circle model: importance of governance, setting goals, holistic leadership and caring for the interests of the family
https://www.youtube.com/watch?v=D85pqiL1tNM
3. The unique strengths and weaknesses of family businesses today, contrasting it with the humble mom-and-pop store the term usually brings to mind
https://www.youtube.com/watch?v=suL-HkP-2Ts
4. The topic of Building a Family Business That Lasts and provides viewers with four key points to walk away with
https://www.youtube.com/watch?v=vZ52w3wBP1U
5. The key attention points and delicacies involved in preparing and transferring a business to the next generation
https://www.youtube.com/watch?v=Io9aWtuSEh4
6. Family Business Governance: Family Constitution
https://www.youtube.com/watch?v=i5psd_84euA
7. Family-owned companies need to be run with emotional, as well as professional leadership
https://www.youtube.com/watch?v=2bYo2Ph48_E
8. Toward a theory of how some family firms nurture transgenerational entrepreneurship
https://www.youtube.com/watch?v=AzFginXvSrM
9. Family Business Longevity
https://www.youtube.com/watch?v=uoHRNLuoYHM
10. 5 Ways For Private Equity Firms to Raise Capital From Family Offices
https://www.youtube.com/watch?v=EX8TnQmOFyc
11. Address the challenges faced by family businesses
https://www.youtube.com/watch?v=mItel08kE-Q
12. Conflict in the Family Business
https://www.youtube.com/watch?v=CVILBwkMVxc
13. Stories of Wasteful Conflict in Family Businesses
https://www.youtube.com/watch?v=elzfKRYw1yA
Case Discussions
We expect that regular attending students are fully engaged in the entire learning process. This means that we expect regular attending students to:
1) prepare the assigned readings of the cases prior to each class;
2) prepare as a group work a PowerPoint presentation on the case, based on the specific assignment;
3) come to class prepared to participate and to discuss in order to enhance the learning of the individual and the class.
On the web site of the course, students find for each case the relative assignment. Please read carefully the questions before the lesson and use them for preparing the PowerPoint presentation.
Each student will be involved the class discussion on the cases and tie the assigned reading for the session. The objective is to bring all class members into the discussion. The cases intend to integrate the concepts from the case into the context of the course. The preparation and the discussion of the cases do not exclude the study of the theoretical concepts useful for the discussion of the cases themselves and for the passing of the exam of the course.
With the cases’ discussions in CLASSROOM, each student will develop:
1. The ability to set the parameters for the problem (key concepts from the case).
2. A depth of knowledge about the case subject (understanding of material, good response to the observations of others).
3. The ability to tie-in case with other course concepts.
4. The ability to get others involved in the discussion.
In order to discuss effectively the cases, students do:
· Be prepared with facts and specific quotes from the case.
· Be prepared to make a comment, ask a question, or make a statement about the case.
During the discussion, students do:
· Take a position on a question or a point.
- Ask clarifying questions.
· Help keep the discussion moving and on track.
· Help draw others into the discussion.
· Integrate theories and content from other cases.
During the discussion, students do not:
· Be unprepared and show your lack of knowledge.
- Monopolize the discussion.
- Make irrelevant comments.
· Be insensitive to other’s desire to speak or to their opinions.
We kindly invite all the regular attending students to build up work groups (MINIMUM 3 PERSONS – MAXIMUM 5 PERSONS). Each work group should prepare a PowerPoint presentation for each case. Into the first slide, each work group should report the names of the students belonging to the group.
The structure of the presentation should follow the following outline:
- One or more introductory slides aimed at describing/reporting the story, the characters, all the necessary elements in order to define clearly the context and the boundaries of the case.
- One slide mentioning the questions of the assignment and underlining the learning goals of the case.
- One or more slides reporting the answers to each question of the assignment.
- One or more slides reporting the final remarks on the case.
- One closing slide about the lessons learned after the group discussion of the case.
How to prepare the PowerPoint presentation of the case?
Introduction – short presentation of case, short description of the problems and situations that should be coped with the discussion.
Diagnosis – Problem setting of the context and of the situation. Description of the mains facts and elements connected with the concepts and models of Family Business (e.g. Ownership issues, conflicts, family culture, governance issues, leadership, managing people, succession, etc.). What went wrong and which actions/situations, instead, were right? Which elements could be considered for the diagnosis?
Solution – Students should provide a possible solution to questions/problems related with the case and a viable and clear indication on how to approach the situation and how to solve it. The entire proposal should represent a consistent action plan in terms of behaviors and expected results.
Conclusions – Conclusions should not be longer than 300-500 words and should provide a description on how the situation and the problem characterized the case, on how Family Business schemata might help to solve the case, and what the proposed solution might generate in terms of family and managerial consequences.
Lessons learned – At the end of the presentation elements/suggestions/advices that we “take home” from the case discussion should be clearly identified and reported.
NOTE: During the case discussion, students should explicitly address the context and the different situations with concepts related with Family Business and with models and theories of this course.
Case Discussions’ Class Participation
We believe that the best way to learn, especially about family Business, is to actively participate in your education. In this class, “participation” is defined in terms of quality contributions to class discussion and exercises. There are four prerequisites for successful participation:
1. Be here on time and prepared. If you are not here, you cannot contribute much to class discussion. If you need to miss class for a predictable reason (e.g., job interview, athletic competition), please notify us at least 24 hours in advance so that we can arrange for any in-class exercises and so that you can obtain the materials distributed during the class. Of course, we realize that in some cases unforeseeable emergencies arise. Although we will not directly penalize you for non-attendance, be aware that multiple absences will indirectly hurt you by preventing you from participating in class, thereby lowering your participation grade. To contribute to class discussion, you must come to class having carefully prepared all assignments (i.e., readings, cases, exercises).
2. Be brave. Everyone in this class is smart, interesting, and has unique life experiences to share. You will get the most out of this course if you ask questions, voice opinions, and express your thoughts to one another. If you feel uncomfortable talking in class, please send me an email or set up an appointment to talk with me early in the semester. We will do everything we can to accommodate each of your individual circumstances, but we can only do so if they are brought to our attention.
3. Be courteous. Successful participation includes treating your classmates in a respectful and professional manner. Listen carefully to the comments and questions that your classmates voice. You may learn something new from their perspectives, and you will be able to avoid simply repeating something that another classmate has said earlier in discussion. Also, it is perfectly acceptable for you to voice disagreement with an opinion provided by another student. Open debate often leads to the most thoughtful and informative class discussions. However, please voice your disagreement in a kind and considerate manner.
4. Be engaged. This class is “unplugged.” Once class starts, all electronics (e.g., computers, cell phones, tablets, etc.) should be turned off and put away. If you need to use a device because of a language or disability issue, you need to secure permission at the beginning of the class. The misuse of an electronic device (e.g., surfing the web or texting) will adversely affect your grade.
In order to facilitate the visioning of its own PowerPoint presentation in classroom, each work group should take a personal computer with PowerPoint installed and an available VGA connection.
By the 8pm of the day before of the case discussion, all regular attending students should send to the course’s Instructors, attaching the case presentation prepared. ONLY STUDENTS WHO HAD HANDED OVER ALL THE CASE PRESENTATIONS WILL BE ADMITTED TO THE PRE-EXAM.
Policy for Late Assignments
As in the business world, work must be received on time in order to receive full credit. If you are late on an assignment, your access to the Pre-Exam will be compromised. You are always welcome to hand in an assignment before its due date if you know that you will be busy as the due date approaches. If you think that you will not be able to complete an assignment by the stated due date, please speak with us in advance to make alternative arrangements. Our policy on late assignments will depend on the specific circumstances surrounding the problem, and thus may differ from student to student. Providing advance notice about a late assignment will minimize the penalty you receive on that assignment, but does not guarantee that there will be no penalty for turning the assignment in late.
Other learning sources
Slides and other material will be available on the course website.
THE SLIDES DO NOT REPRESENT A SUPPORT FOR AN EFFECTIVE AND SUCCESFUL PREPARATION TO THE EXAM OF THE COURSE. THEY REPRESENT ONLY A HELP TO FACILITATE THE TRANSFER OF THE KNOWLEDGES TO STUDENTS DURING THE LESSONS.
Attendance
Because of the concentrated nature of the MScBA programme, attendance in class is very important.
Students with less than 85% of attendance to lectures and case discussions (including arriving late or leaving early) will be required to prepare for the exam ALL the chapters of the textbook Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709 and ALL the cases discussed in classroom.
NOTE : Attendance for the first class session is mandatory as important information regarding the course and the instructors’ expectations are given. If you know in advance that you will be absent for one session, please contact your instructor to ensure that absence from a particular session is acceptable.
Exam
The exam, depending on the number of the registered student, is a written exam or an oral exam.
In case of a written exam, the duration is about 3-4 hours and it includes:
a) Case discussion - You may be given a case study to which some questions may pertain in order to lead the discussion. As you respond to the questions, please use specific content and theories (use names to identify theories and models) as the basis of your analysis. You will not receive credit for your personal opinions unless backed by theory, lecture, and/or text material. Also, describe how you see the content/theory applying to the situation. Your answers will be evaluated based upon both quantity and quality. Answers that are more complete and demonstrate a higher level of understanding and analysis will receive more points.
b) Some questions directly connected to the course textbook – The questions could open, closed (multiple choice), or a combination of the both. You may be asked to discuss the models and the theories presented during the course. You will be asked to interpret some real incidents and to focus your attention to some specific theoretical issues.
Pre-Exam participation and exam grades registering on the booklet
Only regular attending students (85% of attendance to lectures and case discussions, including arriving late or leaving early) that have delivered the hard copies of ALL the case to the Instructors are allowed to take the pre-exam.
Only regular registered students on the DELPHI System will be allowed to register their grade.
The pre-exam grades will be registered on the first official exam date AFTER THE COURSE ENDING. It is compulsory to come on that date of the exam for registering the grade on the Delphi and on the booklet.
Team Project
The purpose of the project is to give your team an opportunity to apply what has been learned in the course (through course lectures, readings, and case discussions) to problems in a family firm of your team's choice.
Class members, regular attending students, will work in teams of four (4) people.
To the Team Project regular attending students will be allowed to achieve a -3/+3 extra points to the final grade of the Pre-Exam. Only regular attending students, taking the Pre-Exam will be accepted for the Team Project.
Your team should identify a family firm to study (Please, no student groups).
Your team is to gather information from people in the family firm through direct contact. You may supplement this information with data from the media, the organization's literature, and other secondary sources. You should identify a relatively recent problem to analyze (i.e., this should not be an historical account of a problem and the company's solution). You should focus your analysis by applying the concepts from the course. While it is acceptable to incorporate several concepts from the course, please aim for depth rather than breadth regarding the use of course concepts. Your goal is to diagnose the mechanisms that are causing the problem or issue of concern in the organization. Initially, you may notice many symptoms (for instance, a crisis after the succession, seemingly an unhealthy family culture, low family members’ commitment and involvement, governance issues, etc.), but your task is to get to the underlying reason for these symptoms. And beware, sometimes the initial symptoms we think we see are not what they appear to be.
There are three broad goals for this assignment:
1. One goal of this assignment is obviously to take the initiative to make a positive contribution to a family firm.
2. Another major goal is to provide an opportunity for you to learn more about family businesses first hand and to use your critical thinking and reflection skills to link your experience with this family firm to your learning in relation to family business theories.
3. The final goal is to provide a forum for you to hone your skills as a team member and leader and to reflect on the learning gained from this team experience. Each team will make a presentation and write a paper that describes what you did for the family firm, what you learned about family business, and what you learned about working on a team.
To meet these broad goals, your team should answer the following questions in the assignments detailed below.
a) What are the issues or problems facing the family firm?
b) What course concepts can be applied to understand why this problem is occurring?
c) What recommendations can you offer to help improve the family business functioning?
Deliverables of the Team Project:
1. The project proposal e-mail is due by email to Instructors by the date of the 9th session of the course by 5pm. It should include:
a) The names of your group members
b) Your team name
c) The name of the organization
d) The name, contact information and level of your contact person
e) The method you will use to gain access to the organization
f) A brief description (one paragraph) of the problem facing the organization.
2. Your written project is due by email to Instructors by the date of the 18th session of the course by 5pm .
It should contain a maximum of 15 double spaced pages (1 cm margins, 12 point font). You will be penalized significantly for exceeding this limit. The limit does not include appendices, which you are free to use to provide charts, figures, or other background material not necessary in the main body of your analysis. However, appendices that are not directly referenced in the main text will not be read. LATE PROJECT WRITE-UPS WILL NOT BE ACCEPTED.
This written project should summarize what you did for/within the family firm, what you have learned about family business, and what you have learned about working on a team.
Grading of the Team Project:
Your group project will be evaluated on the following criteria:
a. Problem definition: How well (i.e., thoroughly and concisely) do you describe the family business context, the relevant parties, and the factors that are important to the problem?
b. Accurate and thorough use of course concepts.
c. Integration of course concepts with information about the family firm and problem, i.e., how well do you integrate course concepts with information about the problem to illuminate the problem in a way that leads to solutions?
d. Extent to which recommendations are consistent with analysis.
e. Quality of written analysis.
Analytical Syllabus
|
# |
Agenda |
Lecture/ Case discussion |
Lecturer |
|
SECTION 1: Family firms: prevalence and relevance |
|||
|
1 |
Introduction of the course (Chapter 1: Zellweger, pages: 1-3) 1. Thematic focus 2. Intended audience 3. Structure and pedagogical tools Defining the family business (Chapter 2: Zellweger, pages: 4-22) 1. The distinction between family and nonfamily firms 2. Defining family business by type of family involvement 3. Circle models of family influence 4. Family firm identity 5. Family business definition |
Lecture |
GNAN |
|
2 |
Prevalence and economic contribution of family firms around the globe (Chapter 3: Zellweger, pages: 24-33) 1. Prevalence of family firms worldwide 2. Economic contribution of family firms 3. Institutional setting and the prevalence of family firms Strengths and weaknesses of family firms (Chapter 4: Zellweger, pages: 36-42) 1. Typical strengths of family firms 2. Typical weaknesses of family firms 3. Bivalent attributes of family firm characteristics CASE STUDY: More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45) |
Lecture and Case |
GNAN |
|
SECTION 2: Governance in the family firm |
|||
|
3 |
Governance in the family firm: premises, corporate and ownership governance (Chapter 5: Zellweger, pages: 46-72) 1. Why do family firms need governance? 2. Typical governance constellations in family firms 3. Performance implications of governance constellations 4. Untangling corporate, ownership, family governance 5. Corporate governance 6. Ownership governance |
Lecture |
GNAN |
|
4 |
Governance in the family firm: family governance (Chapter 5: Zellweger, pages: 73-105) 1. Family governance 2. Governance documents: code of conduct and family charter 3. Governance bodies: family assembly and family council 4. Integrated governance in family firms CASE STUDY: Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112) |
Lecture and Case |
GNAN |
|
SECTION 3: Strategic management in the family firm |
|||
|
5 |
Strategic management in the family business: competitive advantages and the agency perspective (Chapter 6: Zellweger, pages: 116-134) 1. Strategic decision making in family firms 2. Conceptualizing the competitive advantage of family firms 3. The agency perspective CASE STUDY: Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125) |
Lecture and Case |
GNAN |
|
6 |
Strategic management in the family business: RBV and OI perspectives (Chapter 6: Zellweger, pages: 137-163) 1. The resource-based perspective 2. The organizational identity perspective CASE STUDY: Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166) |
Lecture and Case |
GNAN |
|
7 |
Strategic management in the family business: institutional and paradox perspectives (Chapter 6: Zellweger, pages: 167-194) 1. The institutional perspective 2. The paradox perspective 3. Generic strategies for family firms 4. Tools for strategic management in family firms CASE STUDY: Managing paradoxes (Chapter 6: Zellweger, pages: 193-194) |
Lecture and Case |
GNAN |
|
SECTION 4: Succession in the family firm |
|||
|
8 |
Succession in the family firm: goals and processual issues (Chapter 7: Zellweger, pages: 203-234) 1. Succession options 2. Opportunities and challenges of succession options 3. Significance of succession options 4. Declining relevance of infra-family succession 5. Sources of complexity in family business succession 6. Structuring the succession process: succession framework 7. Clarifying goals and priorities |
Lecture |
GNAN |
|
9 |
Succession in the family firm: change strategy and who is in charge of the change (Chapter 7: Zellweger, pages: 240-254) 1. Reviewing the firm's strategy 2. Planning the transition of responsibilities |
Lecture |
GNAN |
|
10 |
Succession in the family firm: value, finance, legal, and tax issues (Chapter 7: Zellweger, pages: 258-305) 1. Valuing the firm 2. Financing the succession 3. Defining the legal and tax setup CASE STUDY: Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307) |
Lecture and Case |
GNAN |
|
SECTION 5: Change and transgenerational value creation |
|||
|
11 |
Change and transgenerational value creation (Chapter 8: Zellweger, pages: 311-356) 1. Change and adaptation in family firms 2. Longevity of family firms 3. Transgenerational value creation in family firms CASE STUDY: Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363) |
Lecture and Case |
GNAN |
|
SECTION 6: Interpersonal relationships and conflict in the family firm |
|||
|
12 |
Interpersonal relationships and conflict in the family firm: social issues, family values, and perceptions (Chapter 10: Zellweger, pages: 428-466) 1. The social structure of the family 2. Trends in the social structure of the family 3. International variance in family values 4. Understanding interpersonal dynamics in the family firm: a systemic view 5. Justice perceptions |
Lecture |
GNAN |
|
13 |
Interpersonal relationships and conflict in the family firm: managing conflicts (Chapter 10: Zellweger, pages: 468-487) 1. Why family firms are fertile contexts for conflict 2. Types of conflict 3. Conflict dynamics 4. Conflict-management styles 5. Communication strategies 6. How to behave in the face of conflict CASE STUDY: Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491) |
Lecture and Case |
GNAN |
|
SECTION 7: Financial management in the family firm |
|||
|
14 |
|||
Updated A.Y. 2018-2019
FAMILY BUSINESS
(Prof. Luca Gnan)
Teaching Staff responsible for the Course:
Prof. Luca Gnan
Email: luca.gnan@uniroma2.it
Availability: Contact via email
Prof.ssa Giulia Flamini
E-mail: giulia.flamini@uniroma2.it
Availability: Contact via email
We are committed to making this course a valuable learning experience for you. After the first month, we will spend part of a class session evaluating our progress, and we will make any necessary changes to keep us on track. However, we welcome your feedback at any time in the semester. It is easiest to reach us by email or during office hours, but we are always happy to set up an appointment. Additionally, if you have a disability that requires special accommodation, please let us know ASAP so that we can be helpful to you.
Emails, Office Hours & Feedback on Assignments
We endeavor to answer emails within 1 day. If you have not heard from us within that time, please resend the email. We will post grades & comments online in the materials section of the course website. We will be happy to give feedback and discuss assignments after all grading is complete for a certain assignment. We schedule office hours by email request.
We may answer questions of assignment clarification in class and via emails to benefit the entire class. We may also give extra grades (see below Team Project) during the course that, while generally designed to support learning in the course, will also help your participation grade. These are pass/fail and do not include comments.
Pre-requisites for the Course:
None
Course description and Learning Objectives
Family businesses shows distinct core competencies that can result in unique competitive advantages. They take a long run view of the business—across generations, rather than publicly traded quarterly reports. Their capital can be very patient, owners will sacrifice their salaries in order to make payroll, and they are an integral part of their communities, unlike publicly traded counterparts that might abandon a community at the blink of a budget. They can engender a great deal of loyalty on the part of employees, and the existence of family may reduce agency problems.
Family Businesses also face challenges that threaten their continuity. The challenges are primarily the result of issues presented by the interaction of family, management, and ownership—particularly where the family wishes to perpetuate its influence and/or control from generation to generation. Family firms seem to be as agile in one generation as they are fragile across generations.
Family businesses start with an owner-managed first generation (usually an entrepreneur). The next generation—G2—is the sibling generation, and G3 is the cousin era. The probability of passing the company to the next generation diminishes significantly, with fewer than half making it to G2 and only about less than 15% making it to G3. So, despite the benefits of family, there can be some significant issues.
The course explores and analyzes continuity challenges of family business and their best management practices. The focus of this course is on pragmatic, action-oriented, management, governance, finance, and family/business leadership skills.
Attention is devoted to evaluating family firms and their growth options to provide a roadmap for analyzing how family ownership, control, and management affect performances and how family firms can create and ensure more value through generations.
The course presents seven different sections:
· SECTION 1: Family firms: prevalence and relevance
· SECTION 2: Governance in the family firm
· SECTION 3: Strategic management in the family firm
· SECTION 4: Succession in the family firm
· SECTION 5: Change and transgenerational value creation
· SECTION 6: Interpersonal relationships and conflict in the family firm
· SECTION 7: Financial management in the family firm
The course addresses the governance, the management, and the finance of established family businesses. It examines succession, values, life cycles, business and marketing strategies, conflict resolution, communications, legal, and financial aspects, estate planning, management, philanthropy and other topics that uniquely touch family business governance, management and finance. It will convey the characteristics that differentiate family businesses from other businesses.
One of the features, which make this course unique and particularly modern, is a part of the Section 7: Financial management in the family firm dedicated to the mysterious and fascinating world of the family office. This is the little-known, but key professional practice of advising entire families-in-business, frequently large, diversified and with wide ramifications, about the complete spectrum of activities necessary to ensure that wealth is created, preserved, transmitted and spread across the enlarged family community. These services range from asset allocation to risk management, to education, efficient tax structuring, corporate finance and corporate governance, intra- and inter- generational transmission, philanthropy, etc. Given the enormous amount of wealth and power concerned, this phenomenon shows increasingly importance and starts to attract some focus, particularly by the best graduate students and professional talents.
Upon completion of this course, students should understand:
- The unique assets and vulnerabilities of family enterprises.
- The role of the CEO in governance, management, and the transfer of power.
- The relationship between the role of the board, the family council, and top management in providing effective governance for family business continuity.
- Key family dynamics.
- The relevance for families to manage collectively wealth created in professional ways,
and be able to:
- Identify the various stakeholders and the role of trust among family members and their impact on succession and continuity.
- Discuss the developmental needs and challenges of next generation leaders.
- Analyze the effect of estate taxes on ownership transfer across generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses.
- Explain the importance of strategic planning to family business continuity.
- Explore the critical role and challenges that non-family managers play in family-owned operations.
- Analyze the impact of family culture, family communication, family conflict, and family unity and explore their interaction effects on the family business.
- Assess whether they want to seek employment in family businesses both as key employees/managers or in a professional advisory role.
Teaching methods
Lessons will focus on transferring knowledge and on a strong interaction within the classroom; there are analysis of situations problems and business cases in order to facilitate participants in learning.
Regular attending students (in order to be a regular attending student, a participant should achieve at least an 85% of presence to lectures and case discussions) are strongly recommended to participate to all the lectures and to all the preparations and presentations of the business cases.
To meet its goals, this course uses readings, lectures, exercises, cases, individual and team assignments, and class discussion. Case assignments provide an important foundation for class discussion and must completed prior to each class session. The analytical syllabus (at the end of this document) shows due dates for all cases and other assignments in the class schedule. Lectures will highlight key points from the readings and provide additional information to supplement the readings. Cases will provide you with the opportunity to apply what you have learned to real world issues and scenarios. Because each of you brings unique perspectives and experiences to the class, participation in class discussions and activities is essential to your own learning as well as that of other class members. To enrich further your learning, an MScBA Teaching Assistant will also match you.
Textbook
Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709
Cases
During the course, we will discuss 10 cases:
1. More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45)
2. Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112)
3. Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125)
4. Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166)
5. Managing paradoxes (Chapter 6: Zellweger, pages: 193-194)
6. Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307)
7. Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363)
8. Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491)
9. Tom’s world (Chapter 9: Zellweger, pages: 422-424)
(the following case from Harvard Business School Publishing. You need to register to download the cases at the following link: https://hbr.org, then download the case at the indicated link)
10. Medco Energi Internasional
Case Discussions
We expect that regular attending students are fully engaged in the entire learning process. This means that we expect regular attending students to:
1) prepare the assigned readings of the cases prior to each class;
2) prepare as a group work a PowerPoint presentation on the case, based on the specific assignment;
3) come to class prepared to participate and to discuss in order to enhance the learning of the individual and the class.
On the web site of the course, students find for each case the relative assignment. Please read carefully the questions before the lesson and use them for preparing the PowerPoint presentation.
Each student will be involved the class discussion on the cases and tie the assigned reading for the session. The objective is to bring all class members into the discussion. The cases intend to integrate the concepts from the case into the context of the course. The preparation and the discussion of the cases do not exclude the study of the theoretical concepts useful for the discussion of the cases themselves and for the passing of the exam of the course.
With the cases’ discussions in CLASSROOM, each student will develop:
1. The ability to set the parameters for the problem (key concepts from the case).
2. A depth of knowledge about the case subject (understanding of material, good response to the observations of others).
3. The ability to tie-in case with other course concepts.
4. The ability to get others involved in the discussion.
In order to discuss effectively the cases, students do:
· Be prepared with facts and specific quotes from the case.
· Be prepared to make a comment, ask a question, or make a statement about the case.
During the discussion, students do:
· Take a position on a question or a point.
- Ask clarifying questions.
· Help keep the discussion moving and on track.
· Help draw others into the discussion.
· Integrate theories and content from other cases.
During the discussion, students do not:
· Be unprepared and show your lack of knowledge.
- Monopolize the discussion.
- Make irrelevant comments.
· Be insensitive to other’s desire to speak or to their opinions.
We kindly invite all the regular attending students to build up work groups (MINIMUM 3 PERSONS – MAXIMUM 5 PERSONS). Each work group should prepare a PowerPoint presentation for each case. Into the first slide, each work group should report the names of the students belonging to the group.
The structure of the presentation should follow the following outline:
- One or more introductory slides aimed at describing/reporting the story, the characters, all the necessary elements in order to define clearly the context and the boundaries of the case.
- One slide mentioning the questions of the assignment and underlining the learning goals of the case.
- One or more slides reporting the answers to each question of the assignment.
- One or more slides reporting the final remarks on the case.
- One closing slide about the lessons learned after the group discussion of the case.
How to prepare the PowerPoint presentation of the case?
Introduction – short presentation of case, short description of the problems and situations that should be coped with the discussion.
Diagnosis – Problem setting of the context and of the situation. Description of the mains facts and elements connected with the concepts and models of Family Business (e.g. Ownership issues, conflicts, family culture, governance issues, leadership, managing people, succession, etc.). What went wrong and which actions/situations, instead, were right? Which elements could be considered for the diagnosis?
Solution – Students should provide a possible solution to questions/problems related with the case and a viable and clear indication on how to approach the situation and how to solve it. The entire proposal should represent a consistent action plan in terms of behaviors and expected results.
Conclusions – Conclusions should not be longer than 300-500 words and should provide a description on how the situation and the problem characterized the case, on how Family Business schemata might help to solve the case, and what the proposed solution might generate in terms of family and managerial consequences.
Lessons learned – At the end of the presentation elements/suggestions/advices that we “take home” from the case discussion should be clearly identified and reported.
NOTE: During the case discussion, students should explicitly address the context and the different situations with concepts related with Family Business and with models and theories of this course.
Case Discussions’ Class Participation
We believe that the best way to learn, especially about family Business, is to actively participate in your education. In this class, “participation” is defined in terms of quality contributions to class discussion and exercises. There are four prerequisites for successful participation:
1. Be here on time and prepared. If you are not here, you cannot contribute much to class discussion. If you need to miss class for a predictable reason (e.g., job interview, athletic competition), please notify us at least 24 hours in advance so that we can arrange for any in-class exercises and so that you can obtain the materials distributed during the class. Of course, we realize that in some cases unforeseeable emergencies arise. Although we will not directly penalize you for non-attendance, be aware that multiple absences will indirectly hurt you by preventing you from participating in class, thereby lowering your participation grade. To contribute to class discussion, you must come to class having carefully prepared all assignments (i.e., readings, cases, exercises).
2. Be brave. Everyone in this class is smart, interesting, and has unique life experiences to share. You will get the most out of this course if you ask questions, voice opinions, and express your thoughts to one another. If you feel uncomfortable talking in class, please send me an email or set up an appointment to talk with me early in the semester. We will do everything we can to accommodate each of your individual circumstances, but we can only do so if they are brought to our attention.
3. Be courteous. Successful participation includes treating your classmates in a respectful and professional manner. Listen carefully to the comments and questions that your classmates voice. You may learn something new from their perspectives, and you will be able to avoid simply repeating something that another classmate has said earlier in discussion. Also, it is perfectly acceptable for you to voice disagreement with an opinion provided by another student. Open debate often leads to the most thoughtful and informative class discussions. However, please voice your disagreement in a kind and considerate manner.
4. Be engaged. This class is “unplugged.” Once class starts, all electronics (e.g., computers, cell phones, tablets, etc.) should be turned off and put away. If you need to use a device because of a language or disability issue, you need to secure permission at the beginning of the class. The misuse of an electronic device (e.g., surfing the web or texting) will adversely affect your grade.
In order to facilitate the visioning of its own PowerPoint presentation in classroom, each work group should take a personal computer with PowerPoint installed and an available VGA connection.
By the 8pm of the day before of the case discussion, all regular attending students should send an email to the course’s Instructors, attaching the case presentation prepared. They have to hand over a hard copy of the PowerPoint presentation. ONLY THE HANDING OVER OF THE HARD COPY CERTIFIES THE PREPARATION OF THE CASE FOR THE DISCUSSION. ONLY STUDENTS WHO HAD HANDED OVER ALL THE CASE PRESENTATIONS WILL BE ADMITTED TO THE PRE-EXAM.
Policy for Late Assignments
As in the business world, work must be received on time in order to receive full credit. If you are late on an assignment, your access to the Pre-Exam will be compromised. You are always welcome to hand in an assignment before its due date if you know that you will be busy as the due date approaches. If you think that you will not be able to complete an assignment by the stated due date, please speak with us in advance to make alternative arrangements. Our policy on late assignments will depend on the specific circumstances surrounding the problem, and thus may differ from student to student. Providing advance notice about a late assignment will minimize the penalty you receive on that assignment, but does not guarantee that there will be no penalty for turning the assignment in late.
Other learning sources
Slides and other material will be available on the course website.
THE SLIDES DO NOT REPRESENT A SUPPORT FOR AN EFFECTIVE AND SUCCESFUL PREPARATION TO THE EXAM OF THE COURSE. THEY REPRESENT ONLY A HELP TO FACILITATE THE TRANSFER OF THE KNOWLEDGES TO STUDENTS DURING THE LESSONS.
Attendance
Because of the concentrated nature of the MScBA programme, attendance in class is very important.
Students with less than 85% of attendance to lectures and case discussions (including arriving late or leaving early) will be required to prepare for the exam ALL the chapters of the textbook Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709 and ALL the cases discussed in classroom.
NOTE : Attendance for the first class session is mandatory as important information regarding the course and the instructors’ expectations are given. If you know in advance that you will be absent for one session, please contact your instructor to ensure that absence from a particular session is acceptable.
Exam
The exam, depending on the number of the registered student, is a written exam or an oral exam.
In case of a written exam, the duration is about 3-4 hours and it includes:
a) Case discussion - You may be given a case study to which some questions may pertain in order to lead the discussion. As you respond to the questions, please use specific content and theories (use names to identify theories and models) as the basis of your analysis. You will not receive credit for your personal opinions unless backed by theory, lecture, and/or text material. Also, describe how you see the content/theory applying to the situation. Your answers will be evaluated based upon both quantity and quality. Answers that are more complete and demonstrate a higher level of understanding and analysis will receive more points.
b) Some questions directly connected to the course textbook – The questions could open, closed (multiple choice), or a combination of the both. You may be asked to discuss the models and the theories presented during the course. You will be asked to interpret some real incidents and to focus your attention to some specific theoretical issues.
Pre-Exam participation and exam grades registering on the booklet
Only regular attending students (85% of attendance to lectures and case discussions, including arriving late or leaving early) that have delivered the hard copies of ALL the case to the Instructors are allowed to take the pre-exam.
Only regular registered students on the DELPHI System will be allowed to register their grade.
The pre-exam grades will be registered on the first official exam date AFTER THE COURSE ENDING. It is compulsory to come on that date of the exam for registering the grade on the Delphi and on the booklet.
Team Project
The purpose of the project is to give your team an opportunity to apply what has been learned in the course (through course lectures, readings, and case discussions) to problems in a family firm of your team's choice.
Class members, regular attending students, will work in teams of four (4) people.
To the Team Project regular attending students will be allowed to achieve a -3/+3 extra points to the final grade of the Pre-Exam. Only regular attending students, taking the Pre-Exam will be accepted for the Team Project.
Your team should identify a family firm to study (Please, no student groups).
Your team is to gather information from people in the family firm through direct contact. You may supplement this information with data from the media, the organization's literature, and other secondary sources. You should identify a relatively recent problem to analyze (i.e., this should not be an historical account of a problem and the company's solution). You should focus your analysis by applying the concepts from the course. While it is acceptable to incorporate several concepts from the course, please aim for depth rather than breadth regarding the use of course concepts. Your goal is to diagnose the mechanisms that are causing the problem or issue of concern in the organization. Initially, you may notice many symptoms (for instance, a crisis after the succession, seemingly an unhealthy family culture, low family members’ commitment and involvement, governance issues, etc.), but your task is to get to the underlying reason for these symptoms. And beware, sometimes the initial symptoms we think we see are not what they appear to be.
There are three broad goals for this assignment:
1. One goal of this assignment is obviously to take the initiative to make a positive contribution to a family firm.
2. Another major goal is to provide an opportunity for you to learn more about family businesses first hand and to use your critical thinking and reflection skills to link your experience with this family firm to your learning in relation to family business theories.
3. The final goal is to provide a forum for you to hone your skills as a team member and leader and to reflect on the learning gained from this team experience. Each team will make a presentation and write a paper that describes what you did for the family firm, what you learned about family business, and what you learned about working on a team.
To meet these broad goals, your team should answer the following questions in the assignments detailed below.
a) What are the issues or problems facing the family firm?
b) What course concepts can be applied to understand why this problem is occurring?
c) What recommendations can you offer to help improve the family business functioning?
Deliverables of the Team Project:
1. The project proposal e-mail is due by email to Instructors by the date of the 9th session of the course by 5pm. It should include:
a) The names of your group members
b) Your team name
c) The name of the organization
d) The name, contact information and level of your contact person
e) The method you will use to gain access to the organization
f) A brief description (one paragraph) of the problem facing the organization.
2. Your written project is due by email to Instructors by the date of the 18th session of the course by 5pm .
It should contain a maximum of 15 double spaced pages (1 cm margins, 12 point font). You will be penalized significantly for exceeding this limit. The limit does not include appendices, which you are free to use to provide charts, figures, or other background material not necessary in the main body of your analysis. However, appendices that are not directly referenced in the main text will not be read. LATE PROJECT WRITE-UPS WILL NOT BE ACCEPTED.
This written project should summarize what you did for/within the family firm, what you have learned about family business, and what you have learned about working on a team.
Grading of the Team Project:
Your group project will be evaluated on the following criteria:
a. Problem definition: How well (i.e., thoroughly and concisely) do you describe the family business context, the relevant parties, and the factors that are important to the problem?
b. Accurate and thorough use of course concepts.
c. Integration of course concepts with information about the family firm and problem, i.e., how well do you integrate course concepts with information about the problem to illuminate the problem in a way that leads to solutions?
d. Extent to which recommendations are consistent with analysis.
e. Quality of written analysis.
Analytical Syllabus
|
# |
Agenda |
Lecture/ Case discussion |
Lecturer |
|
SECTION 1: Family firms: prevalence and relevance |
|||
|
1 |
Introduction of the course (Chapter 1: Zellweger, pages: 1-3) 1. Thematic focus 2. Intended audience 3. Structure and pedagogical tools Defining the family business (Chapter 2: Zellweger, pages: 4-22) 1. The distinction between family and nonfamily firms 2. Defining family business by type of family involvement 3. Circle models of family influence 4. Family firm identity 5. Family business definition |
Lecture |
GNAN |
|
2 |
Prevalence and economic contribution of family firms around the globe (Chapter 3: Zellweger, pages: 24-33) 1. Prevalence of family firms worldwide 2. Economic contribution of family firms 3. Institutional setting and the prevalence of family firms Strengths and weaknesses of family firms (Chapter 4: Zellweger, pages: 36-42) 1. Typical strengths of family firms 2. Typical weaknesses of family firms 3. Bivalent attributes of family firm characteristics CASE STUDY: More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45) |
Lecture and Case |
GNAN |
|
SECTION 2: Governance in the family firm |
|||
|
3 |
Governance in the family firm: premises, corporate and ownership governance (Chapter 5: Zellweger, pages: 46-72) 1. Why do family firms need governance? 2. Typical governance constellations in family firms 3. Performance implications of governance constellations 4. Untangling corporate, ownership, family governance 5. Corporate governance 6. Ownership governance |
Lecture |
GNAN |
|
4 |
Governance in the family firm: family governance (Chapter 5: Zellweger, pages: 73-105) 1. Family governance 2. Governance documents: code of conduct and family charter 3. Governance bodies: family assembly and family council 4. Integrated governance in family firms CASE STUDY: Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112) |
Lecture and Case |
GNAN |
|
SECTION 3: Strategic management in the family firm |
|||
|
5 |
Strategic management in the family business: competitive advantages and the agency perspective (Chapter 6: Zellweger, pages: 116-134) 1. Strategic decision making in family firms 2. Conceptualizing the competitive advantage of family firms 3. The agency perspective CASE STUDY: Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125) |
Lecture and Case |
GNAN |
|
6 |
Strategic management in the family business: RBV and OI perspectives (Chapter 6: Zellweger, pages: 137-163) 1. The resource-based perspective 2. The organizational identity perspective CASE STUDY: Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166) |
Lecture and Case |
GNAN |
|
7 |
Strategic management in the family business: institutional and paradox perspectives (Chapter 6: Zellweger, pages: 167-194) 1. The institutional perspective 2. The paradox perspective 3. Generic strategies for family firms 4. Tools for strategic management in family firms CASE STUDY: Managing paradoxes (Chapter 6: Zellweger, pages: 193-194) |
Lecture and Case |
GNAN |
|
SECTION 4: Succession in the family firm |
|||
|
8 |
Succession in the family firm: goals and processual issues (Chapter 7: Zellweger, pages: 203-234) 1. Succession options 2. Opportunities and challenges of succession options 3. Significance of succession options 4. Declining relevance of infra-family succession 5. Sources of complexity in family business succession 6. Structuring the succession process: succession framework 7. Clarifying goals and priorities |
Lecture |
GNAN |
|
9 |
Succession in the family firm: change strategy and who is in charge of the change (Chapter 7: Zellweger, pages: 240-254) 1. Reviewing the firm's strategy 2. Planning the transition of responsibilities |
Lecture |
GNAN |
|
10 |
Succession in the family firm: value, finance, legal, and tax issues (Chapter 7: Zellweger, pages: 258-305) 1. Valuing the firm 2. Financing the succession 3. Defining the legal and tax setup CASE STUDY: Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307) |
Lecture and Case |
GNAN |
|
SECTION 5: Change and transgenerational value creation |
|||
|
11 |
Change and transgenerational value creation (Chapter 7: Zellweger, pages: 311-356) 1. Change and adaptation in family firms 2. Longevity of family firms 3. Transgenerational value creation in family firms CASE STUDY: Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363) |
Lecture and Case |
GNAN |
|
SECTION 6: Interpersonal relationships and conflict in the family firm |
|||
|
12 |
Interpersonal relationships and conflict in the family firm: social issues, family values, and perceptions (Chapter 10: Zellweger, pages: 428-466) 1. The social structure of the family 2. Trends in the social structure of the family 3. International variance in family values 4. Understanding interpersonal dynamics in the family firm: a systemic view 5. Justice perceptions |
Lecture |
GNAN |
|
13 |
Interpersonal relationships and conflict in the family firm: managing conflicts (Chapter 10: Zellweger, pages: 468-487) 1. Why family firms are fertile contexts for conflict 2. Types of conflict 3. Conflict dynamics 4. Conflict-management styles 5. Communication strategies 6. How to behave in the face of conflict CASE STUDY: Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491) |
Lecture and Case |
GNAN |
|
SECTION 7: Financial management in the family firm |
|||
|
14 |
Financial management in the family firm: differences with no family firms (Chapter 9: Zellweger, pages: 368-379) 1. Why finance is different for family firms 2. Family equity as a distinct asset class 3. Performance of family firms: a short review of the evidence 4. Risk taking in family firms |
Lecture |
GNAN |
|
15 |
Financial management in the family firm: financial tools (Chapter 9: Zellweger, pages: 380-400) 1. Debt financing 2. Equity financing 3. Leverage 4. Value management 5. Key financial indicators 6. Dilemmas in the financial management of family firms |
Lecture |
GNAN |
|
16 |
Financial management in the family firm: financial sustainability (Chapter 9: Zellweger, pages: 402-407) 1. Principles for the sustainable financial management of family firms 2. The role of the CFO in family firms CASE STUDY: Tom’s world (Chapter 9: Zellweger, pages: 422-424) |
Lecture and Case |
GNAN |
|
17 |
Financial management in the family firm: compensations (Chapter 9: Zellweger, pages: 407-411) 1. Management compensation in family firms CASE STUDY: Medco Energi Internasional (HBS 9-207-021) |
Lecture and Case |
GNAN |
|
18 |
Financial management in the family firm: family offices (Chapter 9: Zellweger, pages: 412-417 and Chapter 5: Zellweger, pages: 83-89) 1. The responsible shareholder in the family firm 2. Wealth governance |
Lecture |
|
Updated A.Y. 2018-2019
FAMILY BUSINESS
(Prof. Luca Gnan)
Teaching Staff responsible for the Course:
Prof. Luca Gnan
Email: luca.gnan@uniroma2.it
Availability: Contact via email
Prof.ssa Giulia Flamini
E-mail: giulia.flamini@uniroma2.it
Availability: Contact via email
We are committed to making this course a valuable learning experience for you. After the first month, we will spend part of a class session evaluating our progress, and we will make any necessary changes to keep us on track. However, we welcome your feedback at any time in the semester. It is easiest to reach us by email or during office hours, but we are always happy to set up an appointment. Additionally, if you have a disability that requires special accommodation, please let us know ASAP so that we can be helpful to you.
Emails, Office Hours & Feedback on Assignments
We endeavor to answer emails within 1 day. If you have not heard from us within that time, please resend the email. We will post grades & comments online in the materials section of the course website. We will be happy to give feedback and discuss assignments after all grading is complete for a certain assignment. We schedule office hours by email request.
We may answer questions of assignment clarification in class and via emails to benefit the entire class. We may also give extra grades (see below Team Project) during the course that, while generally designed to support learning in the course, will also help your participation grade. These are pass/fail and do not include comments.
Pre-requisites for the Course:
None
Course description and Learning Objectives
Family businesses shows distinct core competencies that can result in unique competitive advantages. They take a long run view of the business—across generations, rather than publicly traded quarterly reports. Their capital can be very patient, owners will sacrifice their salaries in order to make payroll, and they are an integral part of their communities, unlike publicly traded counterparts that might abandon a community at the blink of a budget. They can engender a great deal of loyalty on the part of employees, and the existence of family may reduce agency problems.
Family Businesses also face challenges that threaten their continuity. The challenges are primarily the result of issues presented by the interaction of family, management, and ownership—particularly where the family wishes to perpetuate its influence and/or control from generation to generation. Family firms seem to be as agile in one generation as they are fragile across generations.
Family businesses start with an owner-managed first generation (usually an entrepreneur). The next generation—G2—is the sibling generation, and G3 is the cousin era. The probability of passing the company to the next generation diminishes significantly, with fewer than half making it to G2 and only about less than 15% making it to G3. So, despite the benefits of family, there can be some significant issues.
The course explores and analyzes continuity challenges of family business and their best management practices. The focus of this course is on pragmatic, action-oriented, management, governance, finance, and family/business leadership skills.
Attention is devoted to evaluating family firms and their growth options to provide a roadmap for analyzing how family ownership, control, and management affect performances and how family firms can create and ensure more value through generations.
The course presents seven different sections:
· SECTION 1: Family firms: prevalence and relevance
· SECTION 2: Governance in the family firm
· SECTION 3: Strategic management in the family firm
· SECTION 4: Succession in the family firm
· SECTION 5: Change and transgenerational value creation
· SECTION 6: Interpersonal relationships and conflict in the family firm
· SECTION 7: Financial management in the family firm
The course addresses the governance, the management, and the finance of established family businesses. It examines succession, values, life cycles, business and marketing strategies, conflict resolution, communications, legal, and financial aspects, estate planning, management, philanthropy and other topics that uniquely touch family business governance, management and finance. It will convey the characteristics that differentiate family businesses from other businesses.
One of the features, which make this course unique and particularly modern, is a part of the Section 7: Financial management in the family firm dedicated to the mysterious and fascinating world of the family office. This is the little-known, but key professional practice of advising entire families-in-business, frequently large, diversified and with wide ramifications, about the complete spectrum of activities necessary to ensure that wealth is created, preserved, transmitted and spread across the enlarged family community. These services range from asset allocation to risk management, to education, efficient tax structuring, corporate finance and corporate governance, intra- and inter- generational transmission, philanthropy, etc. Given the enormous amount of wealth and power concerned, this phenomenon shows increasingly importance and starts to attract some focus, particularly by the best graduate students and professional talents.
Upon completion of this course, students should understand:
- The unique assets and vulnerabilities of family enterprises.
- The role of the CEO in governance, management, and the transfer of power.
- The relationship between the role of the board, the family council, and top management in providing effective governance for family business continuity.
- Key family dynamics.
- The relevance for families to manage collectively wealth created in professional ways,
and be able to:
- Identify the various stakeholders and the role of trust among family members and their impact on succession and continuity.
- Discuss the developmental needs and challenges of next generation leaders.
- Analyze the effect of estate taxes on ownership transfer across generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses.
- Explain the importance of strategic planning to family business continuity.
- Explore the critical role and challenges that non-family managers play in family-owned operations.
- Analyze the impact of family culture, family communication, family conflict, and family unity and explore their interaction effects on the family business.
- Assess whether they want to seek employment in family businesses both as key employees/managers or in a professional advisory role.
Teaching methods
Lessons will focus on transferring knowledge and on a strong interaction within the classroom; there are analysis of situations problems and business cases in order to facilitate participants in learning.
Regular attending students (in order to be a regular attending student, a participant should achieve at least an 85% of presence to lectures and case discussions) are strongly recommended to participate to all the lectures and to all the preparations and presentations of the business cases.
To meet its goals, this course uses readings, lectures, exercises, cases, individual and team assignments, and class discussion. Case assignments provide an important foundation for class discussion and must completed prior to each class session. The analytical syllabus (at the end of this document) shows due dates for all cases and other assignments in the class schedule. Lectures will highlight key points from the readings and provide additional information to supplement the readings. Cases will provide you with the opportunity to apply what you have learned to real world issues and scenarios. Because each of you brings unique perspectives and experiences to the class, participation in class discussions and activities is essential to your own learning as well as that of other class members. To enrich further your learning, an MScBA Teaching Assistant will also match you.
Textbook
Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709
Cases
During the course, we will discuss 10 cases:
1. More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45)
2. Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112)
3. Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125)
4. Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166)
5. Managing paradoxes (Chapter 6: Zellweger, pages: 193-194)
6. Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307)
7. Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363)
8. Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491)
9. Tom’s world (Chapter 9: Zellweger, pages: 422-424)
(the following case from Harvard Business School Publishing. You need to register to download the cases at the following link: https://hbr.org, then download the case at the indicated link)
10. Medco Energi Internasional
Case Discussions
We expect that regular attending students are fully engaged in the entire learning process. This means that we expect regular attending students to:
1) prepare the assigned readings of the cases prior to each class;
2) prepare as a group work a PowerPoint presentation on the case, based on the specific assignment;
3) come to class prepared to participate and to discuss in order to enhance the learning of the individual and the class.
On the web site of the course, students find for each case the relative assignment. Please read carefully the questions before the lesson and use them for preparing the PowerPoint presentation.
Each student will be involved the class discussion on the cases and tie the assigned reading for the session. The objective is to bring all class members into the discussion. The cases intend to integrate the concepts from the case into the context of the course. The preparation and the discussion of the cases do not exclude the study of the theoretical concepts useful for the discussion of the cases themselves and for the passing of the exam of the course.
With the cases’ discussions in CLASSROOM, each student will develop:
1. The ability to set the parameters for the problem (key concepts from the case).
2. A depth of knowledge about the case subject (understanding of material, good response to the observations of others).
3. The ability to tie-in case with other course concepts.
4. The ability to get others involved in the discussion.
In order to discuss effectively the cases, students do:
· Be prepared with facts and specific quotes from the case.
· Be prepared to make a comment, ask a question, or make a statement about the case.
During the discussion, students do:
· Take a position on a question or a point.
- Ask clarifying questions.
· Help keep the discussion moving and on track.
· Help draw others into the discussion.
· Integrate theories and content from other cases.
During the discussion, students do not:
· Be unprepared and show your lack of knowledge.
- Monopolize the discussion.
- Make irrelevant comments.
· Be insensitive to other’s desire to speak or to their opinions.
We kindly invite all the regular attending students to build up work groups (MINIMUM 3 PERSONS – MAXIMUM 5 PERSONS). Each work group should prepare a PowerPoint presentation for each case. Into the first slide, each work group should report the names of the students belonging to the group.
The structure of the presentation should follow the following outline:
- One or more introductory slides aimed at describing/reporting the story, the characters, all the necessary elements in order to define clearly the context and the boundaries of the case.
- One slide mentioning the questions of the assignment and underlining the learning goals of the case.
- One or more slides reporting the answers to each question of the assignment.
- One or more slides reporting the final remarks on the case.
- One closing slide about the lessons learned after the group discussion of the case.
How to prepare the PowerPoint presentation of the case?
Introduction – short presentation of case, short description of the problems and situations that should be coped with the discussion.
Diagnosis – Problem setting of the context and of the situation. Description of the mains facts and elements connected with the concepts and models of Family Business (e.g. Ownership issues, conflicts, family culture, governance issues, leadership, managing people, succession, etc.). What went wrong and which actions/situations, instead, were right? Which elements could be considered for the diagnosis?
Solution – Students should provide a possible solution to questions/problems related with the case and a viable and clear indication on how to approach the situation and how to solve it. The entire proposal should represent a consistent action plan in terms of behaviors and expected results.
Conclusions – Conclusions should not be longer than 300-500 words and should provide a description on how the situation and the problem characterized the case, on how Family Business schemata might help to solve the case, and what the proposed solution might generate in terms of family and managerial consequences.
Lessons learned – At the end of the presentation elements/suggestions/advices that we “take home” from the case discussion should be clearly identified and reported.
NOTE: During the case discussion, students should explicitly address the context and the different situations with concepts related with Family Business and with models and theories of this course.
Case Discussions’ Class Participation
We believe that the best way to learn, especially about family Business, is to actively participate in your education. In this class, “participation” is defined in terms of quality contributions to class discussion and exercises. There are four prerequisites for successful participation:
1. Be here on time and prepared. If you are not here, you cannot contribute much to class discussion. If you need to miss class for a predictable reason (e.g., job interview, athletic competition), please notify us at least 24 hours in advance so that we can arrange for any in-class exercises and so that you can obtain the materials distributed during the class. Of course, we realize that in some cases unforeseeable emergencies arise. Although we will not directly penalize you for non-attendance, be aware that multiple absences will indirectly hurt you by preventing you from participating in class, thereby lowering your participation grade. To contribute to class discussion, you must come to class having carefully prepared all assignments (i.e., readings, cases, exercises).
2. Be brave. Everyone in this class is smart, interesting, and has unique life experiences to share. You will get the most out of this course if you ask questions, voice opinions, and express your thoughts to one another. If you feel uncomfortable talking in class, please send me an email or set up an appointment to talk with me early in the semester. We will do everything we can to accommodate each of your individual circumstances, but we can only do so if they are brought to our attention.
3. Be courteous. Successful participation includes treating your classmates in a respectful and professional manner. Listen carefully to the comments and questions that your classmates voice. You may learn something new from their perspectives, and you will be able to avoid simply repeating something that another classmate has said earlier in discussion. Also, it is perfectly acceptable for you to voice disagreement with an opinion provided by another student. Open debate often leads to the most thoughtful and informative class discussions. However, please voice your disagreement in a kind and considerate manner.
4. Be engaged. This class is “unplugged.” Once class starts, all electronics (e.g., computers, cell phones, tablets, etc.) should be turned off and put away. If you need to use a device because of a language or disability issue, you need to secure permission at the beginning of the class. The misuse of an electronic device (e.g., surfing the web or texting) will adversely affect your grade.
In order to facilitate the visioning of its own PowerPoint presentation in classroom, each work group should take a personal computer with PowerPoint installed and an available VGA connection.
By the 8pm of the day before of the case discussion, all regular attending students should send an email to the course’s Instructors, attaching the case presentation prepared. They have to hand over a hard copy of the PowerPoint presentation. ONLY THE HANDING OVER OF THE HARD COPY CERTIFIES THE PREPARATION OF THE CASE FOR THE DISCUSSION. ONLY STUDENTS WHO HAD HANDED OVER ALL THE CASE PRESENTATIONS WILL BE ADMITTED TO THE PRE-EXAM.
Policy for Late Assignments
As in the business world, work must be received on time in order to receive full credit. If you are late on an assignment, your access to the Pre-Exam will be compromised. You are always welcome to hand in an assignment before its due date if you know that you will be busy as the due date approaches. If you think that you will not be able to complete an assignment by the stated due date, please speak with us in advance to make alternative arrangements. Our policy on late assignments will depend on the specific circumstances surrounding the problem, and thus may differ from student to student. Providing advance notice about a late assignment will minimize the penalty you receive on that assignment, but does not guarantee that there will be no penalty for turning the assignment in late.
Other learning sources
Slides and other material will be available on the course website.
THE SLIDES DO NOT REPRESENT A SUPPORT FOR AN EFFECTIVE AND SUCCESFUL PREPARATION TO THE EXAM OF THE COURSE. THEY REPRESENT ONLY A HELP TO FACILITATE THE TRANSFER OF THE KNOWLEDGES TO STUDENTS DURING THE LESSONS.
Attendance
Because of the concentrated nature of the MScBA programme, attendance in class is very important.
Students with less than 85% of attendance to lectures and case discussions (including arriving late or leaving early) will be required to prepare for the exam ALL the chapters of the textbook Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709 and ALL the cases discussed in classroom.
NOTE : Attendance for the first class session is mandatory as important information regarding the course and the instructors’ expectations are given. If you know in advance that you will be absent for one session, please contact your instructor to ensure that absence from a particular session is acceptable.
Exam
The exam, depending on the number of the registered student, is a written exam or an oral exam.
In case of a written exam, the duration is about 3-4 hours and it includes:
a) Case discussion - You may be given a case study to which some questions may pertain in order to lead the discussion. As you respond to the questions, please use specific content and theories (use names to identify theories and models) as the basis of your analysis. You will not receive credit for your personal opinions unless backed by theory, lecture, and/or text material. Also, describe how you see the content/theory applying to the situation. Your answers will be evaluated based upon both quantity and quality. Answers that are more complete and demonstrate a higher level of understanding and analysis will receive more points.
b) Some questions directly connected to the course textbook – The questions could open, closed (multiple choice), or a combination of the both. You may be asked to discuss the models and the theories presented during the course. You will be asked to interpret some real incidents and to focus your attention to some specific theoretical issues.
Pre-Exam participation and exam grades registering on the booklet
Only regular attending students (85% of attendance to lectures and case discussions, including arriving late or leaving early) that have delivered the hard copies of ALL the case to the Instructors are allowed to take the pre-exam.
Only regular registered students on the DELPHI System will be allowed to register their grade.
The pre-exam grades will be registered on the first official exam date AFTER THE COURSE ENDING. It is compulsory to come on that date of the exam for registering the grade on the Delphi and on the booklet.
Team Project
The purpose of the project is to give your team an opportunity to apply what has been learned in the course (through course lectures, readings, and case discussions) to problems in a family firm of your team's choice.
Class members, regular attending students, will work in teams of four (4) people.
To the Team Project regular attending students will be allowed to achieve a -3/+3 extra points to the final grade of the Pre-Exam. Only regular attending students, taking the Pre-Exam will be accepted for the Team Project.
Your team should identify a family firm to study (Please, no student groups).
Your team is to gather information from people in the family firm through direct contact. You may supplement this information with data from the media, the organization's literature, and other secondary sources. You should identify a relatively recent problem to analyze (i.e., this should not be an historical account of a problem and the company's solution). You should focus your analysis by applying the concepts from the course. While it is acceptable to incorporate several concepts from the course, please aim for depth rather than breadth regarding the use of course concepts. Your goal is to diagnose the mechanisms that are causing the problem or issue of concern in the organization. Initially, you may notice many symptoms (for instance, a crisis after the succession, seemingly an unhealthy family culture, low family members’ commitment and involvement, governance issues, etc.), but your task is to get to the underlying reason for these symptoms. And beware, sometimes the initial symptoms we think we see are not what they appear to be.
There are three broad goals for this assignment:
1. One goal of this assignment is obviously to take the initiative to make a positive contribution to a family firm.
2. Another major goal is to provide an opportunity for you to learn more about family businesses first hand and to use your critical thinking and reflection skills to link your experience with this family firm to your learning in relation to family business theories.
3. The final goal is to provide a forum for you to hone your skills as a team member and leader and to reflect on the learning gained from this team experience. Each team will make a presentation and write a paper that describes what you did for the family firm, what you learned about family business, and what you learned about working on a team.
To meet these broad goals, your team should answer the following questions in the assignments detailed below.
a) What are the issues or problems facing the family firm?
b) What course concepts can be applied to understand why this problem is occurring?
c) What recommendations can you offer to help improve the family business functioning?
Deliverables of the Team Project:
1. The project proposal e-mail is due by email to Instructors by the date of the 9th session of the course by 5pm. It should include:
a) The names of your group members
b) Your team name
c) The name of the organization
d) The name, contact information and level of your contact person
e) The method you will use to gain access to the organization
f) A brief description (one paragraph) of the problem facing the organization.
2. Your written project is due by email to Instructors by the date of the 18th session of the course by 5pm .
It should contain a maximum of 15 double spaced pages (1 cm margins, 12 point font). You will be penalized significantly for exceeding this limit. The limit does not include appendices, which you are free to use to provide charts, figures, or other background material not necessary in the main body of your analysis. However, appendices that are not directly referenced in the main text will not be read. LATE PROJECT WRITE-UPS WILL NOT BE ACCEPTED.
This written project should summarize what you did for/within the family firm, what you have learned about family business, and what you have learned about working on a team.
Grading of the Team Project:
Your group project will be evaluated on the following criteria:
a. Problem definition: How well (i.e., thoroughly and concisely) do you describe the family business context, the relevant parties, and the factors that are important to the problem?
b. Accurate and thorough use of course concepts.
c. Integration of course concepts with information about the family firm and problem, i.e., how well do you integrate course concepts with information about the problem to illuminate the problem in a way that leads to solutions?
d. Extent to which recommendations are consistent with analysis.
e. Quality of written analysis.
Analytical Syllabus
|
# |
Agenda |
Lecture/ Case discussion |
Lecturer |
|
SECTION 1: Family firms: prevalence and relevance |
|||
|
1 |
Introduction of the course (Chapter 1: Zellweger, pages: 1-3) 1. Thematic focus 2. Intended audience 3. Structure and pedagogical tools Defining the family business (Chapter 2: Zellweger, pages: 4-22) 1. The distinction between family and nonfamily firms 2. Defining family business by type of family involvement 3. Circle models of family influence 4. Family firm identity 5. Family business definition |
Lecture |
GNAN |
|
2 |
Prevalence and economic contribution of family firms around the globe (Chapter 3: Zellweger, pages: 24-33) 1. Prevalence of family firms worldwide 2. Economic contribution of family firms 3. Institutional setting and the prevalence of family firms Strengths and weaknesses of family firms (Chapter 4: Zellweger, pages: 36-42) 1. Typical strengths of family firms 2. Typical weaknesses of family firms 3. Bivalent attributes of family firm characteristics CASE STUDY: More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45) |
Lecture and Case |
GNAN |
|
SECTION 2: Governance in the family firm |
|||
|
3 |
Governance in the family firm: premises, corporate and ownership governance (Chapter 5: Zellweger, pages: 46-72) 1. Why do family firms need governance? 2. Typical governance constellations in family firms 3. Performance implications of governance constellations 4. Untangling corporate, ownership, family governance 5. Corporate governance 6. Ownership governance |
Lecture |
GNAN |
|
4 |
Governance in the family firm: family governance (Chapter 5: Zellweger, pages: 73-105) 1. Family governance 2. Governance documents: code of conduct and family charter 3. Governance bodies: family assembly and family council 4. Integrated governance in family firms CASE STUDY: Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112) |
Lecture and Case |
GNAN |
|
SECTION 3: Strategic management in the family firm |
|||
|
5 |
Strategic management in the family business: competitive advantages and the agency perspective (Chapter 6: Zellweger, pages: 116-134) 1. Strategic decision making in family firms 2. Conceptualizing the competitive advantage of family firms 3. The agency perspective CASE STUDY: Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125) |
Lecture and Case |
GNAN |
|
6 |
Strategic management in the family business: RBV and OI perspectives (Chapter 6: Zellweger, pages: 137-163) 1. The resource-based perspective 2. The organizational identity perspective CASE STUDY: Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166) |
Lecture and Case |
GNAN |
|
7 |
Strategic management in the family business: institutional and paradox perspectives (Chapter 6: Zellweger, pages: 167-194) 1. The institutional perspective 2. The paradox perspective 3. Generic strategies for family firms 4. Tools for strategic management in family firms CASE STUDY: Managing paradoxes (Chapter 6: Zellweger, pages: 193-194) |
Lecture and Case |
GNAN |
|
SECTION 4: Succession in the family firm |
|||
|
8 |
Succession in the family firm: goals and processual issues (Chapter 7: Zellweger, pages: 203-234) 1. Succession options 2. Opportunities and challenges of succession options 3. Significance of succession options 4. Declining relevance of infra-family succession 5. Sources of complexity in family business succession 6. Structuring the succession process: succession framework 7. Clarifying goals and priorities |
Lecture |
GNAN |
|
9 |
Succession in the family firm: change strategy and who is in charge of the change (Chapter 7: Zellweger, pages: 240-254) 1. Reviewing the firm's strategy 2. Planning the transition of responsibilities |
Lecture |
GNAN |
|
10 |
Succession in the family firm: value, finance, legal, and tax issues (Chapter 7: Zellweger, pages: 258-305) 1. Valuing the firm 2. Financing the succession 3. Defining the legal and tax setup CASE STUDY: Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307) |
Lecture and Case |
GNAN |
|
SECTION 5: Change and transgenerational value creation |
|||
|
11 |
Change and transgenerational value creation (Chapter 7: Zellweger, pages: 311-356) 1. Change and adaptation in family firms 2. Longevity of family firms 3. Transgenerational value creation in family firms CASE STUDY: Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363) |
Lecture and Case |
GNAN |
|
SECTION 6: Interpersonal relationships and conflict in the family firm |
|||
|
12 |
Interpersonal relationships and conflict in the family firm: social issues, family values, and perceptions (Chapter 10: Zellweger, pages: 428-466) 1. The social structure of the family 2. Trends in the social structure of the family 3. International variance in family values 4. Understanding interpersonal dynamics in the family firm: a systemic view 5. Justice perceptions |
Lecture |
GNAN |
|
13 |
Interpersonal relationships and conflict in the family firm: managing conflicts (Chapter 10: Zellweger, pages: 468-487) 1. Why family firms are fertile contexts for conflict 2. Types of conflict 3. Conflict dynamics 4. Conflict-management styles 5. Communication strategies 6. How to behave in the face of conflict CASE STUDY: Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491) |
Lecture and Case |
GNAN |
|
SECTION 7: Financial management in the family firm |
|||
|
14 |
Financial management in the family firm: differences with no family firms (Chapter 9: Zellweger, pages: 368-379) 1. Why finance is different for family firms 2. Family equity as a distinct asset class 3. Performance of family firms: a short review of the evidence 4. Risk taking in family firms |
Lecture |
GNAN |
|
15 |
Financial management in the family firm: financial tools (Chapter 9: Zellweger, pages: 380-400) 1. Debt financing 2. Equity financing 3. Leverage 4. Value management 5. Key financial indicators 6. Dilemmas in the financial management of family firms |
Lecture |
GNAN |
|
16 |
Financial management in the family firm: financial sustainability (Chapter 9: Zellweger, pages: 402-407) 1. Principles for the sustainable financial management of family firms 2. The role of the CFO in family firms CASE STUDY: Tom’s world (Chapter 9: Zellweger, pages: 422-424) |
Lecture and Case |
GNAN |
|
17 |
Financial management in the family firm: compensations (Chapter 9: Zellweger, pages: 407-411) 1. Management compensation in family firms CASE STUDY: Medco Energi Internasional (HBS 9-207-021) |
Lecture and Case |
GNAN |
|
18 |
Financial management in the family firm: family offices (Chapter 9: Zellweger, pages: 412-417 and Chapter 5: Zellweger, pages: 83-89) 1. The responsible shareholder in the family firm 2. Wealth governance |
Lecture |
|
Updated A.Y. 2017-2018
FAMILY BUSINESS
(Prof. Luca Gnan)
Teaching Staff responsible for the Course:
Prof. Luca Gnan
Email: luca.gnan@uniroma2.it
Availability: Contact via email
Prof.ssa Giulia Flamini
E-mail: giulia.flamini@uniroma2.it
Availability: Contact via email
We are committed to making this course a valuable learning experience for you. After the first month, we will spend part of a class session evaluating our progress, and we will make any necessary changes to keep us on track. However, we welcome your feedback at any time in the semester. It is easiest to reach us by email or during office hours, but we are always happy to set up an appointment. Additionally, if you have a disability that requires special accommodation, please let us know ASAP so that we can be helpful to you.
Emails, Office Hours & Feedback on Assignments
We endeavor to answer emails within 1 day. If you have not heard from us within that time, please resend the email. We will post grades & comments online in the materials section of the course website. We will be happy to give feedback and discuss assignments after all grading is complete for a certain assignment. We schedule office hours by email request.
We may answer questions of assignment clarification in class and via emails to benefit the entire class. We may also give extra grades (see below Team Project) during the course that, while generally designed to support learning in the course, will also help your participation grade. These are pass/fail and do not include comments.
Pre-requisites for the Course:
None
Course description and Learning Objectives
Family businesses shows distinct core competencies that can result in unique competitive advantages. They take a long run view of the business—across generations, rather than publicly traded quarterly reports. Their capital can be very patient, owners will sacrifice their salaries in order to make payroll, and they are an integral part of their communities, unlike publicly traded counterparts that might abandon a community at the blink of a budget. They can engender a great deal of loyalty on the part of employees, and the existence of family may reduce agency problems.
Family Businesses also face challenges that threaten their continuity. The challenges are primarily the result of issues presented by the interaction of family, management, and ownership—particularly where the family wishes to perpetuate its influence and/or control from generation to generation. Family firms seem to be as agile in one generation as they are fragile across generations.
Family businesses start with an owner-managed first generation (usually an entrepreneur). The next generation—G2—is the sibling generation, and G3 is the cousin era. The probability of passing the company to the next generation diminishes significantly, with fewer than half making it to G2 and only about less than 15% making it to G3. So, despite the benefits of family, there can be some significant issues.
The course explores and analyzes continuity challenges of family business and their best management practices. The focus of this course is on pragmatic, action-oriented, management, governance, finance, and family/business leadership skills.
Attention is devoted to evaluating family firms and their growth options to provide a roadmap for analyzing how family ownership, control, and management affect performances and how family firms can create and ensure more value through generations.
The course presents seven different sections:
· SECTION 1: Family firms: prevalence and relevance
· SECTION 2: Governance in the family firm
· SECTION 3: Strategic management in the family firm
· SECTION 4: Succession in the family firm
· SECTION 5: Change and transgenerational value creation
· SECTION 6: Interpersonal relationships and conflict in the family firm
· SECTION 7: Financial management in the family firm
The course addresses the governance, the management, and the finance of established family businesses. It examines succession, values, life cycles, business and marketing strategies, conflict resolution, communications, legal, and financial aspects, estate planning, management, philanthropy and other topics that uniquely touch family business governance, management and finance. It will convey the characteristics that differentiate family businesses from other businesses.
One of the features, which make this course unique and particularly modern, is a part of the Section 7: Financial management in the family firm dedicated to the mysterious and fascinating world of the family office. This is the little-known, but key professional practice of advising entire families-in-business, frequently large, diversified and with wide ramifications, about the complete spectrum of activities necessary to ensure that wealth is created, preserved, transmitted and spread across the enlarged family community. These services range from asset allocation to risk management, to education, efficient tax structuring, corporate finance and corporate governance, intra- and inter- generational transmission, philanthropy, etc. Given the enormous amount of wealth and power concerned, this phenomenon shows increasingly importance and starts to attract some focus, particularly by the best graduate students and professional talents.
Upon completion of this course, students should understand:
- The unique assets and vulnerabilities of family enterprises.
- The role of the CEO in governance, management, and the transfer of power.
- The relationship between the role of the board, the family council, and top management in providing effective governance for family business continuity.
- Key family dynamics.
- The relevance for families to manage collectively wealth created in professional ways,
and be able to:
- Identify the various stakeholders and the role of trust among family members and their impact on succession and continuity.
- Discuss the developmental needs and challenges of next generation leaders.
- Analyze the effect of estate taxes on ownership transfer across generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses.
- Explain the importance of strategic planning to family business continuity.
- Explore the critical role and challenges that non-family managers play in family-owned operations.
- Analyze the impact of family culture, family communication, family conflict, and family unity and explore their interaction effects on the family business.
- Assess whether they want to seek employment in family businesses both as key employees/managers or in a professional advisory role.
Teaching methods
Lessons will focus on transferring knowledge and on a strong interaction within the classroom; there are analysis of situations problems and business cases in order to facilitate participants in learning.
Regular attending students (in order to be a regular attending student, a participant should achieve at least an 85% of presence to lectures and case discussions) are strongly recommended to participate to all the lectures and to all the preparations and presentations of the business cases.
To meet its goals, this course uses readings, lectures, exercises, cases, individual and team assignments, and class discussion. Case assignments provide an important foundation for class discussion and must completed prior to each class session. The analytical syllabus (at the end of this document) shows due dates for all cases and other assignments in the class schedule. Lectures will highlight key points from the readings and provide additional information to supplement the readings. Cases will provide you with the opportunity to apply what you have learned to real world issues and scenarios. Because each of you brings unique perspectives and experiences to the class, participation in class discussions and activities is essential to your own learning as well as that of other class members. To enrich further your learning, an MScBA Teaching Assistant will also match you.
Textbook
Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709
Cases
During the course, we will discuss 10 cases:
1. More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45)
2. Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112)
3. Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125)
4. Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166)
5. Managing paradoxes (Chapter 6: Zellweger, pages: 193-194)
6. Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307)
7. Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363)
8. Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491)
9. Tom’s world (Chapter 9: Zellweger, pages: 422-424)
(the following case from Harvard Business School Publishing. You need to register to download the cases at the following link: https://hbr.org, then download the case at the indicated link)
10. Medco Energi Internasional
Case Discussions
We expect that regular attending students are fully engaged in the entire learning process. This means that we expect regular attending students to:
1) prepare the assigned readings of the cases prior to each class;
2) prepare as a group work a PowerPoint presentation on the case, based on the specific assignment;
3) come to class prepared to participate and to discuss in order to enhance the learning of the individual and the class.
On the web site of the course, students find for each case the relative assignment. Please read carefully the questions before the lesson and use them for preparing the PowerPoint presentation.
Each student will be involved the class discussion on the cases and tie the assigned reading for the session. The objective is to bring all class members into the discussion. The cases intend to integrate the concepts from the case into the context of the course. The preparation and the discussion of the cases do not exclude the study of the theoretical concepts useful for the discussion of the cases themselves and for the passing of the exam of the course.
With the cases’ discussions in CLASSROOM, each student will develop:
1. The ability to set the parameters for the problem (key concepts from the case).
2. A depth of knowledge about the case subject (understanding of material, good response to the observations of others).
3. The ability to tie-in case with other course concepts.
4. The ability to get others involved in the discussion.
In order to discuss effectively the cases, students do:
· Be prepared with facts and specific quotes from the case.
· Be prepared to make a comment, ask a question, or make a statement about the case.
During the discussion, students do:
· Take a position on a question or a point.
- Ask clarifying questions.
· Help keep the discussion moving and on track.
· Help draw others into the discussion.
· Integrate theories and content from other cases.
During the discussion, students do not:
· Be unprepared and show your lack of knowledge.
- Monopolize the discussion.
- Make irrelevant comments.
· Be insensitive to other’s desire to speak or to their opinions.
We kindly invite all the regular attending students to build up work groups (MINIMUM 3 PERSONS – MAXIMUM 5 PERSONS). Each work group should prepare a PowerPoint presentation for each case. Into the first slide, each work group should report the names of the students belonging to the group.
The structure of the presentation should follow the following outline:
- One or more introductory slides aimed at describing/reporting the story, the characters, all the necessary elements in order to define clearly the context and the boundaries of the case.
- One slide mentioning the questions of the assignment and underlining the learning goals of the case.
- One or more slides reporting the answers to each question of the assignment.
- One or more slides reporting the final remarks on the case.
- One closing slide about the lessons learned after the group discussion of the case.
How to prepare the PowerPoint presentation of the case?
Introduction – short presentation of case, short description of the problems and situations that should be coped with the discussion.
Diagnosis – Problem setting of the context and of the situation. Description of the mains facts and elements connected with the concepts and models of Family Business (e.g. Ownership issues, conflicts, family culture, governance issues, leadership, managing people, succession, etc.). What went wrong and which actions/situations, instead, were right? Which elements could be considered for the diagnosis?
Solution – Students should provide a possible solution to questions/problems related with the case and a viable and clear indication on how to approach the situation and how to solve it. The entire proposal should represent a consistent action plan in terms of behaviors and expected results.
Conclusions – Conclusions should not be longer than 300-500 words and should provide a description on how the situation and the problem characterized the case, on how Family Business schemata might help to solve the case, and what the proposed solution might generate in terms of family and managerial consequences.
Lessons learned – At the end of the presentation elements/suggestions/advices that we “take home” from the case discussion should be clearly identified and reported.
NOTE: During the case discussion, students should explicitly address the context and the different situations with concepts related with Family Business and with models and theories of this course.
Case Discussions’ Class Participation
We believe that the best way to learn, especially about family Business, is to actively participate in your education. In this class, “participation” is defined in terms of quality contributions to class discussion and exercises. There are four prerequisites for successful participation:
1. Be here on time and prepared. If you are not here, you cannot contribute much to class discussion. If you need to miss class for a predictable reason (e.g., job interview, athletic competition), please notify us at least 24 hours in advance so that we can arrange for any in-class exercises and so that you can obtain the materials distributed during the class. Of course, we realize that in some cases unforeseeable emergencies arise. Although we will not directly penalize you for non-attendance, be aware that multiple absences will indirectly hurt you by preventing you from participating in class, thereby lowering your participation grade. To contribute to class discussion, you must come to class having carefully prepared all assignments (i.e., readings, cases, exercises).
2. Be brave. Everyone in this class is smart, interesting, and has unique life experiences to share. You will get the most out of this course if you ask questions, voice opinions, and express your thoughts to one another. If you feel uncomfortable talking in class, please send me an email or set up an appointment to talk with me early in the semester. We will do everything we can to accommodate each of your individual circumstances, but we can only do so if they are brought to our attention.
3. Be courteous. Successful participation includes treating your classmates in a respectful and professional manner. Listen carefully to the comments and questions that your classmates voice. You may learn something new from their perspectives, and you will be able to avoid simply repeating something that another classmate has said earlier in discussion. Also, it is perfectly acceptable for you to voice disagreement with an opinion provided by another student. Open debate often leads to the most thoughtful and informative class discussions. However, please voice your disagreement in a kind and considerate manner.
4. Be engaged. This class is “unplugged.” Once class starts, all electronics (e.g., computers, cell phones, tablets, etc.) should be turned off and put away. If you need to use a device because of a language or disability issue, you need to secure permission at the beginning of the class. The misuse of an electronic device (e.g., surfing the web or texting) will adversely affect your grade.
In order to facilitate the visioning of its own PowerPoint presentation in classroom, each work group should take a personal computer with PowerPoint installed and an available VGA connection.
By the 8pm of the day before of the case discussion, all regular attending students should send an email to the course’s Instructors, attaching the case presentation prepared. They have to hand over a hard copy of the PowerPoint presentation. ONLY THE HANDING OVER OF THE HARD COPY CERTIFIES THE PREPARATION OF THE CASE FOR THE DISCUSSION. ONLY STUDENTS WHO HAD HANDED OVER ALL THE CASE PRESENTATIONS WILL BE ADMITTED TO THE PRE-EXAM.
Policy for Late Assignments
As in the business world, work must be received on time in order to receive full credit. If you are late on an assignment, your access to the Pre-Exam will be compromised. You are always welcome to hand in an assignment before its due date if you know that you will be busy as the due date approaches. If you think that you will not be able to complete an assignment by the stated due date, please speak with us in advance to make alternative arrangements. Our policy on late assignments will depend on the specific circumstances surrounding the problem, and thus may differ from student to student. Providing advance notice about a late assignment will minimize the penalty you receive on that assignment, but does not guarantee that there will be no penalty for turning the assignment in late.
Other learning sources
Slides and other material will be available on the course website.
THE SLIDES DO NOT REPRESENT A SUPPORT FOR AN EFFECTIVE AND SUCCESFUL PREPARATION TO THE EXAM OF THE COURSE. THEY REPRESENT ONLY A HELP TO FACILITATE THE TRANSFER OF THE KNOWLEDGES TO STUDENTS DURING THE LESSONS.
Attendance
Because of the concentrated nature of the MScBA programme, attendance in class is very important.
Students with less than 85% of attendance to lectures and case discussions (including arriving late or leaving early) will be required to prepare for the exam ALL the chapters of the textbook Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709 and ALL the cases discussed in classroom.
NOTE : Attendance for the first class session is mandatory as important information regarding the course and the instructors’ expectations are given. If you know in advance that you will be absent for one session, please contact your instructor to ensure that absence from a particular session is acceptable.
Exam
The exam, depending on the number of the registered student, is a written exam or an oral exam.
In case of a written exam, the duration is about 3-4 hours and it includes:
a) Case discussion - You may be given a case study to which some questions may pertain in order to lead the discussion. As you respond to the questions, please use specific content and theories (use names to identify theories and models) as the basis of your analysis. You will not receive credit for your personal opinions unless backed by theory, lecture, and/or text material. Also, describe how you see the content/theory applying to the situation. Your answers will be evaluated based upon both quantity and quality. Answers that are more complete and demonstrate a higher level of understanding and analysis will receive more points.
b) Some questions directly connected to the course textbook – The questions could open, closed (multiple choice), or a combination of the both. You may be asked to discuss the models and the theories presented during the course. You will be asked to interpret some real incidents and to focus your attention to some specific theoretical issues.
Pre-Exam participation and exam grades registering on the booklet
Only regular attending students (85% of attendance to lectures and case discussions, including arriving late or leaving early) that have delivered the hard copies of ALL the case to the Instructors are allowed to take the pre-exam.
Only regular registered students on the DELPHI System will be allowed to register their grade.
The pre-exam grades will be registered on the first official exam date AFTER THE COURSE ENDING. It is compulsory to come on that date of the exam for registering the grade on the Delphi and on the booklet.
Team Project
The purpose of the project is to give your team an opportunity to apply what has been learned in the course (through course lectures, readings, and case discussions) to problems in a family firm of your team's choice.
Class members, regular attending students, will work in teams of four (4) people.
To the Team Project regular attending students will be allowed to achieve a -3/+3 extra points to the final grade of the Pre-Exam. Only regular attending students, taking the Pre-Exam will be accepted for the Team Project.
Your team should identify a family firm to study (Please, no student groups).
Your team is to gather information from people in the family firm through direct contact. You may supplement this information with data from the media, the organization's literature, and other secondary sources. You should identify a relatively recent problem to analyze (i.e., this should not be an historical account of a problem and the company's solution). You should focus your analysis by applying the concepts from the course. While it is acceptable to incorporate several concepts from the course, please aim for depth rather than breadth regarding the use of course concepts. Your goal is to diagnose the mechanisms that are causing the problem or issue of concern in the organization. Initially, you may notice many symptoms (for instance, a crisis after the succession, seemingly an unhealthy family culture, low family members’ commitment and involvement, governance issues, etc.), but your task is to get to the underlying reason for these symptoms. And beware, sometimes the initial symptoms we think we see are not what they appear to be.
There are three broad goals for this assignment:
1. One goal of this assignment is obviously to take the initiative to make a positive contribution to a family firm.
2. Another major goal is to provide an opportunity for you to learn more about family businesses first hand and to use your critical thinking and reflection skills to link your experience with this family firm to your learning in relation to family business theories.
3. The final goal is to provide a forum for you to hone your skills as a team member and leader and to reflect on the learning gained from this team experience. Each team will make a presentation and write a paper that describes what you did for the family firm, what you learned about family business, and what you learned about working on a team.
To meet these broad goals, your team should answer the following questions in the assignments detailed below.
a) What are the issues or problems facing the family firm?
b) What course concepts can be applied to understand why this problem is occurring?
c) What recommendations can you offer to help improve the family business functioning?
Deliverables of the Team Project:
1. The project proposal e-mail is due by email to Instructors by the date of the 9th session of the course by 5pm. It should include:
a) The names of your group members
b) Your team name
c) The name of the organization
d) The name, contact information and level of your contact person
e) The method you will use to gain access to the organization
f) A brief description (one paragraph) of the problem facing the organization.
2. Your written project is due by email to Instructors by the date of the 18th session of the course by 5pm .
It should contain a maximum of 15 double spaced pages (1 cm margins, 12 point font). You will be penalized significantly for exceeding this limit. The limit does not include appendices, which you are free to use to provide charts, figures, or other background material not necessary in the main body of your analysis. However, appendices that are not directly referenced in the main text will not be read. LATE PROJECT WRITE-UPS WILL NOT BE ACCEPTED.
This written project should summarize what you did for/within the family firm, what you have learned about family business, and what you have learned about working on a team.
Grading of the Team Project:
Your group project will be evaluated on the following criteria:
a. Problem definition: How well (i.e., thoroughly and concisely) do you describe the family business context, the relevant parties, and the factors that are important to the problem?
b. Accurate and thorough use of course concepts.
c. Integration of course concepts with information about the family firm and problem, i.e., how well do you integrate course concepts with information about the problem to illuminate the problem in a way that leads to solutions?
d. Extent to which recommendations are consistent with analysis.
e. Quality of written analysis.
Analytical Syllabus
|
# |
Agenda |
Lecture/ Case discussion |
Lecturer |
|
SECTION 1: Family firms: prevalence and relevance |
|||
|
1 |
Introduction of the course (Chapter 1: Zellweger, pages: 1-3) 1. Thematic focus 2. Intended audience 3. Structure and pedagogical tools Defining the family business (Chapter 2: Zellweger, pages: 4-22) 1. The distinction between family and nonfamily firms 2. Defining family business by type of family involvement 3. Circle models of family influence 4. Family firm identity 5. Family business definition |
Lecture |
GNAN |
|
2 |
Prevalence and economic contribution of family firms around the globe (Chapter 3: Zellweger, pages: 24-33) 1. Prevalence of family firms worldwide 2. Economic contribution of family firms 3. Institutional setting and the prevalence of family firms Strengths and weaknesses of family firms (Chapter 4: Zellweger, pages: 36-42) 1. Typical strengths of family firms 2. Typical weaknesses of family firms 3. Bivalent attributes of family firm characteristics CASE STUDY: More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45) |
Lecture and Case |
GNAN |
|
SECTION 2: Governance in the family firm |
|||
|
3 |
Governance in the family firm: premises, corporate and ownership governance (Chapter 5: Zellweger, pages: 46-72) 1. Why do family firms need governance? 2. Typical governance constellations in family firms 3. Performance implications of governance constellations 4. Untangling corporate, ownership, family governance 5. Corporate governance 6. Ownership governance |
Lecture |
GNAN |
|
4 |
Governance in the family firm: family governance (Chapter 5: Zellweger, pages: 73-105) 1. Family governance 2. Governance documents: code of conduct and family charter 3. Governance bodies: family assembly and family council 4. Integrated governance in family firms CASE STUDY: Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112) |
Lecture and Case |
GNAN |
|
SECTION 3: Strategic management in the family firm |
|||
|
5 |
Strategic management in the family business: competitive advantages and the agency perspective (Chapter 6: Zellweger, pages: 116-134) 1. Strategic decision making in family firms 2. Conceptualizing the competitive advantage of family firms 3. The agency perspective CASE STUDY: Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125) |
Lecture and Case |
GNAN |
|
6 |
Strategic management in the family business: RBV and OI perspectives (Chapter 6: Zellweger, pages: 137-163) 1. The resource-based perspective 2. The organizational identity perspective CASE STUDY: Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166) |
Lecture and Case |
GNAN |
|
7 |
Strategic management in the family business: institutional and paradox perspectives (Chapter 6: Zellweger, pages: 167-194) 1. The institutional perspective 2. The paradox perspective 3. Generic strategies for family firms 4. Tools for strategic management in family firms CASE STUDY: Managing paradoxes (Chapter 6: Zellweger, pages: 193-194) |
Lecture and Case |
GNAN |
|
SECTION 4: Succession in the family firm |
|||
|
8 |
Succession in the family firm: goals and processual issues (Chapter 7: Zellweger, pages: 203-234) 1. Succession options 2. Opportunities and challenges of succession options 3. Significance of succession options 4. Declining relevance of infra-family succession 5. Sources of complexity in family business succession 6. Structuring the succession process: succession framework 7. Clarifying goals and priorities |
Lecture |
GNAN |
|
9 |
Succession in the family firm: change strategy and who is in charge of the change (Chapter 7: Zellweger, pages: 240-254) 1. Reviewing the firm's strategy 2. Planning the transition of responsibilities |
Lecture |
GNAN |
|
10 |
Succession in the family firm: value, finance, legal, and tax issues (Chapter 7: Zellweger, pages: 258-305) 1. Valuing the firm 2. Financing the succession 3. Defining the legal and tax setup CASE STUDY: Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307) |
Lecture and Case |
GNAN |
|
SECTION 5: Change and transgenerational value creation |
|||
|
11 |
Change and transgenerational value creation (Chapter 7: Zellweger, pages: 311-356) 1. Change and adaptation in family firms 2. Longevity of family firms 3. Transgenerational value creation in family firms CASE STUDY: Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363) |
Lecture and Case |
GNAN |
|
SECTION 6: Interpersonal relationships and conflict in the family firm |
|||
|
12 |
Interpersonal relationships and conflict in the family firm: social issues, family values, and perceptions (Chapter 10: Zellweger, pages: 428-466) 1. The social structure of the family 2. Trends in the social structure of the family 3. International variance in family values 4. Understanding interpersonal dynamics in the family firm: a systemic view 5. Justice perceptions |
Lecture |
GNAN |
|
13 |
Interpersonal relationships and conflict in the family firm: managing conflicts (Chapter 10: Zellweger, pages: 468-487) 1. Why family firms are fertile contexts for conflict 2. Types of conflict 3. Conflict dynamics 4. Conflict-management styles 5. Communication strategies 6. How to behave in the face of conflict CASE STUDY: Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491) |
Lecture and Case |
GNAN |
|
SECTION 7: Financial management in the family firm |
|||
|
14 |
Financial management in the family firm: differences with no family firms (Chapter 9: Zellweger, pages: 368-379) 1. Why finance is different for family firms 2. Family equity as a distinct asset class 3. Performance of family firms: a short review of the evidence 4. Risk taking in family firms |
Lecture |
GNAN |
|
15 |
Financial management in the family firm: financial tools (Chapter 9: Zellweger, pages: 380-400) 1. Debt financing 2. Equity financing 3. Leverage 4. Value management 5. Key financial indicators 6. Dilemmas in the financial management of family firms |
Lecture |
GNAN |
|
16 |
Financial management in the family firm: financial sustainability (Chapter 9: Zellweger, pages: 402-407) 1. Principles for the sustainable financial management of family firms 2. The role of the CFO in family firms CASE STUDY: Tom’s world (Chapter 9: Zellweger, pages: 422-424) |
Lecture and Case |
GNAN |
|
17 |
Financial management in the family firm: compensations (Chapter 9: Zellweger, pages: 407-411) 1. Management compensation in family firms CASE STUDY: Medco Energi Internasional (HBS 9-207-021) |
Lecture and Case |
GNAN |
|
18 |
Financial management in the family firm: family offices (Chapter 9: Zellweger, pages: 412-417 and Chapter 5: Zellweger, pages: 83-89) 1. The responsible shareholder in the family firm 2. Wealth governance |
Lecture |
|
Updated A.Y. 2017-2018
FAMILY BUSINESS
(Prof. Luca Gnan)
Teaching Staff responsible for the Course:
Prof. Luca Gnan
Email: luca.gnan@uniroma2.it
Availability: Contact via email
Prof.ssa Giulia Flamini
E-mail: giulia.flamini@uniroma2.it
Availability: Contact via email
We are committed to making this course a valuable learning experience for you. After the first month, we will spend part of a class session evaluating our progress, and we will make any necessary changes to keep us on track. However, we welcome your feedback at any time in the semester. It is easiest to reach us by email or during office hours, but we are always happy to set up an appointment. Additionally, if you have a disability that requires special accommodation, please let us know ASAP so that we can be helpful to you.
Emails, Office Hours & Feedback on Assignments
We endeavor to answer emails within 1 day. If you have not heard from us within that time, please resend the email. We will post grades & comments online in the materials section of the course website. We will be happy to give feedback and discuss assignments after all grading is complete for a certain assignment. We schedule office hours by email request.
We may answer questions of assignment clarification in class and via emails to benefit the entire class. We may also give extra grades (see below Team Project) during the course that, while generally designed to support learning in the course, will also help your participation grade. These are pass/fail and do not include comments.
Pre-requisites for the Course:
None
Course description and Learning Objectives
Family businesses shows distinct core competencies that can result in unique competitive advantages. They take a long run view of the business—across generations, rather than publicly traded quarterly reports. Their capital can be very patient, owners will sacrifice their salaries in order to make payroll, and they are an integral part of their communities, unlike publicly traded counterparts that might abandon a community at the blink of a budget. They can engender a great deal of loyalty on the part of employees, and the existence of family may reduce agency problems.
Family Businesses also face challenges that threaten their continuity. The challenges are primarily the result of issues presented by the interaction of family, management, and ownership—particularly where the family wishes to perpetuate its influence and/or control from generation to generation. Family firms seem to be as agile in one generation as they are fragile across generations.
Family businesses start with an owner-managed first generation (usually an entrepreneur). The next generation—G2—is the sibling generation, and G3 is the cousin era. The probability of passing the company to the next generation diminishes significantly, with fewer than half making it to G2 and only about less than 15% making it to G3. So, despite the benefits of family, there can be some significant issues.
The course explores and analyzes continuity challenges of family business and their best management practices. The focus of this course is on pragmatic, action-oriented, management, governance, finance, and family/business leadership skills.
Attention is devoted to evaluating family firms and their growth options to provide a roadmap for analyzing how family ownership, control, and management affect performances and how family firms can create and ensure more value through generations.
The course presents seven different sections:
· SECTION 1: Family firms: prevalence and relevance
· SECTION 2: Governance in the family firm
· SECTION 3: Strategic management in the family firm
· SECTION 4: Succession in the family firm
· SECTION 5: Change and transgenerational value creation
· SECTION 6: Interpersonal relationships and conflict in the family firm
· SECTION 7: Financial management in the family firm
The course addresses the governance, the management, and the finance of established family businesses. It examines succession, values, life cycles, business and marketing strategies, conflict resolution, communications, legal, and financial aspects, estate planning, management, philanthropy and other topics that uniquely touch family business governance, management and finance. It will convey the characteristics that differentiate family businesses from other businesses.
One of the features, which make this course unique and particularly modern, is a part of the Section 7: Financial management in the family firm dedicated to the mysterious and fascinating world of the family office. This is the little-known, but key professional practice of advising entire families-in-business, frequently large, diversified and with wide ramifications, about the complete spectrum of activities necessary to ensure that wealth is created, preserved, transmitted and spread across the enlarged family community. These services range from asset allocation to risk management, to education, efficient tax structuring, corporate finance and corporate governance, intra- and inter- generational transmission, philanthropy, etc. Given the enormous amount of wealth and power concerned, this phenomenon shows increasingly importance and starts to attract some focus, particularly by the best graduate students and professional talents.
Upon completion of this course, students should understand:
- The unique assets and vulnerabilities of family enterprises.
- The role of the CEO in governance, management, and the transfer of power.
- The relationship between the role of the board, the family council, and top management in providing effective governance for family business continuity.
- Key family dynamics.
- The relevance for families to manage collectively wealth created in professional ways,
and be able to:
- Identify the various stakeholders and the role of trust among family members and their impact on succession and continuity.
- Discuss the developmental needs and challenges of next generation leaders.
- Analyze the effect of estate taxes on ownership transfer across generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses.
- Explain the importance of strategic planning to family business continuity.
- Explore the critical role and challenges that non-family managers play in family-owned operations.
- Analyze the impact of family culture, family communication, family conflict, and family unity and explore their interaction effects on the family business.
- Assess whether they want to seek employment in family businesses both as key employees/managers or in a professional advisory role.
Teaching methods
Lessons will focus on transferring knowledge and on a strong interaction within the classroom; there are analysis of situations problems and business cases in order to facilitate participants in learning.
Regular attending students (in order to be a regular attending student, a participant should achieve at least an 85% of presence to lectures and case discussions) are strongly recommended to participate to all the lectures and to all the preparations and presentations of the business cases.
To meet its goals, this course uses readings, lectures, exercises, cases, individual and team assignments, and class discussion. Case assignments provide an important foundation for class discussion and must completed prior to each class session. The analytical syllabus (at the end of this document) shows due dates for all cases and other assignments in the class schedule. Lectures will highlight key points from the readings and provide additional information to supplement the readings. Cases will provide you with the opportunity to apply what you have learned to real world issues and scenarios. Because each of you brings unique perspectives and experiences to the class, participation in class discussions and activities is essential to your own learning as well as that of other class members. To enrich further your learning, an MScBA Teaching Assistant will also match you.
Textbook
Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709
Cases
During the course, we will discuss 10 cases:
1. More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45)
2. Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112)
3. Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125)
4. Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166)
5. Managing paradoxes (Chapter 6: Zellweger, pages: 193-194)
6. Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307)
7. Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363)
8. Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491)
9. Tom’s world (Chapter 9: Zellweger, pages: 422-424)
(the following case from Harvard Business School Publishing. You need to register to download the cases at the following link: https://hbr.org, then download the case at the indicated link)
10. Medco Energi Internasional
Case Discussions
We expect that regular attending students are fully engaged in the entire learning process. This means that we expect regular attending students to:
1) prepare the assigned readings of the cases prior to each class;
2) prepare as a group work a PowerPoint presentation on the case, based on the specific assignment;
3) come to class prepared to participate and to discuss in order to enhance the learning of the individual and the class.
On the web site of the course, students find for each case the relative assignment. Please read carefully the questions before the lesson and use them for preparing the PowerPoint presentation.
Each student will be involved the class discussion on the cases and tie the assigned reading for the session. The objective is to bring all class members into the discussion. The cases intend to integrate the concepts from the case into the context of the course. The preparation and the discussion of the cases do not exclude the study of the theoretical concepts useful for the discussion of the cases themselves and for the passing of the exam of the course.
With the cases’ discussions in CLASSROOM, each student will develop:
1. The ability to set the parameters for the problem (key concepts from the case).
2. A depth of knowledge about the case subject (understanding of material, good response to the observations of others).
3. The ability to tie-in case with other course concepts.
4. The ability to get others involved in the discussion.
In order to discuss effectively the cases, students do:
· Be prepared with facts and specific quotes from the case.
· Be prepared to make a comment, ask a question, or make a statement about the case.
During the discussion, students do:
· Take a position on a question or a point.
- Ask clarifying questions.
· Help keep the discussion moving and on track.
· Help draw others into the discussion.
· Integrate theories and content from other cases.
During the discussion, students do not:
· Be unprepared and show your lack of knowledge.
- Monopolize the discussion.
- Make irrelevant comments.
· Be insensitive to other’s desire to speak or to their opinions.
We kindly invite all the regular attending students to build up work groups (MINIMUM 3 PERSONS – MAXIMUM 5 PERSONS). Each work group should prepare a PowerPoint presentation for each case. Into the first slide, each work group should report the names of the students belonging to the group.
The structure of the presentation should follow the following outline:
- One or more introductory slides aimed at describing/reporting the story, the characters, all the necessary elements in order to define clearly the context and the boundaries of the case.
- One slide mentioning the questions of the assignment and underlining the learning goals of the case.
- One or more slides reporting the answers to each question of the assignment.
- One or more slides reporting the final remarks on the case.
- One closing slide about the lessons learned after the group discussion of the case.
How to prepare the PowerPoint presentation of the case?
Introduction – short presentation of case, short description of the problems and situations that should be coped with the discussion.
Diagnosis – Problem setting of the context and of the situation. Description of the mains facts and elements connected with the concepts and models of Family Business (e.g. Ownership issues, conflicts, family culture, governance issues, leadership, managing people, succession, etc.). What went wrong and which actions/situations, instead, were right? Which elements could be considered for the diagnosis?
Solution – Students should provide a possible solution to questions/problems related with the case and a viable and clear indication on how to approach the situation and how to solve it. The entire proposal should represent a consistent action plan in terms of behaviors and expected results.
Conclusions – Conclusions should not be longer than 300-500 words and should provide a description on how the situation and the problem characterized the case, on how Family Business schemata might help to solve the case, and what the proposed solution might generate in terms of family and managerial consequences.
Lessons learned – At the end of the presentation elements/suggestions/advices that we “take home” from the case discussion should be clearly identified and reported.
NOTE: During the case discussion, students should explicitly address the context and the different situations with concepts related with Family Business and with models and theories of this course.
Case Discussions’ Class Participation
We believe that the best way to learn, especially about family Business, is to actively participate in your education. In this class, “participation” is defined in terms of quality contributions to class discussion and exercises. There are four prerequisites for successful participation:
1. Be here on time and prepared. If you are not here, you cannot contribute much to class discussion. If you need to miss class for a predictable reason (e.g., job interview, athletic competition), please notify us at least 24 hours in advance so that we can arrange for any in-class exercises and so that you can obtain the materials distributed during the class. Of course, we realize that in some cases unforeseeable emergencies arise. Although we will not directly penalize you for non-attendance, be aware that multiple absences will indirectly hurt you by preventing you from participating in class, thereby lowering your participation grade. To contribute to class discussion, you must come to class having carefully prepared all assignments (i.e., readings, cases, exercises).
2. Be brave. Everyone in this class is smart, interesting, and has unique life experiences to share. You will get the most out of this course if you ask questions, voice opinions, and express your thoughts to one another. If you feel uncomfortable talking in class, please send me an email or set up an appointment to talk with me early in the semester. We will do everything we can to accommodate each of your individual circumstances, but we can only do so if they are brought to our attention.
3. Be courteous. Successful participation includes treating your classmates in a respectful and professional manner. Listen carefully to the comments and questions that your classmates voice. You may learn something new from their perspectives, and you will be able to avoid simply repeating something that another classmate has said earlier in discussion. Also, it is perfectly acceptable for you to voice disagreement with an opinion provided by another student. Open debate often leads to the most thoughtful and informative class discussions. However, please voice your disagreement in a kind and considerate manner.
4. Be engaged. This class is “unplugged.” Once class starts, all electronics (e.g., computers, cell phones, tablets, etc.) should be turned off and put away. If you need to use a device because of a language or disability issue, you need to secure permission at the beginning of the class. The misuse of an electronic device (e.g., surfing the web or texting) will adversely affect your grade.
In order to facilitate the visioning of its own PowerPoint presentation in classroom, each work group should take a personal computer with PowerPoint installed and an available VGA connection.
By the 8pm of the day before of the case discussion, all regular attending students should send an email to the course’s Instructors, attaching the case presentation prepared. They have to hand over a hard copy of the PowerPoint presentation. ONLY THE HANDING OVER OF THE HARD COPY CERTIFIES THE PREPARATION OF THE CASE FOR THE DISCUSSION. ONLY STUDENTS WHO HAD HANDED OVER ALL THE CASE PRESENTATIONS WILL BE ADMITTED TO THE PRE-EXAM.
Policy for Late Assignments
As in the business world, work must be received on time in order to receive full credit. If you are late on an assignment, your access to the Pre-Exam will be compromised. You are always welcome to hand in an assignment before its due date if you know that you will be busy as the due date approaches. If you think that you will not be able to complete an assignment by the stated due date, please speak with us in advance to make alternative arrangements. Our policy on late assignments will depend on the specific circumstances surrounding the problem, and thus may differ from student to student. Providing advance notice about a late assignment will minimize the penalty you receive on that assignment, but does not guarantee that there will be no penalty for turning the assignment in late.
Other learning sources
Slides and other material will be available on the course website.
THE SLIDES DO NOT REPRESENT A SUPPORT FOR AN EFFECTIVE AND SUCCESFUL PREPARATION TO THE EXAM OF THE COURSE. THEY REPRESENT ONLY A HELP TO FACILITATE THE TRANSFER OF THE KNOWLEDGES TO STUDENTS DURING THE LESSONS.
Attendance
Because of the concentrated nature of the MScBA programme, attendance in class is very important.
Students with less than 85% of attendance to lectures and case discussions (including arriving late or leaving early) will be required to prepare for the exam ALL the chapters of the textbook Zellweger, T. Managing the Family Business: Theory and Practice, Edward Elgar Publishing, 2017: ISBN: 9781783470709 and ALL the cases discussed in classroom.
NOTE : Attendance for the first class session is mandatory as important information regarding the course and the instructors’ expectations are given. If you know in advance that you will be absent for one session, please contact your instructor to ensure that absence from a particular session is acceptable.
Exam
The exam, depending on the number of the registered student, is a written exam or an oral exam.
In case of a written exam, the duration is about 3-4 hours and it includes:
a) Case discussion - You may be given a case study to which some questions may pertain in order to lead the discussion. As you respond to the questions, please use specific content and theories (use names to identify theories and models) as the basis of your analysis. You will not receive credit for your personal opinions unless backed by theory, lecture, and/or text material. Also, describe how you see the content/theory applying to the situation. Your answers will be evaluated based upon both quantity and quality. Answers that are more complete and demonstrate a higher level of understanding and analysis will receive more points.
b) Some questions directly connected to the course textbook – The questions could open, closed (multiple choice), or a combination of the both. You may be asked to discuss the models and the theories presented during the course. You will be asked to interpret some real incidents and to focus your attention to some specific theoretical issues.
Pre-Exam participation and exam grades registering on the booklet
Only regular attending students (85% of attendance to lectures and case discussions, including arriving late or leaving early) that have delivered the hard copies of ALL the case to the Instructors are allowed to take the pre-exam.
Only regular registered students on the DELPHI System will be allowed to register their grade.
The pre-exam grades will be registered on the first official exam date AFTER THE COURSE ENDING. It is compulsory to come on that date of the exam for registering the grade on the Delphi and on the booklet.
Team Project
The purpose of the project is to give your team an opportunity to apply what has been learned in the course (through course lectures, readings, and case discussions) to problems in a family firm of your team's choice.
Class members, regular attending students, will work in teams of four (4) people.
To the Team Project regular attending students will be allowed to achieve a -3/+3 extra points to the final grade of the Pre-Exam. Only regular attending students, taking the Pre-Exam will be accepted for the Team Project.
Your team should identify a family firm to study (Please, no student groups).
Your team is to gather information from people in the family firm through direct contact. You may supplement this information with data from the media, the organization's literature, and other secondary sources. You should identify a relatively recent problem to analyze (i.e., this should not be an historical account of a problem and the company's solution). You should focus your analysis by applying the concepts from the course. While it is acceptable to incorporate several concepts from the course, please aim for depth rather than breadth regarding the use of course concepts. Your goal is to diagnose the mechanisms that are causing the problem or issue of concern in the organization. Initially, you may notice many symptoms (for instance, a crisis after the succession, seemingly an unhealthy family culture, low family members’ commitment and involvement, governance issues, etc.), but your task is to get to the underlying reason for these symptoms. And beware, sometimes the initial symptoms we think we see are not what they appear to be.
There are three broad goals for this assignment:
1. One goal of this assignment is obviously to take the initiative to make a positive contribution to a family firm.
2. Another major goal is to provide an opportunity for you to learn more about family businesses first hand and to use your critical thinking and reflection skills to link your experience with this family firm to your learning in relation to family business theories.
3. The final goal is to provide a forum for you to hone your skills as a team member and leader and to reflect on the learning gained from this team experience. Each team will make a presentation and write a paper that describes what you did for the family firm, what you learned about family business, and what you learned about working on a team.
To meet these broad goals, your team should answer the following questions in the assignments detailed below.
a) What are the issues or problems facing the family firm?
b) What course concepts can be applied to understand why this problem is occurring?
c) What recommendations can you offer to help improve the family business functioning?
Deliverables of the Team Project:
1. The project proposal e-mail is due by email to Instructors by the date of the 9th session of the course by 5pm. It should include:
a) The names of your group members
b) Your team name
c) The name of the organization
d) The name, contact information and level of your contact person
e) The method you will use to gain access to the organization
f) A brief description (one paragraph) of the problem facing the organization.
2. Your written project is due by email to Instructors by the date of the 18th session of the course by 5pm .
It should contain a maximum of 15 double spaced pages (1 cm margins, 12 point font). You will be penalized significantly for exceeding this limit. The limit does not include appendices, which you are free to use to provide charts, figures, or other background material not necessary in the main body of your analysis. However, appendices that are not directly referenced in the main text will not be read. LATE PROJECT WRITE-UPS WILL NOT BE ACCEPTED.
This written project should summarize what you did for/within the family firm, what you have learned about family business, and what you have learned about working on a team.
Grading of the Team Project:
Your group project will be evaluated on the following criteria:
a. Problem definition: How well (i.e., thoroughly and concisely) do you describe the family business context, the relevant parties, and the factors that are important to the problem?
b. Accurate and thorough use of course concepts.
c. Integration of course concepts with information about the family firm and problem, i.e., how well do you integrate course concepts with information about the problem to illuminate the problem in a way that leads to solutions?
d. Extent to which recommendations are consistent with analysis.
e. Quality of written analysis.
Analytical Syllabus
|
# |
Agenda |
Lecture/ Case discussion |
Lecturer |
|
SECTION 1: Family firms: prevalence and relevance |
|||
|
1 |
Introduction of the course (Chapter 1: Zellweger, pages: 1-3) 1. Thematic focus 2. Intended audience 3. Structure and pedagogical tools Defining the family business (Chapter 2: Zellweger, pages: 4-22) 1. The distinction between family and nonfamily firms 2. Defining family business by type of family involvement 3. Circle models of family influence 4. Family firm identity 5. Family business definition |
Lecture |
GNAN |
|
2 |
Prevalence and economic contribution of family firms around the globe (Chapter 3: Zellweger, pages: 24-33) 1. Prevalence of family firms worldwide 2. Economic contribution of family firms 3. Institutional setting and the prevalence of family firms Strengths and weaknesses of family firms (Chapter 4: Zellweger, pages: 36-42) 1. Typical strengths of family firms 2. Typical weaknesses of family firms 3. Bivalent attributes of family firm characteristics CASE STUDY: More than a move to Mexico (Chapter 4: Zellweger, pages: 43-45) |
Lecture and Case |
GNAN |
|
SECTION 2: Governance in the family firm |
|||
|
3 |
Governance in the family firm: premises, corporate and ownership governance (Chapter 5: Zellweger, pages: 46-72) 1. Why do family firms need governance? 2. Typical governance constellations in family firms 3. Performance implications of governance constellations 4. Untangling corporate, ownership, family governance 5. Corporate governance 6. Ownership governance |
Lecture |
GNAN |
|
4 |
Governance in the family firm: family governance (Chapter 5: Zellweger, pages: 73-105) 1. Family governance 2. Governance documents: code of conduct and family charter 3. Governance bodies: family assembly and family council 4. Integrated governance in family firms CASE STUDY: Beretti Holdings—More than a retirement decision (Chapter 5: Zellweger, pages: 109-112) |
Lecture and Case |
GNAN |
|
SECTION 3: Strategic management in the family firm |
|||
|
5 |
Strategic management in the family business: competitive advantages and the agency perspective (Chapter 6: Zellweger, pages: 116-134) 1. Strategic decision making in family firms 2. Conceptualizing the competitive advantage of family firms 3. The agency perspective CASE STUDY: Henkel’s Genthin plant (Chapter 6: Zellweger, page: 125) |
Lecture and Case |
GNAN |
|
6 |
Strategic management in the family business: RBV and OI perspectives (Chapter 6: Zellweger, pages: 137-163) 1. The resource-based perspective 2. The organizational identity perspective CASE STUDY: Branding and CSR at HiPP (Chapter 6: Zellweger, pages: 165-166) |
Lecture and Case |
GNAN |
|
7 |
Strategic management in the family business: institutional and paradox perspectives (Chapter 6: Zellweger, pages: 167-194) 1. The institutional perspective 2. The paradox perspective 3. Generic strategies for family firms 4. Tools for strategic management in family firms CASE STUDY: Managing paradoxes (Chapter 6: Zellweger, pages: 193-194) |
Lecture and Case |
GNAN |
|
SECTION 4: Succession in the family firm |
|||
|
8 |
Succession in the family firm: goals and processual issues (Chapter 7: Zellweger, pages: 203-234) 1. Succession options 2. Opportunities and challenges of succession options 3. Significance of succession options 4. Declining relevance of infra-family succession 5. Sources of complexity in family business succession 6. Structuring the succession process: succession framework 7. Clarifying goals and priorities |
Lecture |
GNAN |
|
9 |
Succession in the family firm: change strategy and who is in charge of the change (Chapter 7: Zellweger, pages: 240-254) 1. Reviewing the firm's strategy 2. Planning the transition of responsibilities |
Lecture |
GNAN |
|
10 |
Succession in the family firm: value, finance, legal, and tax issues (Chapter 7: Zellweger, pages: 258-305) 1. Valuing the firm 2. Financing the succession 3. Defining the legal and tax setup CASE STUDY: Bernet’s choice—Valuation, emotional value, family discount and fair distribution of assets within the family (Chapter 7: Zellweger, pages: 306-307) |
Lecture and Case |
GNAN |
|
SECTION 5: Change and transgenerational value creation |
|||
|
11 |
Change and transgenerational value creation (Chapter 7: Zellweger, pages: 311-356) 1. Change and adaptation in family firms 2. Longevity of family firms 3. Transgenerational value creation in family firms CASE STUDY: Transgenerational value creation at Ahlstrom (Finland) (Chapter 8: Zellweger, pages: 361-363) |
Lecture and Case |
GNAN |
|
SECTION 6: Interpersonal relationships and conflict in the family firm |
|||
|
12 |
Interpersonal relationships and conflict in the family firm: social issues, family values, and perceptions (Chapter 10: Zellweger, pages: 428-466) 1. The social structure of the family 2. Trends in the social structure of the family 3. International variance in family values 4. Understanding interpersonal dynamics in the family firm: a systemic view 5. Justice perceptions |
Lecture |
GNAN |
|
13 |
Interpersonal relationships and conflict in the family firm: managing conflicts (Chapter 10: Zellweger, pages: 468-487) 1. Why family firms are fertile contexts for conflict 2. Types of conflict 3. Conflict dynamics 4. Conflict-management styles 5. Communication strategies 6. How to behave in the face of conflict CASE STUDY: Conflict in the Solomon family (Chapter 10: Zellweger, pages: 488-491) |
Lecture and Case |
GNAN |
|
SECTION 7: Financial management in the family firm |
|||
|
14 |
Financial management in the family firm: differences with no family firms (Chapter 9: Zellweger, pages: 368-379) 1. Why finance is different for family firms 2. Family equity as a distinct asset class 3. Performance of family firms: a short review of the evidence 4. Risk taking in family firms |
Lecture |
GNAN |
|
15 |
Financial management in the family firm: financial tools (Chapter 9: Zellweger, pages: 380-400) 1. Debt financing 2. Equity financing 3. Leverage 4. Value management 5. Key financial indicators 6. Dilemmas in the financial management of family firms |
Lecture |
GNAN |
|
16 |
Financial management in the family firm: financial sustainability (Chapter 9: Zellweger, pages: 402-407) 1. Principles for the sustainable financial management of family firms 2. The role of the CFO in family firms CASE STUDY: Tom’s world (Chapter 9: Zellweger, pages: 422-424) |
Lecture and Case |
GNAN |
|
17 |
Financial management in the family firm: compensations (Chapter 9: Zellweger, pages: 407-411) 1. Management compensation in family firms CASE STUDY: Medco Energi Internasional (HBS 9-207-021) |
Lecture and Case |
GNAN |
|
18 |
Financial management in the family firm: family offices (Chapter 9: Zellweger, pages: 412-417 and Chapter 5: Zellweger, pages: 83-89) 1. The responsible shareholder in the family firm 2. Wealth governance |
Lecture |
|
Updated A.Y. 2016-2017
FAMILY BUSINESS
TEACHING STAFF RESPONSIBLE FOR THE COURSE:
Prof. Luca Gnan
Email: luca.gnan@uniroma2.it
Availability: Contact via email
PRE-REQUISITES FOR THE COURSE:
None
LEARNING OBJECTIVES
Family businesses are characterized by distinct core competencies that can result in unique competitive advantages. They take a long run view of the business—across generations, rather than publicly traded quarterly reports. Their capital can be very patient, owners will sacrifice their salaries in order to make payroll, and they are an integral part of their communities, unlike publicly traded counterparts that might abandon a community at the blink of a budget. They can engender a great deal of loyalty on the part of employees, and the existence of family may reduce agency problems.
Family Businesses also face challenges that threaten their continuity. The challenges are primarily the result of issues presented by the interaction of family, management, and ownership—particularly where the family wishes to perpetuate its influence and/or control from generation to generation. Family firms seem to be as agile in one generation as they are fragile across generations.
Family businesses start with an owner-managed first generation (usually an entrepreneur). The next generation—G2—is the sibling generation, and G3 is the cousin era. The probability of passing the company to the next generation diminishes significantly, with fewer than half making it to G2 and only about less than 15% making it to G3. So, despite the benefits of family, there can be some significant issues.
The course explores and analyzes family business continuity challenges and best management practices. The focus of this course is on pragmatic, action-oriented, management, governance, finance, and family/business leadership skills.
Attention is devoted to evaluating family firms and their growth options to provide a roadmap for analyzing how family ownership, control, and management affect performances and how more value can be created and ensured through generations.
The course is divided into 3 different sections:
• Section I: original features, peculiarities and governance of family firms
• Section II: managerial dynamics and family firms’ financial evaluation
• Section III: family office services
The course addresses the governance and the finance of established family businesses. It examines succession, values, life cycles, marketing strategies, conflict resolution, communications, legal, and financial aspects, estate planning, management, philanthropy and other topics that uniquely touch family business governance and finance. It will convey the characteristics that differentiate family businesses from other businesses.
One of the features which make this course unique and particularly modern is a whole section (number 3) dedicated to the mysterious and fascinating world of the family office. This is the little-known but key professional practice of advising entire families-in-business, frequently large, diversified and with wide ramifications, about the complete spectrum of activities necessary to ensure that wealth is created, preserved , transmitted and spread across the enlarged family community. These services range from asset allocation to risk management, to education, efficient tax structuring, corporate finance and corporate governance, intra- and inter- generational transmission, phylantropy, etc. Given the enormous amount of wealth and power concerned, this phenomenon is getting increasingly importance and starts to attract some focus, particularly by the best graduate students and professional talents.
Upon completion of this course, students should understand:
1. the unique assets and vulnerabilities of family enterprises.
2. the role of the CEO in governance, management, and the transfer of power
3. the relationship between the role of the board, the family council, and top management in providing effective governance for family business continuity
4. key family dynamics
5. how relevant is the for families to collectively manage wealth created in professional ways
and be able to:
1. Identify the various stakeholders and the role of trust among family members and their impact on succession and continuity
2. Discuss the developmental needs and challenges of next generation leaders
3. Analyze the effect of estate taxes on ownership transfer across generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses
4. Explain the importance of strategic planning to family business continuity
5. Explore the critical role and challenges that non-family managers play in family-owned operations
6. Analyze the impact of family culture, family communication, family conflict, and family unity and explore their interaction effects on the family business
7. Assess whether they want to seek employment in family businesses both as key employees/managers or in a professional advisory role
TEACHING METHODS
The adopted teaching method is a Participant-Centered Learning one, that is highly interactive. Each module maybe composed of a frontal lesson, which is a theoretical foundation brick, immediately followed by class open discussion of one or more real cases, and a full debrief with key take-away points. Additional tools will be profitably used, such as role-playing, testimonials, etc.
MAIN REFERENCES
- Poza, E. J. Family Business, First Edition. Mason, OH: Thomson South-Western, 2004.
- L. Gnan, D. Montemerlo, (2006) “Family-firm relationship in Italian SMEs: ownership and governance issues in a double-fold theoretical perspective”, in P. Z. Poutziouris, K. X. Smyrnios e S. B. Klein, Handbook of research on family business, Edward Elgar Publishing.
- de Pedys V., Antonelli A. “ Family office for family business” Oxford management Publishing, 2008, ISBN 978-1-906728-01-4, (available at the following link http://www.oxmp.co.uk/item_det.php?id=94 )
- P. Poutziouris, (2001) ‘Understanding family firms’, in (Ed) Adam Jolly, Institute of Directors-The Growing Business Handbook, London: Kogan Page Chapter 6.3; pp. 9-15 , 4th edition, ISBN 07494 3600 X.
- R. Levin, V. Travis “Small company finance: what the books don’t say” in Harvard Business Review no. 87608, nov-dec 1987.
- Villalonga B. and Amit R. (2005) “How do family ownership, control and management affect firm value”, Journal of financial economics 80 (2006), 385-417 (available on line at www.sciencedirect.com and www.elsevier.com/locate/jfec
- R. Wilson “The family office Report”, FamilyOfficesGroup.com, 2013)
- R.Amit, R.Perl “2012 Family Governance Report” Wharton Global family Alliance, Wharton School, Univ . of Pennsylvania
As far as the textbooks are concerned , students will need to prepare the following sections:
- Poza, E. J. Family Business, Second Edition. Mason, OH: Thomson South-Western, 2006 :
Chapter 5 pp. 87-104 (Estate and Ownership transfer planning)
Chapter 6 pp. 105-120 (Promoting Strategic Growth)
Chapter 7 pp. 121-136 (The critical role of nonfamily managers)
Chapter 8 pp. 137-152 (Family Business Governance)
Chapter 9 pp. 153-167 (Family Culture)
Chapter 11 pp. 271-290 (Family meetings, councils and family offices)
- L. Gnan, D. Montemerlo (2006): all
- P.Poutziouris (2001) : all
- B. Villalonga, R. Amit (2005) : sections 1,2,3,5
- R. Levin, V. Travis (1987) : all
- R. Amit, H. Lichtenstein, “Benchmarking the Single Family Office” Wharton Global Family Alliance , Wharton School, Univ. Of Pennsylvania, IESE, Univ. of Navarra
- R. Wilson “The family Office Report, 2013, @ FamilyOfficesGroup.com
During the course, 9 cases will be discussed:
(the following 2 cases from the textbook Poza, E. J. Family Business, Second Edition. Mason, OH: Thomson South-Western, 2006 and other sources):
1. The Vega Food Company
2. The Grupo Ferrè Rangel
(the following 6 cases from Harvard Business School Publishing. You need to register to download the cases at the following link: https://hbr.org/registration?conversationld=1011637, then download each individual case at the indicated link)
3. “R & R” : http://hbr.org/product/r-r/an386019-PDF-ENG?Ntt=mossi
4. “Anderson Steel service inc” : http://hbr.org/product/anderson-steel-service-inc/an/899011-PDF-ENG?Ntt=davis%2520%2520anderson
5. “Matthew A. Hunter” : http://hbr.org/product/matthew-a-hunter/an/806203-PDF-ENG?Ntt=davis%2520%2520malhotra
6. “Khalil Abdo Group”: http://hbr.org/product/khalil-abdo-group/an/898011-PDF-ENG?Ntt=kholil
7. “Butler Lumber company” : http://hbr.org/product/butler-lumber-co/an/292013-PDF-ENG?Ntt=butler%2520lumber
8. “Pitcairn family Heritage fund”: http://hbr.org/product/pitcairn-family-heritage-r-fund/an/208073-PDF-ENG?Ntt=villalonga&Nao=10
and
9. “Kff or the taramosalada kings” in “The growing business handbook” (cited above) chapter 6.1, pp 107-112; or in P. Poutziouris , D. Pistrui (editors) “Family business research in the 3rd millennium:building bridges between theory and practice” FFI publications, Oct 2001
10. Medco Energi Internasional (distributed by the teacher)
CASE DISCUSSIONS
Students are expected to be fully engaged in the entire learning process. This means that students need to prepare the assigned readings of the cases prior to each class and come to class prepared to participate in group work and/or discussions to enhance the learning of the individual and the class. Students will find the relative assignment for each case on the website. Please read the questions carefully before the lesson.
The objective is to involve all the class members in the discussion. The cases are designed to integrate the concepts from the case into the context of the course.
With case discussions, each student will develop:
1. The ability to set the parameters for the problem (key concepts from the case).
2. Ample knowledge regarding the subject of the case (understanding of material, good response to the observations of others).
3. The ability to connect the case to other course concepts.
4. The ability to involve others in the discussion.
In order to effectively discuss the cases, students need to be:
• prepared with facts and specific quotes from the case.
• prepared to comment, ask questions, or make observations about the case.
During the discussion, students need to:
• take a position on a question or a point.
• ask questions to clarify a point.
• help keep the discussion moving and on track.
• help draw others into the discussion.
• integrate theories and content from other cases.
During the discussion, students should not:
• come unprepared and show your lack of knowledge.
• monopolizes the discussion.
• make irrelevant comments.
• be insensitive to other’s desire to speak or share opinions.
OTHER LEARNING SOURCES
Slides and other material will be available on the course website.
ATTENDANCE
Because of the concentrated nature of the MScBA programme, attendance in class is very important. Students who miss more than 6 hours (including arriving late or leaving early) will be required to prepare ALL the chapters of the textbooks and other materials for the exam.
NOTE: Attendance for the first class session is mandatory as important information regarding the course and the instructors’ expectations are given. If you know in advance that you will be absent for one session, please contact your instructor to ensure that absence from a particular session is acceptable.
EXAM
The exam, depending on the number of the registered student, is a written exam or an oral exam.
I° - Written exam) You may be given questions to answer regarding a case study. As you respond to the questions, please use specific content and theories (use names to identify theories and models) as the basis of your analysis. You will not receive credit for your personal opinions unless backed by theory, lecture, and/or text material. Moreover, describe how the content/theory can be applied to the situation. Your answers will be evaluated on both quantity and quality. Answers that are more detailed and demonstrate a higher level of understanding and analysis will receive more points.
II° - Oral exam) You may be asked to discuss your written answers to the case questions and to focus on some specific theoretical issues.
ANALYTICAL SYLLABUS
Section I :
Features and governance of family firms
1 2 h 1. Course intro : family business. Key features and presence in Italy and other countries Lecture GNAN
2 2 h 2. Promoting strategic growth and the critical role of non family managers (POZA Chapter 6 and 7, pp. 105-136) Lecture GNAN
3 2h 3. Family business governance (POZA Chapter 8, pp. 137-152) Lecture GNAN
4 2h 4. The Vega Food Company (POZA Case 6, pp. 188-194) Lecture and case GNAN
5 2h 5. Family-firm relationship in Italian SMEs (Gnan-Montemerlo, 2006) Lecture GNAN
6 2h 6. The Grupo Ferrè Rangel (POZA Case 7, pp. 195-208) Lecture and Case GNAN
7 2h 7. The Family Culture (POZA Chapter 9, pp. 153-167) Lecture GNAN
8 2h 8. Estate and Ownership transfer planning (POZA Chapter 5, pp. 87-104) Lecture GNAN
Section II:
Managerial dynamics and financial evaluation of family firms
9 2h 9. The three circles model: case “Anderson steel services inc”* (Poutziouris 2001) Lecture and case GNAN
10 2h 10. Power, Negotiation and compensation in the family business context: case “ Matthew A. Hunter”* (Villalonga 2006, Poutziouris 2001) Lecture and case GNAN
11 2h 11. Transmission factors and working together in the family: case “Khalil Abdo”*(Poutzioris 2001, Villalonga 2006) Lecture and case GNAN
12 2h 12. The entrepreneurial manager: case “r & r”* Lecture and case GNAN
13 2h 13. Financial Evaluation of a family business: case “Butler Lumber”*(Levin- Travis 1987) Lecture and Case DE PEDYS
14 2h 14. Financing growth and exit strategy: case “kff or the taramosalada kings”*(Levin-Travis 1987) Lecture and case DE PEDYS
Section III:
Family office services
15 2h 15. Family office: structure of services for complex needs of entrepreneurial families (Poza chapter 11 pp. 271-290 ; de Pedys V., Antonelli A. “ Family office for family business” Oxford management Publishing, 2008, ISBN 978-1-906728-01-4) Lecture DE PEDYS
16 2h 16. Multi-Family office asset management : case “Pitcairn family Heritage fund ” (R. Wilson “The family office Report”, FamilyOfficesGroup.com, 2013) Lecture and Case DE PEDYS
17 2h 17. Asset related services and private banking: family governance, family conflicts and dynamics in the world of wealth management (R.Amit, R.Perl “2012 Family Governance Report” Wharton Global family Alliance, Wharton School, Univ . of Pennsylvania) + Medco Energi Internasional Case Lecture and case DE PEDYS
18 2h 18. Family office services: international evolution and course wrap up + QFOP exam : a sample (The Family Office Book: Investing Capital for the Ultra-Affluent (Wiley Finance), by Richard C. Wilson, First Edition. ISBN: 978-1118185360) Lecture and testimonial DE PEDYS
*for availability of cases, see above, section “main references”
Updated A.Y. 2016-2017
FAMILY BUSINESS
TEACHING STAFF RESPONSIBLE FOR THE COURSE:
Prof. Luca Gnan
Email: luca.gnan@uniroma2.it
Availability: Contact via email
PRE-REQUISITES FOR THE COURSE:
None
LEARNING OBJECTIVES
Family businesses are characterized by distinct core competencies that can result in unique competitive advantages. They take a long run view of the business—across generations, rather than publicly traded quarterly reports. Their capital can be very patient, owners will sacrifice their salaries in order to make payroll, and they are an integral part of their communities, unlike publicly traded counterparts that might abandon a community at the blink of a budget. They can engender a great deal of loyalty on the part of employees, and the existence of family may reduce agency problems.
Family Businesses also face challenges that threaten their continuity. The challenges are primarily the result of issues presented by the interaction of family, management, and ownership—particularly where the family wishes to perpetuate its influence and/or control from generation to generation. Family firms seem to be as agile in one generation as they are fragile across generations.
Family businesses start with an owner-managed first generation (usually an entrepreneur). The next generation—G2—is the sibling generation, and G3 is the cousin era. The probability of passing the company to the next generation diminishes significantly, with fewer than half making it to G2 and only about less than 15% making it to G3. So, despite the benefits of family, there can be some significant issues.
The course explores and analyzes family business continuity challenges and best management practices. The focus of this course is on pragmatic, action-oriented, management, governance, finance, and family/business leadership skills.
Attention is devoted to evaluating family firms and their growth options to provide a roadmap for analyzing how family ownership, control, and management affect performances and how more value can be created and ensured through generations.
The course is divided into 3 different sections:
• Section I: original features, peculiarities and governance of family firms
• Section II: managerial dynamics and family firms’ financial evaluation
• Section III: family office services
The course addresses the governance and the finance of established family businesses. It examines succession, values, life cycles, marketing strategies, conflict resolution, communications, legal, and financial aspects, estate planning, management, philanthropy and other topics that uniquely touch family business governance and finance. It will convey the characteristics that differentiate family businesses from other businesses.
One of the features which make this course unique and particularly modern is a whole section (number 3) dedicated to the mysterious and fascinating world of the family office. This is the little-known but key professional practice of advising entire families-in-business, frequently large, diversified and with wide ramifications, about the complete spectrum of activities necessary to ensure that wealth is created, preserved , transmitted and spread across the enlarged family community. These services range from asset allocation to risk management, to education, efficient tax structuring, corporate finance and corporate governance, intra- and inter- generational transmission, phylantropy, etc. Given the enormous amount of wealth and power concerned, this phenomenon is getting increasingly importance and starts to attract some focus, particularly by the best graduate students and professional talents.
Upon completion of this course, students should understand:
1. the unique assets and vulnerabilities of family enterprises.
2. the role of the CEO in governance, management, and the transfer of power
3. the relationship between the role of the board, the family council, and top management in providing effective governance for family business continuity
4. key family dynamics
5. how relevant is the for families to collectively manage wealth created in professional ways
and be able to:
1. Identify the various stakeholders and the role of trust among family members and their impact on succession and continuity
2. Discuss the developmental needs and challenges of next generation leaders
3. Analyze the effect of estate taxes on ownership transfer across generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses
4. Explain the importance of strategic planning to family business continuity
5. Explore the critical role and challenges that non-family managers play in family-owned operations
6. Analyze the impact of family culture, family communication, family conflict, and family unity and explore their interaction effects on the family business
7. Assess whether they want to seek employment in family businesses both as key employees/managers or in a professional advisory role
TEACHING METHODS
The adopted teaching method is a Participant-Centered Learning one, that is highly interactive. Each module maybe composed of a frontal lesson, which is a theoretical foundation brick, immediately followed by class open discussion of one or more real cases, and a full debrief with key take-away points. Additional tools will be profitably used, such as role-playing, testimonials, etc.
MAIN REFERENCES
- Poza, E. J. Family Business, First Edition. Mason, OH: Thomson South-Western, 2004.
- L. Gnan, D. Montemerlo, (2006) “Family-firm relationship in Italian SMEs: ownership and governance issues in a double-fold theoretical perspective”, in P. Z. Poutziouris, K. X. Smyrnios e S. B. Klein, Handbook of research on family business, Edward Elgar Publishing.
- de Pedys V., Antonelli A. “ Family office for family business” Oxford management Publishing, 2008, ISBN 978-1-906728-01-4, (available at the following link http://www.oxmp.co.uk/item_det.php?id=94 )
- P. Poutziouris, (2001) ‘Understanding family firms’, in (Ed) Adam Jolly, Institute of Directors-The Growing Business Handbook, London: Kogan Page Chapter 6.3; pp. 9-15 , 4th edition, ISBN 07494 3600 X.
- R. Levin, V. Travis “Small company finance: what the books don’t say” in Harvard Business Review no. 87608, nov-dec 1987.
- Villalonga B. and Amit R. (2005) “How do family ownership, control and management affect firm value”, Journal of financial economics 80 (2006), 385-417 (available on line at www.sciencedirect.com and www.elsevier.com/locate/jfec
- R. Wilson “The family office Report”, FamilyOfficesGroup.com, 2013)
- R.Amit, R.Perl “2012 Family Governance Report” Wharton Global family Alliance, Wharton School, Univ . of Pennsylvania
As far as the textbooks are concerned , students will need to prepare the following sections:
- Poza, E. J. Family Business, Second Edition. Mason, OH: Thomson South-Western, 2006 :
Chapter 5 pp. 87-104 (Estate and Ownership transfer planning)
Chapter 6 pp. 105-120 (Promoting Strategic Growth)
Chapter 7 pp. 121-136 (The critical role of nonfamily managers)
Chapter 8 pp. 137-152 (Family Business Governance)
Chapter 9 pp. 153-167 (Family Culture)
Chapter 11 pp. 271-290 (Family meetings, councils and family offices)
- L. Gnan, D. Montemerlo (2006): all
- P.Poutziouris (2001) : all
- B. Villalonga, R. Amit (2005) : sections 1,2,3,5
- R. Levin, V. Travis (1987) : all
- R. Amit, H. Lichtenstein, “Benchmarking the Single Family Office” Wharton Global Family Alliance , Wharton School, Univ. Of Pennsylvania, IESE, Univ. of Navarra
- R. Wilson “The family Office Report, 2013, @ FamilyOfficesGroup.com
During the course, 9 cases will be discussed:
(the following 2 cases from the textbook Poza, E. J. Family Business, Second Edition. Mason, OH: Thomson South-Western, 2006 and other sources):
1. The Vega Food Company
2. The Grupo Ferrè Rangel
(the following 6 cases from Harvard Business School Publishing. You need to register to download the cases at the following link: https://hbr.org/registration?conversationld=1011637, then download each individual case at the indicated link)
3. “R & R” : http://hbr.org/product/r-r/an386019-PDF-ENG?Ntt=mossi
4. “Anderson Steel service inc” : http://hbr.org/product/anderson-steel-service-inc/an/899011-PDF-ENG?Ntt=davis%2520%2520anderson
5. “Matthew A. Hunter” : http://hbr.org/product/matthew-a-hunter/an/806203-PDF-ENG?Ntt=davis%2520%2520malhotra
6. “Khalil Abdo Group”: http://hbr.org/product/khalil-abdo-group/an/898011-PDF-ENG?Ntt=kholil
7. “Butler Lumber company” : http://hbr.org/product/butler-lumber-co/an/292013-PDF-ENG?Ntt=butler%2520lumber
8. “Pitcairn family Heritage fund”: http://hbr.org/product/pitcairn-family-heritage-r-fund/an/208073-PDF-ENG?Ntt=villalonga&Nao=10
and
9. “Kff or the taramosalada kings” in “The growing business handbook” (cited above) chapter 6.1, pp 107-112; or in P. Poutziouris , D. Pistrui (editors) “Family business research in the 3rd millennium:building bridges between theory and practice” FFI publications, Oct 2001
10. Medco Energi Internasional (distributed by the teacher)
CASE DISCUSSIONS
Students are expected to be fully engaged in the entire learning process. This means that students need to prepare the assigned readings of the cases prior to each class and come to class prepared to participate in group work and/or discussions to enhance the learning of the individual and the class. Students will find the relative assignment for each case on the website. Please read the questions carefully before the lesson.
The objective is to involve all the class members in the discussion. The cases are designed to integrate the concepts from the case into the context of the course.
With case discussions, each student will develop:
1. The ability to set the parameters for the problem (key concepts from the case).
2. Ample knowledge regarding the subject of the case (understanding of material, good response to the observations of others).
3. The ability to connect the case to other course concepts.
4. The ability to involve others in the discussion.
In order to effectively discuss the cases, students need to be:
• prepared with facts and specific quotes from the case.
• prepared to comment, ask questions, or make observations about the case.
During the discussion, students need to:
• take a position on a question or a point.
• ask questions to clarify a point.
• help keep the discussion moving and on track.
• help draw others into the discussion.
• integrate theories and content from other cases.
During the discussion, students should not:
• come unprepared and show your lack of knowledge.
• monopolizes the discussion.
• make irrelevant comments.
• be insensitive to other’s desire to speak or share opinions.
OTHER LEARNING SOURCES
Slides and other material will be available on the course website.
ATTENDANCE
Because of the concentrated nature of the MScBA programme, attendance in class is very important. Students who miss more than 6 hours (including arriving late or leaving early) will be required to prepare ALL the chapters of the textbooks and other materials for the exam.
NOTE: Attendance for the first class session is mandatory as important information regarding the course and the instructors’ expectations are given. If you know in advance that you will be absent for one session, please contact your instructor to ensure that absence from a particular session is acceptable.
EXAM
The exam, depending on the number of the registered student, is a written exam or an oral exam.
I° - Written exam) You may be given questions to answer regarding a case study. As you respond to the questions, please use specific content and theories (use names to identify theories and models) as the basis of your analysis. You will not receive credit for your personal opinions unless backed by theory, lecture, and/or text material. Moreover, describe how the content/theory can be applied to the situation. Your answers will be evaluated on both quantity and quality. Answers that are more detailed and demonstrate a higher level of understanding and analysis will receive more points.
II° - Oral exam) You may be asked to discuss your written answers to the case questions and to focus on some specific theoretical issues.
ANALYTICAL SYLLABUS
Section I :
Features and governance of family firms
1 2 h 1. Course intro : family business. Key features and presence in Italy and other countries Lecture GNAN
2 2 h 2. Promoting strategic growth and the critical role of non family managers (POZA Chapter 6 and 7, pp. 105-136) Lecture GNAN
3 2h 3. Family business governance (POZA Chapter 8, pp. 137-152) Lecture GNAN
4 2h 4. The Vega Food Company (POZA Case 6, pp. 188-194) Lecture and case GNAN
5 2h 5. Family-firm relationship in Italian SMEs (Gnan-Montemerlo, 2006) Lecture GNAN
6 2h 6. The Grupo Ferrè Rangel (POZA Case 7, pp. 195-208) Lecture and Case GNAN
7 2h 7. The Family Culture (POZA Chapter 9, pp. 153-167) Lecture GNAN
8 2h 8. Estate and Ownership transfer planning (POZA Chapter 5, pp. 87-104) Lecture GNAN
Section II:
Managerial dynamics and financial evaluation of family firms
9 2h 9. The three circles model: case “Anderson steel services inc”* (Poutziouris 2001) Lecture and case GNAN
10 2h 10. Power, Negotiation and compensation in the family business context: case “ Matthew A. Hunter”* (Villalonga 2006, Poutziouris 2001) Lecture and case GNAN
11 2h 11. Transmission factors and working together in the family: case “Khalil Abdo”*(Poutzioris 2001, Villalonga 2006) Lecture and case GNAN
12 2h 12. The entrepreneurial manager: case “r & r”* Lecture and case GNAN
13 2h 13. Financial Evaluation of a family business: case “Butler Lumber”*(Levin- Travis 1987) Lecture and Case DE PEDYS
14 2h 14. Financing growth and exit strategy: case “kff or the taramosalada kings”*(Levin-Travis 1987) Lecture and case DE PEDYS
Section III:
Family office services
15 2h 15. Family office: structure of services for complex needs of entrepreneurial families (Poza chapter 11 pp. 271-290 ; de Pedys V., Antonelli A. “ Family office for family business” Oxford management Publishing, 2008, ISBN 978-1-906728-01-4) Lecture DE PEDYS
16 2h 16. Multi-Family office asset management : case “Pitcairn family Heritage fund ” (R. Wilson “The family office Report”, FamilyOfficesGroup.com, 2013) Lecture and Case DE PEDYS
17 2h 17. Asset related services and private banking: family governance, family conflicts and dynamics in the world of wealth management (R.Amit, R.Perl “2012 Family Governance Report” Wharton Global family Alliance, Wharton School, Univ . of Pennsylvania) + Medco Energi Internasional Case Lecture and case DE PEDYS
18 2h 18. Family office services: international evolution and course wrap up + QFOP exam : a sample (The Family Office Book: Investing Capital for the Ultra-Affluent (Wiley Finance), by Richard C. Wilson, First Edition. ISBN: 978-1118185360) Lecture and testimonial DE PEDYS
*for availability of cases, see above, section “main references”
Updated A.Y. 2015-2016
The course is divided into 3 different sections:
• Section I: original features, peculiarities and governance of family firms
• Section II: managerial dynamics and family firms’ financial evaluation
• Section III: family office services
The course addresses the governance and the finance of established family businesses. It examines succession, values, life cycles, marketing strategies, conflict resolution, communications, legal, and financial aspects, estate planning, management, philanthropy and other topics that uniquely touch family business governance and finance. It will convey the characteristics that differentiate family businesses from other businesses.
Upon completion of this course, students should understand:
1. the unique assets and vulnerabilities of family enterprises.
2. the role of the CEO in governance, management, and the transfer of power
3. the relationship between the role of the board, the family council, and top management in providing effective governance for family business continuity
4. key family dynamics
and be able to:
1. Identify the various stakeholders and the role of trust among family members and their impact on succession and continuity
2. Discuss the developmental needs and challenges of next generation leaders
3. Analyze the effect of estate taxes on ownership transfer across generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses
4. Explain the importance of strategic planning to family business continuity
5. Explore the critical role and challenges that non-family managers play in family-owned operations
6. Analyze the impact of family culture, family communication, family conflict, and family unity and explore their interaction effects on the family business
Updated A.Y. 2015-2016
The course is divided into 3 different sections:
• Section I: original features, peculiarities and governance of family firms
• Section II: managerial dynamics and family firms’ financial evaluation
• Section III: family office services
The course addresses the governance and the finance of established family businesses. It examines succession, values, life cycles, marketing strategies, conflict resolution, communications, legal, and financial aspects, estate planning, management, philanthropy and other topics that uniquely touch family business governance and finance. It will convey the characteristics that differentiate family businesses from other businesses.
Upon completion of this course, students should understand:
1. the unique assets and vulnerabilities of family enterprises.
2. the role of the CEO in governance, management, and the transfer of power
3. the relationship between the role of the board, the family council, and top management in providing effective governance for family business continuity
4. key family dynamics
and be able to:
1. Identify the various stakeholders and the role of trust among family members and their impact on succession and continuity
2. Discuss the developmental needs and challenges of next generation leaders
3. Analyze the effect of estate taxes on ownership transfer across generations of family business owners and the implications of ownership structures on the competitive advantages of family businesses
4. Explain the importance of strategic planning to family business continuity
5. Explore the critical role and challenges that non-family managers play in family-owned operations
6. Analyze the impact of family culture, family communication, family conflict, and family unity and explore their interaction effects on the family business