What are the advantages and disadvantages of family business?

The advantages of family business mainly include:

1. Advantages of initial financing.

2. Low management cost and low supervision cost.

3. High decision-making efficiency.

4. Internal information is relatively smooth, and corporate behavior efficiency is high.

5. In an unfair society with imperfect rule of law, the risk of illegal responsibility is relatively low.

6, cronies have a strong cohesion.

The disadvantages of family business are:

1, the family enterprise management system conflicts with the modern enterprise management system, which restricts the enterprise from becoming bigger and stronger.

2. It is not conducive to outstanding talents to enter the core class of enterprises.

3. Absolute control is not conducive to the full play of employees' enthusiasm.

4. Family conflicts penetrate into enterprises and test their survival.

5. Independent decision-making is difficult and risky.

6. Corporate profits are difficult to distribute.

Extended data

Types of family businesses:

1, pure family business

This family-owned enterprise, from boss to manager to employee, is a family. This kind of enterprise is the purest family-owned enterprise. This family-owned enterprise is generally small in scale and is often called a workshop.

2. Traditional family business

In traditional family-owned enterprises, the head of the family controls power, and key positions are basically held by family members, while outsiders can only hold unimportant positions.

3. Modern family business

Modern family-owned enterprises are owned by families, and the management rights are given to capable family or non-family members. In other words, the family holds ownership and equity, but the management right is not necessarily a family member. If the family members have the ability, they will assume management responsibilities; If the family doesn't have this ability, give it to a capable non-family. This is a trend of modern family businesses, and many large international family businesses are basically taking this road. The key to this road is that ownership and management rights must be separated.

References:

Baidu encyclopedia-family business