Advantages and Disadvantages: Doing Business

In today’s world, the modes of business are divided into family business and public business. As the name shows, family business is owned by more than one family member, and passed along to next generations. Nowadays, there are 5.5 million family businesses in America. (Astrachan 2003) Family business is also an important part of Gross Domestic Product, constituting 57%. Some of the world’s most successful businesses are family business. In addition, around one-third of all companies in Fortune 500 are family business. (Businessweek.com 2006) The future of the family business will thrive and contribute domestic economy. It seems that there are lots of advantages of running family business; however, it also combines disadvantages. The merits are far more than drawbacks. The coherent goal, loyalty and individual superiority are the advantages of running family business, and easily overshadow any negative aspects. The essay will expound the advantages, disadvantages and the effective solution of the problems.

There are numerous advantages of running family business. A major advantage is that they understand each other well, and employees have a deep trust in one another (Jim 2001) If someone makes a mistake involuntarily, family member have more leniency. They are familiar with one another and know each other’s strengths so that suitable work can be allocated appropriately, and the work can be done effectively. Moreover, they will discuss problems, and share ideas in the meeting to achieve the common goals due to good communication. Another advantage is the loyalty. Some employees may leave the companies when the profits are terrible. Whereas, family members are likely to work together in hard time, even if their company is in depression and cash-flow crisis. They tend to fight harder due to pressure from family members. Family members put more effort into the business due to the strong sense of responsibility and honor. They are willing to work extra hours without additional pay as they work for the same goals. A great example includes my father who is a manager in his families’ business. He always goes out early and comes back home late. Although he is a leader, his working hours are longer than the staffs. However, non-family member don’t have as much as motivation and desire to work for the firm. Thus, this kind of business mode, the company is effective and profitable.

The last advantage is that the generations inherit the family business, and receive formal training. Nowadays, the number of the undergraduate students swells surprisingly, and the competition between them is stronger. More and more undergraduate students cannot find good jobs. In the United States nearly 13% of undergraduate students have trouble finding a job; even postgraduate students find it difficult. The condition of the job market is so competitive that a tremendous number of young people lose their jobs. Nevertheless, the elder arrange work positions for their succeeding generation at an early age. Without a doubt, they do not need to worry about their working future, and they also receive formal training at early age. Take myself as an example; my father is a businessman who wants me to run his company after graduation. Thus, he always teaches me knowledge about marketing, and I take business classes on the weekend. In family business, they not only get the job easily, but only have excellent work condition.

On the other hand, a family business has its own disadvantages. The different ideas elder have may will breed jealousies among generations, which could destroy the normal operation of company. A family has some siblings, and therefore comparison and competition occur among them. The elders pay more attention to the talented

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