The Ultimate Management Challenge For A Family Business

In this week’s chapter The Ultimate Management Challenge we read about succession plans and what that can mean for a family business. According to the reading about 40% of businesses in the world are family businesses that have more than one generation working for them and will have to come up with a succession plan if they don’t already have one. A Succession plan is simply passing on the business leadership and power from one senior generation to another younger generation. When reading this book I learned a lot about the rags to rags, shirtsleeves to shirtsleeves phenomenon, and why it can and does occur, as well as 2 main things a family business must have to be successful. If the new generation comes in with the same enthusiasm and values as the previous generation then the transition to new management will be much easier and in theory there will still be a company for the upcoming generations to be a part of and profit from, this is the idea of rags to riches. Sad ly this isn’t the most common way succession plans work, most commonly the second or third generation comes in and doesn’t share the enthusiasm, vision, or values as the previous generation(s) had and runs the business into the ground. This trend has many names: rags to rags, shirtsleeves to shirtsleeves, etc. however it all has the same general meaning, the wealth or success of the business does not exceed 3 generations. Although I find the loss of enthusiasm, vision and/ or values tends to be the mostShow MoreRelatedStatement of Purpose for Engineering Management Program Essay734 Words   |  3 Pagescontinually setting goals and challenges for ourselves. Those who dont have challenges dont have responsibilities.† - C. Joy Bell C. Hailing from a family which had always encouraged me to study and achieve my goals, I have completed my Bachelors in Engineering from GITAM(Gandhi Institute of technology And Management) University with a first class degree. 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