FAMILY BUSINESSES AND THE DIFFICULTIES ENCOUNTERED BY

Abstract

There are few family owned businesses that survive to the next generation. In general, 30% of these businesses are passed on to second generation families and less than 15% survive to third generation families. There has been little research done on third generation family businesses. Therefore the main purpose of this paper is to identify the principal difficulties of passing on managerial skills to the third generation owners. This study uses a case study of a Brazilian family organization composed of twelve enterprises. The instrument to collect data was an individually guided recorded interview with all of the family managers (1ª, 2ª e 3ª generation). The technique applied, was suggested for Miles & Huberman (1994) to group the data in analytical categories to facilitate the analyzed speeches contained in the 49 blocks of responses. As a result, the transition the business to the third generation owners has been strongly associated with the relation between family and business by the following factors: a) the succession process influenced by emotional and family values; b) conflicts, rivalries and divergences of strategic visions and business goals between the family generations; c) lack of professional criteria to hire relatives; and d) fragility of communication and consequent asymmetry of information among the family members.