Family business: comparison with non-family, key differences and features of operation

Abstract

One of the traditional methods of the investigation of family business, as the most common and sustainable form of management in the world, is its comparison with the activities of non-family businesses. This approach makes it possible` to introduce into the analysis a fairly large list of indicators, which in turn increases the understanding of the functioning of both family and non-family companies. In this paper the investigation of family enterprises is carried out on the basis of developments of leading foreign scientists and the table is formed. Thus, the invesstigation demonstrates significant differences between family and non-family business, which are reflected in the general indicators, structural organization, forms of ownership, management, theoretical justification of doing business, business goals, available resources of the firm. Differences in both interior and exterior of the operation of these business facilities are defined. In general, the family business is socially oriented, aimed at stable moderate growth, resilient in times of crisis, adaptive, risk-averse, aimed at the long-term perspective of existence in order to pass it on to the next family generation. Analyzing the social systems of economically successful countries, such as the United States, Japan, the European Union, the Persian Gulf and East Asia, we find that the main form of ownership belongs to the family business. More detailed analysis of the economic systems of these countries reveals the formation of the balance between the ownership structure and the power structure. The ownership structure is characterized by large percentage of independent private owners, where the family form of ownership is widely represented in the leading sectors of the economy, and the family business itself is the dominant form of entrepreneurship. It is the family business that configures the property system within a single country, forming powerful social stratum of independent owners who control the main resources of the state. The presence of this layer results in the evolution of power democracy, where state institutions do not have declarative powers, but operate in real formal democracy. The level of real democracy (democracy) in the country is determined not by freedom-loving articles of the Constitution, but by the number of independent owners in the state. Family businesses and independent family owners are closely linked to local communities, are an integral part of them, providing jobs and employment in the regions, which is the basis for economic prosperity of local communities and the country as a whole.