Advantage and Disadvantage of Family Business

Family business is a corporation or conglomerate, wherein each member of the family has a significant ownership or interest and commitment. Family business may have some owners who aren’t members of the family. There are some cases wherein the family business is managed by individual who are not part of the family.

On the other hand, the members of the family are usually involved in terms of operations of the business, which can make or break the function of the company.

Benefits of Family Business

One of the primary advantages of family business is each owner can feel more assured and trusted because they know the people they are working with. As you know, family members are more probable to sustain dedication and loyalty for their business success. Scheduling can be easier because you have an easy communication with them. There are more leniencies within the company in times a mistake occurs between members of the family.


There are also several disadvantages in terms of running a family business. The owner of the business tends to promote their family members despite the fact that they are incompetent for the position. In addition, a family member may also take the chance to get an advantages even if it doesn’t supported by the policies of the companies. This is because of the feeling of entitlement of being member of the family. This is somewhat common issues between the employees who are not member of the family. That is why it is very important that if you were promote your family member to a higher position be sure that he or she is a competent one.


There’s a prevention and solution if problem arises. This can be avoided if the family business is has a well structured policies and guidelines. It can be a great help in the effective control of the business operation. As an example, employees who are always late should be reprimanded and it is also the same rule for a family member working in a company, so that they can be a great example for other employees, even if they are member of the family they still have to follow the rules and regulations. Succession plan is also important; it would be nice to inform the company who will be the one who will replace you as early to avoid any issues and misunderstanding. Family quarrels could greatly affect the stand and performance of the company.


One of the common issues in family business is the inability to separate their personal things in the business. Let’s say one member has an issue or problem with other member of the business and he or she cannot stand to work with him, this can result to poor performance to work. That is why it is best to separate your personal matters at work.

1 Comment

  • gghhnvd said on February 5, 2015
    Hello i hate family businesses. Education is affected a lot.


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