CATHERINE T RAMOS

BS Entrepreneurship I-4

CHAPTER 7

Entrepreneurial families: Succession and Continuity

1 Why is an entrepreneurial family business different from other family businesses?

Entrepreneurial families are dynamic creatures that transmit their company culture
through family member interactions. They are focused on entrepreneurial objectives
or motives. Compared to most family businesses that simply want a steady income.
2 What is trans-generational entrepreneurship and what are the elements of ‘familiness’?
Transgenerational entrepreneurship looks at the process that help family firms
succeed beyond the first generation. Families are the dominant form of business
around the world.
Elements of Familiness
- Financial -Physical -Knowledge -Intangible
- Human -Social -Cultural
3 What are the four kinds of family capital?

-Family social capital

-Family human capital
-Family financial capital
-Family emotional capital

4 Talk about the size and impact of family businesses on Asia–Pacific economies, and in
particular within the economy you are most familiar with.
United Laboraties (UNILAB), they are the biggest pharmaceutical manufacturer in
the Philippines that began as a small drugstore in Binondo Manila. It is founded by
Mr. J.Y Campos and Mr. M.K. Tan in 1945, UNILAB now develops, manufactures, and
market leading brands in the Philippines, Indonesia, Thailand, Malaysia, Singapore,
Hong Kong, Vietnam and Myanmar. Though Unilab has facilities throughout
Southeast ASIA, the company’s major manufacturing complex remains in Manila. As
the largest multinational competitors combined. UNILAB is governed by Campos
eldest daughter Jocelyn Joy Campos Hess and Wharton educated eldest grandson
Clinton Campos Hess as Vice Chairman.
5 Can you relate a story about a family business you know that explains the Three-Circles
Model in some detail?
My present company, MAGSAYSAY maritime corporation for 70 years, was managed
by the founder Mr. Robert C.F Ho, along with his sons and daughters from their
affiliated other companies. After his passing, Mrs. Doris Ho took over the business,
along with her other siblings from their various other related companies in Hongkong
and Canada. With their respective shares to the company and as owners, they are a
concern with performance and dividends. They are also family with members who
are a concern with reputation, profits, and family unity. As their company grows, we
management employees are concerned with its status, career opportunities,
bonuses, and performance measures for career growth and advancement.

6 Think of a family company that you know. Which advantages and which disadvantages
does that family business have?
A Family Owned Shipping Company in Norway which is my principal WESTFAL-
LARSEN Management AS (www.wlco.no) they are in a business of shipping since
1905. Currently owning 32 vessels of Dry Cargo/Bulk and Tanker managing ship
management and charterers as well. Sighting my perceptions of their advantages
and disadvantages as below:
ADVANTAGES
- Long term orientation
- Greater independence of action
- Family culture as a source of pride
- Greater resilience in hard times
- Willing to plough back profits
- Greater Flexibility
- Quicker decision making
- Knowing the business
- Early training for FAMILY members
DISADVANTAGES
- Spoiled kid syndrome
- Paternalistic/Autocratic rule
- Greater difficulties in attracting professional management
7 What pressures do entrepreneurs sometimes face from inside the family? What pressures
do entrepreneurs sometimes face from outside the family?

Pressures inside the family are, family members may want to keep the business in
existence so that they and their families will be able to manage it. This results the
members in wanting to get, or increase and control over the operations. Another is
pressure on the owner-manager to designate an heir. Sometimes, pressure on rivalry
among the various branches of the family. And an effort to protect their personal
interests.
 Pressures outside the family are, even when family members do not play an active
role in the business, quite often these individuals are interested only in ensuring that
they inherit part of the operation and they will put pressure in order to get involved in
the business. Further, some family members will pressure the owner-manager to hire
them. Another major source of pressure comes from external environmental factors.
One of these is competitors who continually change strategy and force the owner
manager to adjust the new market considerations. Other includes customers,
technology and new product development.
8 What are three of the contextual aspects that must be considered in an effective
succession plan?
-Understanding the contextual aspects
-Identifying successor qualities
-Understanding influencing forces and carrying out the succession plan.
9 What are four steps that should be taken in carrying out a succession plan?
-Time
-Type of venture
-Capabilities of managers
-The entrepreneurs’ vision and environmental factors

10 What do we mean by ‘liquidity event’? How can one best maximize it?
Liquidity event is the way which an investor plans to close out an investment. Also
known as “exit strategy”. To maximize the value of the investment is most often
achieved through an initial public offering or complete sale of the venture. Trade
sale is another option.

11 What eight steps should be followed to harvest a business? Discuss each of these steps.

Step 1: Prepare a financial analysis –the purpose of the financial analysis is to define the
priorities and forecast the next few years of the business.
Step 2:Segregate assets – this step is for reducing taxes in the business
Step 3: Value the business – estimating the worth of the business is the most important
step is its sale.
Step 4: Identify the appropriate timing –knowing when to offer the business for sale.
Step 5:Publicise the offer to sell–advertising publicly the offer to sell the business.
Step 6:Finalise the prospective buyers – shortlisting prospective buyers.
Step 7:Remain involved through the closing – meeting with the final potential buyers
enables to negotiate the requirements more effectively.
Step 8:Communicate after the sale – communication between the seller and the buyer
and between the buyer and the current management is the key step.