Mastering Family Businesses

Course overview and objectives:
Managing any business can be challenging these days especially with the increasing impact of factors such as technology, social media, and globalization. However, managing a family business can be especially challenging as family considerations add additional levels of complexity to the tasks of management.Often overlooked, in Europe, family firms represent over 80% of all companies and about 75% of employment (Wal-Mart, Fiat, Aldi, Ikea, Michelin, Louis Vuitton, Heineken and Porsche are just a few of some of the largest family firms around the world). It is well known that most of the family business do not make it to the second generation and a very small minority make it to the third. Stereotypes about family firms’ issues such as family scandals, nepotism, and conflicts, often receive the press headlines, but recent studies show that family businesses, on average, outperform and last longer than nonfamily businesses. The family is an important source of competitive advantage for many firms, but it can also cause fatal pitfalls to the business. We will explore the distinctive characteristics of family firms, the family as a source of unique strengths and competitive advantage.

The course is directed towards those students who are currently considering entering their family’s business, as family members who work or do not work within the business; those who know that at some point in their professional lives, might work for a family firm; those who are interested in consulting, may work in or consult to family firms (as non-family employees with or without ownership interests, consultants, investment bankers, or in other roles); those who are interested in entrepreneurship which might originate a family business in the future; and those who are interested in learning about cool, successful stories about some of the largest family firms around the world.

This course provides students with fundamental knowledge and basic tools to build an enlightened understanding of how to work entrepreneurially and professionally, in and with family firms, and manage the unique challenges and dilemmas faced by family businesses effectively.

Course Content:
The course is composed of 12 weeks of 3 hours each to allow for sufficient reflection, teamwork, discussion and guest lectures. Each week corresponds to an overall theme as follows:

1 - Introduction
Rules, deliverables, and course rules presentationTeam dynamics
Warm up activity
Introduction and overview
Family business definition
The first four generations
Circle models of family influence
Why do family firms need governance?
2 - Governance
Ownership stages
Corporate governance
Ownership Governance
Wealth Governance
Family governance
The Family Assembly
Family Councils
Family Constitution 
Exercise: “How Corporate Governance Helps in Decision Making: A case study.”
Guest lecture: Consultant specialized in family firm’s advisory
3 - Strategic management & Internationalization
Socioemotional wealth (SEW) & Competitive advantages
The agency perspective 
Exercise: Case-Study: "How the Ford Family controls Ford Motor Company"
The resource-based view
The organizational identity perspective
Exercise: Case-Study: "Branding and CSR at HiPP"
Family Firms & Internationalization
Governance of Family Firms & Internationalization
4 - Succession
Succession options
Opportunities and challenges of succession options
Sources of complexity in FB succession
Successor willingness and ability
Exercise: Case-Study: "Succession at Gardner Bakers"
Planning the transition of responsibilities
Entry paths for the successor
Exit paths for the incumbent
Retirement styles
5 - Relationships & Conflicts
McCain Family Feud
A fundamental misunderstanding
Types of conflict
Conflict management strategies
Exercise: Case-Study: "Reliance Industries"
Trust and Family Businesses
The Fredo Effect
Exercise: Case-Study: Paul Newman
6 - The Role of Non-Faily Members
A delicate relationship
Why Non-Family Executives want to work for a Family Firm
What good non-family managers can do for your company
Why non-family managers leave
Making NFE a Part of your Team
The Non-Family CEO
Incentives for Key Non-Family Executives
Guest lecture: Working in a Family Business as a Non-Family Member 
7 – Innovation
Innovation in family firms
What research shows
The level of innovation in family firms
Founding generation vs later generations
Exploitation vs Exploration
Ambidexterity
Innovation through tradition
Exercise: Case-Study: “Innovation through tradition: The Case of CUF”
8 - Stewardship
Stewardship
Stewardship Theory
Stewardship Core Compass
What Research Shows
Boss vs. Leader vs. Steward Leader
Exercise: Case-Study: “Boplaas”
9 - Sustainability
Sustainability and the FB's contribution to the UN SDG's goals
Transforming Legacy in Sustainable Development
Exercise: Case-Study: “The Case of Sogrape”
10 – Resilience in FFs
Resilience in Family Firms
Guest lecture: Resilience in a Family Business 
11 – Paradoxes in FFs
What are paradoxes?
Tensions and paradoxes in FB context
How to deal ith tensions
Exercise: The Vista Alegre Case-Study
12 – Workgroup Workgroup Presentations

Grading
The assessment reflects the hands-on approach of the course. It is a combination of the following elements:
Class Presentations 5%: Class presentations of readings and cases for discussion.
Peer Assessment 5%: Since this is a course where workgroup is a very strong component, you will grade and be graded by your team mates every month.
Midterm Exam 25%:The midterm exam is mandatory and will take 1,5 hours. The exam format is largely Multiple-Choice Questions and some short answer format questions. The exam is comprehensive, meaning it will include material from class, including the slides, cases and pre- and in- class activities.
Personal Reflection 5%: Reflection on the guest lectures about the main take aways (max. 2 pages) 
Participation 5%: Participation grade is based on attendance, attitude, and added value. Students are not expected to have all the right answers in a discussion or to adopt a dominant attitude. They are expected to be well prepared, careful, non-judgmental, and constructive. 
Advisory Report 20%: Each group will choose a family business to study (one FB that the group has real access to). Data collection includes interviews with family and non-family members, as well as a small survey. Teams will write a brief advisory report, describing their findings and practical recommendations.
Advisory Report 10%:Discussion of the advisory report (individual). Each team will prepare a presentation (10-15 minutes) as if it were for a client (you can invite the company's representative to be present in the discussion). Prepare it well so that it can be lively and engaging. After the presentation, students will have to answer individual questions asked by the instructor. This will assess the individual knowledge of each student about the whole assignment, not only the presentation. Please keep in mind that the discussion is as important as the presentation.
Final Exam 25%: The final exam is mandatory and will take 1,5 hours. The exam format is an essay where you are asked to reflect on your journey during the second part of the semester.

You are required to have a minimum grade of 9.5 in EACH of the assessment tools to get final approval in the whole course.

Bibliography
Zellweger, T. (2017). Managing the family business: Theory and practice. Edward Elgar Publishing.
Optional reading materials:
In case you want to deeply explore the topic of managing a family business, these are some additional readings that can be useful (NOTE: These materials will not be considered to determine your grade):
• Schuman, A., Stutz, S., & Ward, J. L. (2010). Family business as paradox. New York: Palgrave Macmillan.
• Melin, L., Nordqvist, M., & Sharma, P. (Eds.). (2013). The SAGE handbook of family business. Sage.
• Landes, D. (2008). Dynasties: Fortune and misfortune in the world's great family businesses. Penguin UK.
• Cunha, F. (2017). Como liderar empresas familiares. Leya.
• Jaffe, D. T. (2020). Borrowed from your grandchildren. John Wiley & Sons, Inc.
• Lauder, L. (2020). The Company I Keep: My life in beauty. Harper Collins Publishers