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A First-generation Family Firms (igffs), Is Defined As A Family-owned And ...

A first-generation family firms (IGFFs), is defined as a family-owned and managed firm, with more than one family member involved, a second-generation family firms (2GFFs) and a third-generation family firms (3GFFs) are defined as firms in which the second or third generations of the family are also involved in the ownership and the management of the company (Sonfield, M & Lussier, R 2004).

Within 2GFF or 3GFF, the original founders and other members of earlier generations may be retired or deceased; therefore not all generations need be currently working in the business. Dyer (1988) established that 80% of IGFFs had a paternalistic management culture and style, but in succeeding generations more than two-thirds of these firms adapted a professional style of management Paternalistic management was characterized by hierarchical relationships, top management control of power and authority, close supervision, and distrust of outsiders. While the professional management style involved the inclusion, of non-family managers in the business (Dyer (1988) cited in Sonfield, M & Lussier, R 2004:191).
3.10 Relationship Issues

The attitude of the family is important, and this will affect the management succession. If a family member assuming the leadership role does not have the support of the family, then it is not likely to happen. This factor goes further than succession, personal relations among relatives often take priority over maximum profit in family firms (Brockhaus, R 2004) Churchill and Hatten (1987) developed a life-cycle approach to illustrate the succession process between father and son in a family firm. They identified four stages (1) a stage of owner management, where the owner is the only member of the family directly involved in the business; (2) a training and development stage, where the offspring learns the business; (3) a partnership stage between father and son; and (4) a power transfer stage, where responsibilities shift to the successor (Churchill, N & Hatten K 1987).

The unwillingness of the senior member to let go of the business could be underpinned by doubt in the successor's ability, willingness, and desire to take control. Lansberg (1988) discussed the degree of willingness of a senior member to leave the family business to a successor, is eroded by feelings of rivalry and jealousy toward the potential successor. This then becomes evident in a constant distrust of the latter's competence and ability. Credibility of the successor is decisive to successful integration into the business, without credibility, the successor cannot attain legitimacy. There is considerable evidence that in successful transitions heirs are generally reasonably well prepared (Venter, E, et al 2005).
Lansberg (1988) discussed the founder fear of losing control, they are anxious that retiring from the firm will mean a demotion within the family.

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