family business in south america
TRANSCRIPT
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FAMILY BUSINESS IN SOUTH AMERICA: A GENERATIONAL COMPARISON
MATTHEW SONFIELD, HOFSTRA UNIVERSITY
ROBERT LUSSIER, SPRINGFIELD COLLEGE
PRESENTED BY
ENG. ISLAM ELZAYAT ,MBA,MCT
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AGENDA• Introduction
•Research Questions
•Hypothesis
•Methods
•Statistical Analysis
•Result and Decision
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INTRODUCTION • This investigation compared first-, second- and third-
generation family businesses in a sample of 210 family
businesses in Argentina and Peru
• Family firms constitute a highly important component of most
countries’ economies
• In the USA, an estimated 80 % of the total 15 million businesses
are family businesses
• Drawing on data from 210 family firms in Argentina and Peru,
this paper reports on an analysis of generational issues
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RESEARCH QUESTIONS
Family firms move
beyond the generations ,
Does any changes occur ?
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RESEARCH QUESTIONS
Is there are a significant
differences between the
Three generations ?
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ARGENTINA • Family business plays a big role on Argentina business
outcome
• Argentina´s family businesses are of great socio-
economic importance because almost 75 % of total
businesses (1,200,000) are family firms
• Approximately 50 % of GNP and 70 % of employment is
contributed to family business, and they control 95 % of
total trade
• Also, 85 % of family businesses are founded by 26 to 28
year old
• 76 % belong to two or more owners
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PERU• Peru is a nation with a population size of nearly 29.1
million people
•GDP nearing $ 159 billion in 2010
• the Peruvian economy remained strong throughout the
2008-2009 global economic crisis due to proactive
macroeconomic measures
• 1990’s, the Peruvian government began to actively
encourage SME development through government
sponsored small enterprise development programs and
economic reforms
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HYPOTHESIS 1Subsequent-Generation Family Firms are
more likely than First-Generation Family
Firms to include non-family members
within top management
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HYPOTHESIS 2Subsequent-Generation Family Firms are
more likely than First-Generation Family
Firms to have women family members
working in the firm
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HYPOTHESIS 3Subsequent-Generation Family Firms are
more likely than First-Generation Family
Firms to use a “team-management” style
of management
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HYPOTHESIS 4Subsequent-Generation Family Firms are
more likely than First-Generation Family
Firms to have conflict and disagreement
between family members
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HYPOTHESIS 5Subsequent-Generation Family Firms are
more likely than First-Generation Family
Firms to have formulated specific
succession plans
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HYPOTHESIS 6Subsequent-Generation Family Firms are
more likely than First-Generation Family
Firms to use outside consultants,
advisors and professional services
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HYPOTHESIS 7Subsequent-Generation Family Firms
spend more time engaging in strategic
management activities than First-
Generation Family Firms
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HYPOTHESIS 8Subsequent-Generation Family Firms are
more likely than First-Generation Family
Firms to use sophisticated methods of
financial management
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HYPOTHESIS 9Top management styles and decisions in
Subsequent-Generation Family Firms are
neither more nor less likely than in First-
Generation Family Firms to be influenced
by the original business objectives and
methods of the founder
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HYPOTHESIS 10Subsequent-Generation Family Firms are
more likely than First-Generation Family
Firms to have considered “going public.”
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HYPOTHESIS 11Subsequent-Generation Family Firms are
neither more nor less likely than First-
Generation Family Firms to use equity
financing rather than debt financing.
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METHODS•The objective of this study was to combine
the data to provide a comprehensive and
large sample of family firms
•The research design was survey research
using both mail and personal interviews
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STATISTICAL ANALYSIS•Hypotheses 1-11 compared the dependent
variable among the three generation groups
using a one-way ANOVA test.
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RESULTS AND DISCUSSION
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RESULTS AND DISCUSSION
The use of outside consultants, advisors
and professional services increased
through the three generational levels, but
only statistically significantly from the
second-generation to the third-generation
level.
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RESULTS AND DISCUSSION
The influence of the original business
objectives and methods of the founder
decreased through the three generational
levels, but only statistically significantly
from the second-generation to the third-
generation level.
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RESULTS AND DISCUSSION
The likelihood of top management
considering going public increased from
the second-generation level to the third-
generation level (but not form first-
generation level to second-generation-
level).
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CONCLUSION
•In summary, this investigation compared
first-, second- and third-generation
family businesses in a sample of 210
South American companies
•Both supporting the authors’ various prior
country studies and yet challenging the
earlier more conceptual literature
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