Entrepreneur is such a person having an idea for a new business venture, with high risk of profitability yet creates value for the customer. They are the risk taker who brings innovation and creativity in the way they do business. It may be doing a business with new creative goods and services or with the same product but in a different way. They make use of opportunities that may be seen or hidden to bring about changes and create more value. Directed by the vision they have, they are more concern in creating value, having satisfaction or success rather than gaining more profit. Usually, entrepreneurs initiate a risky new venture, plan for the venture, carry out and take the responsibility of the outcome.
Entrepreneurship involves intentional creation of value through organization by an individual or group of partners through change, revolution, transformation and introduction of new approaches. Entrepreneurship uplifts the way of doing business moreover we can say uplifts the economy as a whole. Fundamentally we can understand entrepreneurship by three behavioural prospects:
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Identifying, evaluating and optimal utilization of an opportunityÂ
Facilitating development of product in new way using creativity
Vision of gaining success through value creation.
There are two thought of school that seconds the debate on 'entrepreneurs are born or made?' More that inherent quality research and studies prove that pull influences of an individual make an entrepreneur. The pull influence include the desire for independence of an individual, more often new idea is a result of hobbies or work experience and in a business firm when financial incentive are given new projects are identified. There are factors that influence an individual to embark as an entrepreneur, such as personal attributes and environment. Personal attributes includes dream, determination, dedication, need for independence and achievement and recognition of self- efficacy. Maybe other external factors can influence an individual to be an entrepreneur such as work place, case of urgency or work problem etc.
An entrepreneurial venture is the brainchild of an entrepreneur. In some respect, every such venture becomes a family business, started by one of the member of family. One of the family members or sometimes two or more set an idea, plans it, work on it and turns his idea into a business for the family. A family business is successful as an entrepreneurial venture only when there is good management, control and resource management. Family business successes when family values and vision are deeply rooted in every family member. This report portrays the challenges faced by family business while growing an entrepreneurial venture. This report is based on the case study of Colony Beach and Tennis Resort where there demonstrates a complex interrelationship between two generation; father and his daughter. It also reveals the complexity of management succession in the family business.
Surveillance to the Case Study
Change is inevitable. Challenges strike the company when changes occur. When a family business company pass by a different phase of growth and development, there arise a change, shift in one generation to other.
Family business succession is the process of transitioning the management and the ownership of the business to the next generation of family members. The transition may also include family assets as part of the process. Family members typically play a controlling role in both the management succession as well as the ownership succession. As such, the effective integration and management of the family component will have a determining effect on the success of the succession process'
-Grant Walsh, Family Business Succession
Murray Klauber, the founder of Colony Beach and Tennis resort tries to actively involved in day- to-day activity and operation of the company even though he retire many years ago. Katie Moulton, the daughter is facing a problem in the business because of lack of independence. She has not been given enough freedom to run the business in her way, every decision and thought made is distracted by the founder.
With change in technology and increasing competition, business environment is changing rapidly challenging the "new" entrepreneurs. When retire founder still actively involves and run the family business, the problem for second generation entrepreneur becomes more complex.Â There are various differences between the founder and second generation because of the following reasons:
Personality profile of entrepreneur.
Always on Time
Marked to Standard
An entrepreneur has a proactive approach towards oppurtunities and is self motivated. They are energetic and impatient with high level of strength to tolerate uncertainty. They do things differently to create a new product or service. They are visionary and they thrive to succeed. They are opportunity seekers and can manipulative any unseen opportunity. Whereas second generation may not be equally proactive, perhaps most second generation who carry on the family business uses reactive approach. They are not risk takers like the entrepreneurs and needs motivation to boost up. They too require independence like the entrepreneurs.
Profession versus personal
Family problems will affect the business. Managing emotion in work or profession is very important which lacks behind in most of the family business. Any emotion problem leading to separations, problems arising due health and finance also create difficult situations among the members to communicate. Entrepreneur has the clear vision of what the family business wants to be in coming 20 years but the second generation may not know. Implicit data create a confusion of informality in the business. Any good performance of an employee has a good compensation and reward but it may not be same for the family members. There will be confusion of role due to regular interference.
Challenges in Colony Beach and Tennis Resort
There is a lack of process of transition along with mixed emotions of management and ownership. The founder of the family business are so much connected to their business that they resist to move back even after retirement. Mr. Klauber is unwillingness to let go of power and management overall to his daughter. The first challenge is related to personality profile of entrepreneur and second generation and second challenge is related to profession versus personal aspects.
Many entrepreneur dreams that their venture would be carried out by their children in future, but their dream remain unfulfilled for several entrepreneurs. A founder and his children may have interest in different fields, because of a feeling of compulsiveness children tend to carry on the family business just in name of carrying it. The second generation, Mrs. Moulton has her own way of doing business which may not be same as the way entrepreneur, her father manages his business. Lack of ability to work in same manner creates a low will to successfully manage the business.
It is very complex to share the information in the family business. In this case, Mrs. Moulton does not like the maintenance director whereas her father has exactly opposite opinion about the maintenance director. Sometimes the matter is very hard to share which might be family personal matter and as well as business matter. So it cannot be shared as family matter or the business matter.
Recommendation to Beach Colony and Tennis Resort
The company must plan for succession for long term survival. An entrepreneur can plan for management entrepreneurship venture in the following way:
Family council and constitution
Family council is a way to resolve and prevent the conflict. It ensures coping with crisis, stress, commitment and communication.
Family business constitution is a formal document that captures and codifies the principles and practices of the family business. It helps to decrease emotion-based conflict and source of problems
The entrepreneur should focus on business, not family needs. Although a family business entrepreneur may feel an obligation to take care of all family problems, the business should not be used as a family employment agency. The business problems should be dealt in the business where as the personal problems should be dealt personally outside the business house. In this case study, Mr. Klauber and his daughter were having breakfast where he says that the maintenance director is doing good job. He should not share his feeling about the staff outdoor. The other fact is that Mrs. Moulton does not like the director.
In the family business, the succession plan can be complicated because of the emotions and relationships. It is essential to have a good management succession plan. Succession plan comprise of three main issues which are: family, ownership and management. It is important to know that management and ownership are not the same or one but they are the two sides of the same coin. The transfer of the business to the family member or non-family member, exit from management or ownership and day-to-day management of family involvement must be planned ahead. In this case study, although Mr. Klauber retires from presidency and day-to-day operation responsibilities he lives in a suite near the resort's lobby which makes him easier for patrolling. He interfere not only his daughter but also other staff. He also makes decisions for staff member and tells them what to do. As Mr. Klauber has retired and involved in day-to-day operation, he should not involve and distract his daughter and other staff member. If he had no trust and faith in his daughter, he should have made a plan to transfer the management to other family member or non-family member.
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This case study gives us the understanding and description about the importance of a family business so that it can be managed in a professional way and will grow up continuously in the future. Next generation has a lot different life style than the business founder and entrepreneur. They do not share the same drive and commitment that dad needed to build the business from scratch. In this case study, Mrs. Moulton has her own style of doing the job and she is scared to lose the staff member because of her father's interference. Family businesses face two major challenges: the complex interrelationships that arise and management succession. Entrepreneurs can successfully manage their personal lives by becoming good time managers, seeking professional advice in the business areas in which they may need it, dealing with conflicts as they arise, developing a network of trusted friends and peers, and recognizing when stress levels are too high.