Unity of the family
The members of the family were very supportive and encouraged other family members to join the family business after the completion of their studies. The children of Maryam and Zainab were encouraged to join the family business and Maryam trained their children and nephew to precisely handle the business matters. The children also responded in a positive way and through their knowledge and expertise; they effectively took the charge of all business operations.
Organization’s culture
The culture of the group was very informal and flexible, it benefited the whole organization to accept the change readily and move towards growth. Further, the new generations were encouraged to join the family business so that they contributed their skills towards the growth of the whole organization.
Diversified Portfolio
The group has a diversified portfolio and the family members are assigned the individual Strategic Business Units (SBUs) to manage the different operations of the business. It will benefit the whole organization because the decision taken by the family members will be in the long-term benefit of the whole organization.
Weaknesses
Jealous factor
There was usually a jealous factor among the siblings and cousins to own greater responsibility and greater power to influence the situations. As long as, Ahmed had been offered the position of group’s General Manager, he observed the changing nature of Majid and Fatima, who strongly believed that the post belonged to them and Ahmed had snatched it from them.
Conflict between family members
Every family member has its own working style and working preference which may raise conflicts of thought; in addition family members may support their own children, although they know that they are wrong. Such as, the management of Bilal caused the company to lose substantial revenue and operating profit but his father, Ali stood with him, which resulted in the dissolution of partnership between the two brothers.
Emotions
It is the most important factor to consider because the business should be totally separated from personal matters. If the family members involve family matters into the business, it can substantially threaten the operations of the company and cause the company to suffer increased operational losses.
Business judgment
The business decisions were influenced by the members of family and there were many situations where the decision makers tend to accept the potential proposal by the family members, still knowing the fact that it could substantially threaten the performance of the group.
Three Cycle Model
The family business consists of three distinct factors: ownership, family and business. Each of the factors has its own needs, wants and desires which must be satisfied. If the circle overlaps; it creates a conflict which needs to be addressed.
The first part of the model represents external investors, who possess the ownership in the company but are not involved in the business and are also not the family members whereas the second part of the model represents the employees, who are neither the family members, nor the owners of the business. The third part of the model represents the owners who work in the business but are not the family members. The fourth part of the circle represents the family members who own the share in the business but are not the employees of the company. The fifth part of the circle represents the family members who neither own the share in business nor involve in the company’s operation.
The second last portion of the model represents the family members who are involved in the business but do not possess any share in the business, so Fatima, Khalid, Majid and Jawad fall in this category and the last portion of the circle represents the family members who possess the share in the business and who are also involved in the operations of the business as well, so from this view, Zayed, Maryam, Zainab and Hamdan fall in this category.
Factors affecting situation:
Family Factors
Zayed discussed all the problems concerned with the unrelated expansion and mismanagement of the financial resources with their family members and had also warned its long term impact on operating profits but the family members showed reservations towards this which led Zayed to withdraw his powers and only act as an observing chairman. Further, Maryam was also dealing with these complex issues and in order to maintain the unity of the company, she said ‘yes’ to situations, though she knew the fact that the potential action could threaten the long term performance of the company..................................
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