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Family Capital is a true differentiator between family-owned businesses and companies with a fragmented shareholder base. Family Capital expresses itself as the organization's culture, ethos, and network. While hard measures liking it to performance are elusive, Family capital clearly conveys powerful advantages.
A global Organizational Health Index database indicates that family-owned businesses enjoy a significant advantage in providing career opportunities to employees. This is a gap that grows even wider among Family Businesses in the top quartile of healthy companies. However, even the benefits of a positive family-oriented network can go awry in the mix of personal and professional tensions that may affect Family Businesses.
This framework discusses the 4 core components of Family Capital. While it is the 4 factors that a family organization has by virtue of its ownership, it is also the 4 factors that builds the family organization's Competitive Advantage.
2. Family Identity
Family Capital is the strongest intangible asset of Family Businesses. Having a good understanding of the 4 components of Family Capital allows Family Businesses build a strong Corporate Culture.