Academic journal article Journal of Accountancy

The Seven Deadly Sins of Family Businesses

Academic journal article Journal of Accountancy

The Seven Deadly Sins of Family Businesses

Article excerpt

The greatest challenges to the nation's 12 million family-owned enterprises are not purely business-related issues. Instead, as research shows, certain behaviors and attitudes can undermine these companies' viability. Ensure your clients' success by helping them identify and not fall victim to these "seven deadly sins."

* It's the same old song. Carrying over inappropriate behaviors, roles and beliefs from the family to the business--for example, allowing family members to have their way without justification, paying them excessive salaries and expecting junior relatives to assume minor roles in the family business.

* We're one big, happy family. Not understanding that the traits of a happy family, such as filial deference, often run counter to those of a profitable business, which must be managed in a strictly professional manner.

* They may be executives, but they'll always be my children. Refusing advice from, or summarily overturning the decisions of, adult children because of an inability to take them seriously.

* If you insist on being yourself, you're not being loyal to the family. …

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