Transcript MSc International Management, Second Semester

Insead
Fontainebleau
January 30, 2016
Professionalizig Family Firms
A Business Historian’s
Perspective
Business Historians facing
Professionalization
“Professionalization” has been
(implicitly more than
explicitly) hanging around since
the beginning of modern business
history research on family firms
and industrial capitalism in
general.
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GDP P.C. 1850-1913 (1990 $)
30372 - GLOBAL HISTORY
The ultimate reason of decline
Alfred D. Chandler, Scale and Scope, 1990 (292)
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Professionalization as an
“antidote” against stagnation and
relative decline
The US. successful “takeover” as the outcome of
a number of technological and institutional
factors among which a key role plays
“professionalization” intended as the end of
nepotism and the rise of a truly managerial
capitalism.
The uniqueness of America:
•Founders and families: a step back from
management but also from ownership
concentration
•Management as a WASP profession
•Business schools and educational system.
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30372 - GLOBAL HISTORY
Professionalization as an
“antidote” against stagnation and
relative decline
The US. successful “takeover” as the outcome of
a number of technological and institutional
factors among which a key role plays
“professionalization” intended as the end of
nepotism and the rise of a truly managerial
capitalism.
The uniqueness of America:
•Founders and families: a step back from
management but also from ownership
concentration
•Management as a WASP profession
•Business schools and educational system.
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A (too) easy syllogism
The “Chandlerian recipe” (do get rid of
nepotism!) has for a long time been
fascinating business historians – an
depressing scholars interested in
understanding the other specie in the
complex ecosystem of modern capitalism.
E.g. historians of management education and
the debate on Americanization.
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Managerial capitalism as the
exception
During the 1990s it became apparent that the
managerial corporation was more the exception
than the rule.
Much more frequent is the presence of hybrid
forms of enterprise, characterised by the
coexistence of concentrated ownership, personal
capitalism, professional managers, and family
management.
The presence of a bulk of internationalizing,
family-owned SMEs adds further emphasis at the
issue of professionalization
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low Degree of authority delegation high
Public company
Open family
firm
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2
Proprietary
capitalism
Family partnership
With management
1
Personal
capitalism
high
3
Excecutive
dictatorship
Degree of ownership concentration
low
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How is this impacting on
“professionalization”?
A much less deterministic
approach which takes into
account the complexities of
modern family firms.
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“Professionalization” and modern
business history
Key areas of investigation:
a) Degree of separation of ownership and
control
b) Stewardship: owners, managers or
what?
c) The management of succession
d) HH.RR. management in
multigenerational enterprises
e) Training, schools and programs: the
relevance of the context.
f) Professionalization and performance
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