Family Business代写 Management and leadership knowledge is fundamental to business success.Every business is faced with challenges.
Management and leadership knowledge is fundamental to business success. Kesar group is a family business that started in 1966. Susilo is the oldest of the first generation, and he is about to retire and give success to the second generation. However, he doubts about the succession of Kesar group. According to his evaluation, he has not a well-prepared candidate to take over him after he retires. This paper analyzes the challenges the company is facing, give alternative solutions, solutions, and execution plan. Family Business代写**范文
The first part gives a general introduction to the topic of leadership and management as well as the overview of Kesay group. The second part explores the challenges the company is facing before proposing the alternative to these challenges. The fourth part is the solution to the company challenges. The paper ends with the execution part where the outline what the company needs to solve identified problems.
Sekar Group: Family Business Family Business代写
Every business is faced with challenges. However, family businesses are faced with unique threats like familial influences and politics (De Massis and Kotlar, 2014, p. 16). If risks are not addressed they affect the success of the business in the market. Sekar Group is one case that can be used to explain what the family business is, challenges, and solutions to the problem. Harry Susilo founded saker Group in 1966 as Harry Susilo Private Ltd (Zhao and Lee, 2018, p. 1). The company is based in Indonesia and was listed on the Jakarta Stock Exchange. Family Business代写**范文
The company operates under various subsidiary companies that deals with a wide range of business domains, including food, agriculture, real estate, and mineral products. Susilo was the remaining first generation to manage the company, and he was about to retire and give the mantle to the second generation for management. Since 2012, Susilo has been preparing the siblings for the takeover the control with four of them taking daily operations.
Also, he had recognized the need to build on the management skills of the third generation, where 12 of them were tasked with management. Although Sekar Group has been thriving under the leadership of Susilo, he doubts whether any of the successors will uphold the legacy and sustained success of the company.
Challenges Identified Family Business代写
Like any other business Sekar Group, Susilo has a problem of establishing qualified and experienced successors.
The company was established under the “power of love” where the emphasis is on integrity and responsibility to the people and society (Zhao and Lee, 2018, p. 1). Although Sekar Group is thriving, the success may not be sustained if there are no specific successors to take over the and continue with Susilo legacy in management (Gilding, Gregory, and Cosson, 2015, p. 300). The family has over 40 family members who all share to the well-being of the Sekar Group. Although it is apparent that the sibling to take over after Susilo must come from the second generation, it is not clear who is experienced and qualified enough. Family Business代写**范文
The difficulty in choosing the next head of the Sekar group may be the route to the company downfall. Besides, there might be divisions amongst the successors of the family business. This might be the case because many possible successors might be interested in leading the company. The problem arises when siblings could not agree on who is best suited to take over or the predecessor could not establish an appropriate method of selecting the next manager.
Susilo is challenged with the family feuds. Family Business代写
According to Cheng (2014, p. 150), it is no fun and games when it comes to family feuds regarding family business since they result in their failure. Sekar is faced with internal conflicts that arise from the inability of Susilo to separate the company with the family lives (Zhao and Lee, 2018, p. 5). For instance, Chai brags of using her philosophy, which is overly subjective. Lack of distinction has led to each family member having varied interests with the company, personal egos, and personal rivalries that spill into the business environment. Family Business代写**范文
It is evident from Susilo’s fears on succession that he was unable to feuding. Thus, it is most likely that although the company is succeeding, some goals might not be efficiently achieved. Consequently, family conflicts might result in high employee turn-over and hostility at the workplace.
Additionally, Susilo has failed to separate Sekar group from family affairs and hence seem to practice nepotism. Family Business代写
It is clear that he is faced with the delicate issue of balancing family and business management. Regarding this, it is essential he could have noted that the easiest way to alienate people at work is the practice of nepotism (Liu, Eubanks, and Chater, 2015, p. 421). His daughter, Finna Huang, is the president of the board of commissioners of PT Sekar Bumi while her husband manages Finna Golf & Country Club (Zhao and Lee, 2018, p. 5).
Though they might be qualified, it demotivates non-family employees who will lose motivation and desire to work in Sekar Group. Also, family members tend to become complacent because they feel that they may not be held accountable and responsible for none performance. Nepotism does not empower employees but rather make them left out of the company goals.
Beside family challenges, Susilo feared that as the oldest first generation leader in the family and business. Family Business代写
There might not be another leader share with him the core values and aspirations of the company. According to Boyd, Royer, and Zhang (2015, p. 18), it is essential for that the first generation pass on the knowledge about the family business competitive advantage. Before the transition from generation to the other, the successors should share the same aspirations, cultures, and goals of the business. Family Business代写**范文
The doubts in his best candidate come even after grooming some leaders like her daughter Finna Huang who has rich experience in management, consulting, and starting and managing new ventures. Susilo was not confident that she could balance the interest of the company and that of the family like he has been doing. As such, he feared the change in management culture ethics that the company has held for many years and passed to the next generation.
Moreover, Susilo was insisting on his core values, which included social responsibility, product quality, integrity, and innovation to be followed as the company culture.
He used a transactional leadership style where he micromanaged employees and high siblings and expected them to perform by his core values (Nanjundeswaraswamy and Swamy, 2014, p. 57). The company was supposed to have core values vested on the company goals and mission rather than personal values which might not go well with all stakeholder. It is true regardless of Susilo being the eldest from the first generation that Sekar should not be run on emotions. Like any family business, Sekar Group has the challenge of failing to separate personal desires and aspirations with the business entity as stipulated by Ramadani and Hoy in their study (Ramadani and Hoy, 2015, p. 10). Family Business代写**范文
Miller, Wright, Breton-Miller, and Scholes (2015, p. 25) found that alienating personal feeling from the business is a difficult task for most family business managers. Susilo forces his values down the family members’ throats, which might have a far-reaching impact. To family members, he might be a model, but to other stakeholders, Susilo may appear weak for allowing emotions to interfere with business. Also, to non-family employees, he may appear cold and unapproachable. It is therefore vital to have the right balance and separation between the personal emotions and business environment.
Furthermore, Sekar Group lacks an appropriate succession plan. Family Business代写
A succession plan is a process of identifying developing new leaders to take over outgoing leaders (Wahjono, Idrus, and Nirbito, 2014, p. 649). Susilo was aware that one day he would retire or perhaps pass on him being the eldest first generation in Sekar group management and leadership. He ought to have had a definite exiting plan and proper succession. It is estimated that during the transfer of management of family-owned businesses, few businesses succeed from the first generation to second generation ownership (Daspit, Holt, Chrisman, and Long, 2016, p. 50). The failures in transition in management are caused by lack of a proper plan. For a successful family business, a succession plan was necessary to ensure the business lives on from to the next generations.
Alternatives Family Business代写
The various challenges the Susilo family and Sekar Group are facing can be addressed by having alternative solutions.
One of the alternatives is having a succession plan (Chalus‐Sauvannet, Deschamps, and Cisneros, 2016, p. 715). A good plan is one that anticipates the future need of a leader or manager to take over the business. Susilo is old and has no strategic plan on who to take over the family business. Even though his daughter was capable, he doubted his expertise in balancing the stakeholders’ interests. He was supposed to have a list of candidate to succeed him in case he retires or passes on rather than pondering it too late. Family Business代写**范文
According to Susilo, he wanted a leader and manager who could continue with his legacy on building a company that has ethical leadership and corporate social responsibility. Such a leader is modeled early to ensure preparedness, expertise, and knowledge in management and leadership. Instead, Susilo should not look for a person who can uphold family values but rather a transformational leader who can instill inspiration and motivation in employees for the achievement of business goals.
Therefore, Susilo should be determined to get an ethical leader who can separate personal interest from that of business (Shin, Sung, Choi, and Kim, 2015, p. 46). Family Business代写
Each family employees should be trained to alienate family issues with business. They should be made aware of the detriment of using emotions personal issues to make decisions in business. It takes an ethical leader to manage business affairs objectively (Frisch and Huppenbauer, 2014, p. 24). A moral leader shows respect to employees by supporting them to achieve their goals and needs. Being an ethical leader means that one is honest, considerate, and fair to everyone in the company. Family Business代写**范文
In essence, ethical leadership exhibit morals and values in management. The primary responsibilities and obligations of an ethical leader include role model, setting standards, and upholding them and communicating expectations. Although the ethical leader may not be easy to get, Susilo had an opportunity to train and motivate on from the second generation.
Most importantly, Sekar Group should avoid selecting a large number of family members on top management. Family Business代写
It is clear from the management structure that most of the top managers are a family member. Thus, it is a sign of nepotism which demotivates non-family employees. Non-family employees may not be heard because familial politics dominate and hence inhibit informal and discretionary communications by employees to give ideas, suggestions, concerns, and share information (Morrison, 2014, p. 174). At times the communication between family employee and non-family employee may not be effective. Instead, Susilo should source most top management employees from non-family members. Reason being, external employees are accountable to their actions and decisions.
The company should have strategies to manage change. Family Business代写
It can be achieved by balancing between family controlled management and non-family employees. Change management depends on the company culture, which should reflect societal values and ethics as well as inclusive of outsiders. Change management is one of the critical aspects of managing the transition from one generation to the other. If the company is composed of multiple family members in various roles within the organization, an outsider can automatically feel familial and political influence at play (Vandekerkhof, Steijvers, Hendriks, and Voordeckers, 2015, p. 105). Family Business代写**范文
Hence, change management should be approached from the perspective of family members and non-family employees. A family member tasked with management is likely to influence family behavior in line with family values and objectives. A family company will be restrained by the internal organizational culture and familial controls. A study shows that most family members are resistant to change due to vested interests. If large family members are involved in decision making may be detrimental to the company.
Furthermore, Susilo should train all family employees on the values that Sekar Group follows. Family Business代写
This will make it easier for him to choose the best-suited person for the management position. The company is built on the slogan “power for all,” which put more importance on integrity and responsibility. The company values giving back to the society. It does so through programs such as aquaculture, agricultural support, and participation in social activities in local communities. The fear Susilo have is a family leader who may not recognize these core values. Each member of the family working for the company should be well-oriented company values as well as family values.
Sekar group follows a traditional management structure which is not dynamic but conservative.
The traditional structure has a leader who oversees the multiple layers of subordinates. The communication flow is complex and not efficient as it flows in a bureaucratic structure that is formal and less flexible and hence hinder creativity and innovation. The leaders make decisions without appropriate consultation and participation of subordinates. Due to these challenges with the traditional structure used by Sekar Group, a more flexible structure like functional, divisional, or matrix should be used.
Solutions Family Business代写
The company management should focus on training family members on the company values and culture.
Sekar group culture is determined family values. Family employees need to be well-acquainted with company culture code, mission, and core values. The training will ensure that family employees align well with company goals and aspirations. According to the case, all employees must be accountable, honest, and contribute positively to society. Sekar Group aims to contribute to society through its Social Responsibility programs. These programs will not only help achieve the goals of the company but also become a competitive advantage.
Susilo needs to have a succession plan for the company as a strategic plan. Family Business代写
As the senior most leaders in Sekar group, he was retiring and needed replacement. The poorly designed succession plan may fail at or after the transition. The fears with Susilo that there might be no one to replace him after he retires tells that he was not prepared for another person to take over. A good succession plan involves all the family members so that to cut any family discord in the future and for every member to know their role and position in the company. Family Business代写**范文
It also helps the family member to reach a consensus on the best person to take over the management. After identifying the suitable successors, management trains him or her for the tasks ahead. The training involves management styles used in the company, culture, leadership ethics, and organizational structure. However, sometime family members may not agree on the succession plan or may want to make the agreement official to avoid future disputes in the company and family.
At such instance, the family needs to ask for third party help like an accountant, layers, or consultants. A succession plan should be taken as one of the strategic plans by the management to ensure a smooth transition from one manager to the other and hence, the future success of the company.
Additionally, the management should avoid employing a large number of family members to motivate non-family employees. Family Business代写
Family politics are one of the detriments of good relations between non-family and family employees. As a result, employees’ communications are undermined. In this context, when the daughter of Susilo is the head of the board of commissioners of PT Sekar Bumi. It might be that all the commissioners might be cowed by a decision made by Fanni since she is the daughter of the owner and hence make them voiceless or powerless.
If the president of the commissioners is from non-family, the commissioners will have the freedom to express themselves without being tied to the opinion of the president. However, it does not mean Fanni is not a good leader since she has required experience and expertise. The family employee can learn through training on ethical leadership, leadership principles, company culture, and core values and become the best leader like Susilo.
The company should change its organizational structure from traditional to a matrix structure. Family Business代写
The traditional structure is bureaucratic and inflexible. The communication is vertical, and orders come from the top management without the participation of the subordinates. A contemporary management structure is required to lower bureaucracy and rigidity in decision making. The most appropriate management structure for Sekar Group is a matrix structure. The structure allows dual managerial roles and responsibilities as well as reporting by employees (Schnetler, Steyn, and van Staden, 2015, p. 14).
Matrix structure has functional line managers and another project manager to whom each employee can report and make communications. The use of matrix structure will reduce the powers of some family members in leadership to give room for the application of system management theories.
Execution Family Business代写
Sekar Group is required to execute the above solutions to achieve an efficient transition from the first generation to the second generation. Below are the steps to execute the proposed solutions.
By the end of July 2019, Sekar Group should formulate a succession plan. He should consult and involve the family members in making decisions on who should take over as successor after his retirement. The company should make the plan official on the procedures, rules, and regulations for selecting a successor. Third parties such as layer and accountants can be involved.
Immediately after the formulation of the plan, Susilo should start training the candidate for succession. The training should cover the company policies, values, culture, and management. The training should continue for the period as long as Susilo is still in office. Over time, the candidate will have gained management expertise and experience needed to take over the management of Sekar group. Most importantly, Susilo will be able to instill values and cultures that he intends to perpetuate in the company. Family Business代写**范文
Before Susoli retirement, the management structure should be changed to a more dynamic and flexible structure. The company should seek to execute a matrix organizational structure. The program should be timed as from July 2019 to make sure the identified candidate for succession become well-acquainted with the new organizational structure.
As from January 2010, the company should adopt human resource new recruitment policies where it will seek to reduce the domination of family member in crucial positions in the company.
References Family Business代写
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Schnetler, R., Steyn, H., and van Staden, P.J., 2015. Characteristics of matrix structures and their effects on project success. South African Journal of Industrial Engineering, 26(1), pp.11-26.
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