Why Entrepreneurship Is Better Than Family Business
Abstract
Entrepreneurial activities and traditional family businesses have helped the world develop more in the fields of advancement, innovation and some more. The comparison of entrepreneurship and family business is talked about in this paper. Family businesses being single family dominant are bound to be fruitful over the long haul however. The family businesses developed to third generation as the successors need to pursue the techniques for their predecessors while, Entrepreneurship is bound to prevail in the cutting edge world since business people create advancement which helps the general population the general population to get away from the conventional and social limits. Family businesses being family dominant, the relatives impact the organization. Entrepreneurship is all about new ideas, innovations and many more which helps to generate a successful organization in future. With the expanding population and the expanding improvement, new companies and those new businesses can enable organizations to develop. A portion of the central point that choose whether, entrepreneurship or family business are talked about in this paper. The overview led for this paper unmistakably demonstrates that entrepreneurship is superior than family business and it has many reasons which is explained in this research and individuals are following this trend worldwide.
Introduction
A way of life is shaped by means of the norms and traditions that are observed by the population of a society. A way of life followed by means of a protracted ancestral hierarchy makes it the culture of the society. Similarly, own family business is this sort of commercial business that is followed by means of a chain of ancestors and it is meant to live to tell the tale in the contemporary generation and flourished with the aid of the following ones. However, in today’s world, if a business is supposed to bloom, it need to have some innovation, creativity or something that ought to increase the hobby inside the public which is what entrepreneurship does. This paper discusses the two principal business forms; Family Business, Entrepreneurship, how entrepreneurship is better than family business and how it brings new ideas into our minds? How entrepreneurship has taken over the world and progressed the requirements of living with the highest cease technology. Entrepreneurial agencies are the most not unusual entrepreneurial trend and have introduced drastic changes inside the lives of many people. On the other hand, family business entails one or more dominant own family members who manage the complete organizational subculture whereas, entrepreneurial activities involve startups that help youngsters or enterprise amateurs research an increasing number of to broaden their startup right into a huge scale organization.
Basically there are two major concepts which can be further discussed and both of these could be compared. Without entrepreneurs, innovations don’t come to minds which leads to wealth creation and solution to consumer’s needs and wants. Without family business a great deal of wealth and resources would be left to future generations because they will not get proper treatment.
Family business and entrepreneurial activities are both connected to one another. To begin a business, own family’s guide is required, earlier background in family, involvement of family individuals in starting a brand new venture and employment of own family individuals in management and ownership. All of those factors display that each of those business systems are interlinked to each other.
How can family business and the start-ups of the next generation successfully cooperate? We spoke to many entrepreneurs and they told that many next generation founders reported synergies between their start-up and family business, which were fruitful for both the companies and it showed positive effects on everyone involved.
However, these researches show how family organizations and entrepreneurial startups impact each other and correlate with each other whilst this paper discusses the factors that informs the target audience that either family business is higher or the new startups. Moreover, this paper suggests the public surveys performed by researchers which shows the risk one has to take between the formerly described business forms and how most people considers those forms.
Entrepreneurship is however the backbone within the development and development of the society whereas like the entirety on this materialistic world, it also has its boundaries. This paper discusses the factors that restricts human beings from entrepreneurship and to join own family business which includes the big amount of threat that one has to face starting a new business and the probability of failure which forces them to observe the same line of business as that in their ancestors.
All those elements regarding the correlation of circle of relative’s business and entrepreneurship lead to the query; which one is better, entrepreneurship or own family enterprise?
The purpose of the study is to compare the two business forms which are entrepreneurship and family business and conclude that which one is better in every aspect, other than that one of the purpose is also to create awareness among youth and elderly which are still not aware of these business forms. After that conduct a survey and see that how everyone reacts and thinks of these business forms and what they support is the most important thing of all, all of the conclusions made will be in reference to the study which is conducted in Pakistan and also worldwide. Adding more it will help in finding answers to many questions that arise in people’s mind like how these business forms are going to help in boosting the economy how the youth is going to be influenced.
Literature review
The comparison between entrepreneurship and family business is quite difficult because both of these forms are interlinked with one another in such a way that we see a lot of examples around us that show us how entrepreneurship has helped a family business grow and how a family has supported an entrepreneur to become successful. A very large number of researches are found on the internet with related to entrepreneurship and family business. Moreover, about the correlation of both these business forms, and the reason that why they are dependent on each other is because they both promote business culture and one gives rise to new ideas, innovations, creativity and the other one gives rise to carrying the trend which has been carried from decades. However, in both cases business culture is promoted which is a positive sign for the country’s economy and for the people living there.
The article written by using Annika Hall, Leif Melin and Mattias Nordqvist compares these to business forms and discusses entrepreneurship as a radical alternate inside the circle of family business. The authors drew results from in-depth family business case research. The authors have mentioned to what quantity organizational lifestyle has its effect at the entrepreneurial startups. They have also mentioned the volume to which an own family business is managed by a dominant member of the family or a few individuals of the circle of family. They have argued that some cultures want to hold their traditional way of doing business even as a few cultures need to facilitate entrepreneurial alternate. The result they deducted from this research become that managers of corporations need to aid entrepreneurial startups through questioning old cultural styles and bring extra innovation in those businesses
Dyer Jr. and Wendy Handler discuss the involvement of family and how a family influences an entrepreneur’s business. Family business and entrepreneurial dynamics are linked together in and intersect at various points of time. This article explains the factors through which an entrepreneurial setup is affected by the family. The earlier experiences in entrepreneur’s family have an important impact in the life of the entrepreneur. Another important factor discussed is the family’s involvement and support in entrepreneurial startups. Another significant factor discussed in this paper is the employment of family members. And the last factor discussed in this paper is how the involvement of family members to support a new venture leads to the ownership and management succession. And that is where an entrepreneurial setup turns into a family business in which new innovations are replaced by old traditional ways and ancestral hierarchy is followed for succession. (
Although, the two above described research papers explain to what extent, a family’s involvement can influence a business, however, both these papers have not clarified which one of them is better, either family business or entrepreneurial startups. On the other hand, this paper will discuss all the factors that can prove the reader whether entrepreneurial setups are better or the long running family businesses are better.
A research article written by Md. Habibur Rahman, Ramón Sanguino Galván, Ascensión Barroso Martínez, discusses how family businesses contribute to the economy. According to the research, family businesses are the backbone of many national economies around the world. This research was mainly focused on exploring to what extent, family businesses contribute to the economic development of Spain. This paper has used secondary data to meet this objective. The data collected by Martinez and his team has been published by (1994). Martinez and his team collected previous researches and surveys conducted by the other researchers. They were examined to find out to what extent family businesses contribute in the national economy. The findings showed that there is a significant contribution of family-owned businesses in the economic development of Spain. This article also identifies the future research areas that provide researchers with opportunities to push theoretical limitations and offer a further insight into the family business.
All these researchers have collected data on the basis of surveys and other means of collecting evidence. This paper discusses the major difference in which is better; entrepreneurship or family business? The surveys discussed in this paper, show the results of different researchers that have conducted surveys, questionnaires and have done lot of experiments. However, all the researchers mentioned in this paper were unable to deduce, whether family business or entrepreneurship is better, from the surveys and findings. While this paper will discuss which one is better with the help of the surveys conducted and the results deduced from previous researches.
Methodology
This paper is all about the comparison between entrepreneurship and family business, the one with a better future and which one is better? In order to check the reliability of this paper a survey was conducted among the general public including students of universities who had the basic knowledge of entrepreneurship and those who have started fresh in the entrepreneurial activities. The survey involved 20 students who answered the questionnaire containing 10 questions regarding entrepreneurship. 10 of them were unemployed / indulged in studies while 10 were working with entrepreneurial activities. The questionnaires were handed over to them and all were asked to answer the questions honestly and wisely. The questions were related to the comparison between entrepreneurship and family business, government policies and their effect, public’s response to these policies and the priorities. The results received were quite fascinating as the public was in favor of entrepreneurship.
Findings
The results received as an output of the research conducted showed that people still put a lot of faith in entrepreneurship. About 96.78% of the research candidates were familiar with the concepts of entrepreneurship. Around 60% of the research candidates agreed to the point that entrepreneurship is better than family business however, about 35% of the candidates agreed that family business is better that entrepreneurship. Around 77% of the candidates responded in favor of government policies however, about 16% of the candidates were against the government influenced policies regarding the betterment of entrepreneurship. Around 67.37% of the candidates desired to get in the line of business with a new start-up while 32.63% of the candidates desired to get in the family business if they ever got in line of business. Around 72.73% of the candidates believed that entrepreneurship could be helpful in the betterment of the country however; around 27.77% believed that it can make the country worse. Around 68% of the candidates believed that entrepreneurship has influenced the youth of the country to get in the line of business while around 32% of the candidates believed that entrepreneurship hasn’t been influential to the youth of the country. More than 65% of the candidates believed that family businesses established decades ago were successful as compared to those established nowadays. Around 68.74% of the candidates believed that government’s support for entrepreneurs could affect family businesses however; around 16.50% believed that it would not affect family businesses whereas 15.26% believed that both of them have no effect on each other. More than 80% of the candidates agreed that people are getting familiar to the entrepreneurship trends. Around 49% of the candidates believed that entrepreneurship is weak in Pakistan whereas other believed that it is strong or somewhat growing in Pakistan.The results show that just as entrepreneurship has taken over the whole world, Pakistan has also started to follow the trend. More number of people learning about the knowledge of entrepreneurship are getting more in the line of business with the desire of becoming the best entrepreneur. People are more in the favor of entrepreneurship than family business. The candidates selected for the research represent the youth and from their perspective, it is quite clear that entrepreneurship has a better future in Pakistan. In this paper, the discussed factors show that if one desires to get in the line of business, the best option for him would be to become an entrepreneur nowadays because if one has creativity and innovation, only then he/she could flourish. However, many argue that the risk factor in entrepreneurship is very high whereas people also say that there is risk factor involved in every sort of business so why don’t start with something fresh and new. Meanwhile, some people say that it the difference of opinions that affect people’s decision making. On the other hand, if we believe on the facts, about 87% of the people who were teachers, doctors, engineers, accountants and from other professions were successful when they got in the line of business as Entrepreneurs. Therefore, entrepreneurship provides better chances for the public to excel in the field of business rather than following the ancestral lineage in the family business along with the old traditions and cultures.
Conclusion
The variables involved in this research paper have helped in concluding that the scope of entrepreneurship is better as compared to the traditional family business. The survey conducted for this research, shows that entrepreneurship is the priority of most people joining the field of business. However, entrepreneurship has a lot of risks. The risk of going bankrupt has forced many people to go for either jobs or join the family businesses. Moreover, due to this, innovation and creativity is hindered as traditional norms of family business are followed. Entrepreneurship is nowadays, a gateway to success and development, since entrepreneurship is based upon creativity and innovation, it can help develop and grow in the future. Meanwhile, family businesses are operated by a single dominant family controlling the organization on the basis of traditional norms and ancestral teachings which forces the organization leaders to work as their ancestors have worked whereas, entrepreneurship generates new ways, new opportunities and new idea. Mostly people argue that pre-settled businesses such as family businesses have more success rate as compared to new start-ups. However, the pre-settled businesses are only successful if they provide some innovation or if they deviate from the traditional ways of doing business as of their ancestors because when they started the establishment, it was convenient for that time. Nowadays, businesses with the modern thinking and continuously updating their way of doing business can grow successful. Adding more the answer to some questions that which business form is better for the economy, it can be said that both would support the economy but the entrepreneurial mindset with new innovative ideas and creativity will lead to wealth creation and of course which is a better option than family business and also that the entrepreneurial mindset is always attractive to youth and most of them are influenced by the term entrepreneurship. There is no doubt that our environment support family business rather than entrepreneurship this is because of lack of awareness and also because it is easy going for most of the people they just have to join the company and take over to the hard workings of their ancestors which they could have set up a long time ago.
On the whole, entrepreneur has taken over the world to a whole new level and with a very large number of people becoming entrepreneurs, family businesses are transforming into entrepreneurial setups.
References
- https://www.pwc.com/gx/en/services/family-business/family-business-survey-2016/succession.html
- http://journals.sagepub.com/doi/pdf/10.1177/104225879401900105
- https://onlinelibrary.wiley.com/action/doSearch?ContribAuthorStored=Hall%2C+Annika
- http://journals.sagepub.com/doi/pdf/10.1111/j.1741-6248.1992.00283.x
- http://journals.sagepub.com/doi/pdf/10.1177/104225879401900102
