Happier Family Businesses are Controlled by One Family, Not Branches of Them

As family businesses move to one generation to the next, family ownership is increasingly likely to be based on different branches of the family, but this isn’t leading to better businesses, nor happier families. Research by KPMG and Zeppelin University in Germany found a clear trend towards family control of businesses moving towards shareholder circles that organise around branches, and away from single-family ownership. But the research also found problems with this trend towards branch ownership for both the business and the family. Control through branch ownership is usually organised by each branch making a decision and each branch deciding on who’s going to be their representative. Under this structure, shareholders can only sell shares to others within their branch. But the one family, or extended family ownership structure functions as one unit and all members of the family think as one family. One leader is chosen to be the representative of the family for the business and decisions are made through the majority, not through the branches.