Family businesses have distinct characteristics as they often intertwine personal and professional life. Operating such a business demands a separate division of responsibility both within the family and among the employees. This paper analyzes how these roles and responsibilities can be assigned and structured in a manner which enables family members and employees to achieve the goals of the business seamlessly.

Burning Problem Solved: How Should Family Members and Employees Share Responsibilities and Duties in A Family Business?

The most common difficulty for many families running a business is the lack of definition for the various roles. This ambiguity often leads to chaos, conflicts, and ineffectiveness. The solution lies in distributing tasks by competencies, the needs of the business, and the characteristics of the family and worker group the business is composed of.

Summary of the Article

In a family business, the roles and responsibilities of family members and employees revolve around planning, strategy, finance, accounting, marketing, sales, and customer service. The way these roles are distributed depends largely on factors such as the size of the business, the type of business, and the number of family members involved.

Main Content: Clarifying the Roles and Responsibilities Understanding Roles and Responsibilities

Like any organization, a family-operated business has specific two fundamental functions -roles and responsibilities. These tasks and functions do not remain rigid and change as the business operation advance and the family life cycle changes. Underneath is a thorough analysis of how such roles are determined and organized.

Key Note #1:These components lead to establishing business roles and responsibilities –especially, these roles are defined or assigned to employees and family members of the business or organization There is always a scope whereby a family member or employee needs to fill in whenever there are gaps when it comes to developing structures or strategies in any form of business entity. These gaps are always bridged as family-operated businesses tend to scale up or stagnate in different phases of business life cycle. Family members are usually required to play multiple roles during the initial phases to make sure the mobilization of resources takes place. Eventually with the growth of the business, the complexity of tasks increases, and responsibilities are shared.

Also, new generations in a family are able to undergo different changes as the family expands. Over time, family members are expected to shift to a new direction whereby they will have to eventually control and manage the business in the succession of different eras or stages called transition in term of ‘functioning organization.

Key Next #2: Division of Labor in Relation to the Scale, Category, and Structure

The allocation of duties among family members and hired labor depends on these variables:

Business Scale:

As your business grows in scale, a single individual will not be able to manage everything on their own. You will have to hire some employees, and as the company grows, their roles will also grow.

Business Category:

Responsibilities are also determined by the type of business. For example, in a manufacturing business, family members might specialize in the more technical and managerial work, while the hired labor performs the operational work. In a trading business, however, family members may approach the business less by doing more planning and employees may do more of the work.

Family Structure:

How many family members work in the business can also influence the division of work among the family members. A large family will provide more people to share work, but it may also lead to a power struggle. A smaller family may not have families to share the work and might need employees to take on greater responsibility.

Key Note #3: Contextual Functions of the Family Members Engaged in the Business

Family members have critical roles that are unique and specific to a business. The following describes task distributions norms:

Planning and Control Functions:

Business strategy and planning is key in sustaining the growth and development of a firm. In the case of a family business, this area tends to be controlled by one or more family members who, in most cases, understand the vision for the business deeply. While employees may provide some inputs, the final stages of strategic decisions should be made by the family as the legacy is fundamentally linked to their interests future wise.

Finance and Audit Functions

Having a skilled person in charge of managing finances is imperative to ensuring the sustanability of a business. Financially uneducated family members should not take over this role, as it may be more detrimental than beneficial to the firm. Intending to manage finance without adequate skills will hurt the business, because everything will be done wrongly.

Public Relations and Sales

Family members, to some extent, take over the PR and sales functions because of the desire and the easily physicabled impact of those functions on the success of the business. Sales are a function of skills and knowledge. Family members possesses some level of skills and ability to excel in, but many people do not have the selling skill. Thus organizations should focus on hiring and training qualified salespeople as they grow.

Customer Service/Satisfaction: 

Achieving customer satisfaction is something that has to be done by each employee in the business, including family members. Great customer service motivates many customers to come back, therefore everybody in the business needs to give great effort towards sustaining the set standards.

Human Resources: 

The success of a family business depends on loyal and competent staff. It is their responsibility to identify the right people, initiate training, and facilitate career development. A family needs to enhance aspirations towards employees in the organization, for it leads to success in their commitment.

Key Note #4: Special Responsibilities of the Business Family 

These responsibilities must be done by family members only:

Work Culture and Environment: 

Family members are responsible for creating a strong working culture within the business. These members impact the employees’ performance and relationships through the values, work attitude, and principles they teach. Positive organizational culture increase business success.

Protecting the Business: 

The family is also charged with the responsibility of protecting the business from potential risks which may include: internal antagonism, external conflict, or legal action. Family members must ensure that the business has the capacity to deal with these unexpected challenges and continue to prosper.

Key Note #5: Duties of Family Members in a Business

In a family business, family members can wear multiple hats, but it’s important to delineate who is responsible for what:

Ownership:

Normally, the eldest member of the family or a designated successor would have ownership. Ownership comes with authority to manage the business, but it doesn’t mean every family member needs to participate in daily operations as their roles and responsibilities differ.

Mentorship:

Family members who are more experienced serve as mentors for future leaders. They play the role of a advocate by guiding family members and providing integrated strategic guidance along with proper knowledge which helps in achieving the goals of the business.

Management:

A few family members will be assuming a managerial position in the business and will be responsible for overseeing the day to day activities of the business.

Employee Roles:

Less experienced members of the family start their career with the business as employees. It is to their advantage as they get an understanding of how the business operates before they step into new positions.

Key Note #6: Measures for Properly Defining Roles and Responsibilities

Allocation of the Appropriate Role:

Roles have to defined with precision and clarity, particularly for family members so that their skills and talents are put to the best use. The same applies to employees who will be set on a path tailormade for success as long as their skills meet the tasks assigned to them.

Interference:

Family members should not micromanage each other’s responsibilities as doing so will lead to disruption of their tasks. Providing guidance is permissible, however, strict adherence to one’s responsibilities is a must.

Key Outcomes of Defining Roles in Your Family Business

Clearly Define Roles and Responsibilities:

Every team member, including family, should understand their individual and collective responsibilities thoroughly.

Assign Roles Based on Talent and Ability:

Don’t assign roles strictly based on the family tree alone. Ensure that highly skilled and professional people are given roles that correspond with their expertise.

Avoid Interference in Others’ Roles:

Have confidence that your family members and employees are capable of executing their responsibilities with minimal supervision. That will enhance accountability and efficiency in the workplace.

By doing these tips, everyone in the company, especially family members, will work with ease, which will improve organizational culture as well as the growth of the entire family business.