German Family Enterprises

Description

Preface of the Second Edition Preface of the First Edition Contents About the Authors List of Figures List of Tables 1: Introduction: Characterizing Family-Owned Enterprises and Assessing Them Concerning Criteria Such as Family Involvement, Si... 1.1 Family Enterprises: The German Pattern 1.2 The Measurement of Longevity, Independence, and Vitality 1.3 Structure and Goals of the Collection 1.4 Definition of Family Enterprise 1.5 Company Size Classes: A Matter of Definition References 2: Structure and Age of German Family Enterprises 2.1 Range of German Family Enterprises: From Local to Global Player 2.1.1 The Total Range: EUR 12 Million to EUR 231 Billion 2.1.2 More than 200 Companies Worth Billions Are Family-Owned 2.2 Age Structure 2.3 Development of the Current Structure Over Centuries 2.4 Types of Enterprise in Germany 2.4.1 Industry Concentration 2.4.2 Corporate and Industry Developments Over Centuries 2.4.3 Distribution of Market Shares References 3: Development of the 500 Biggest Family Enterprises Since Foundation 3.1 Growth as an Indicator of Success 3.1.1 Determinants of Growth 3.2 The Data 3.2.1 Research Objectives 3.2.2 Data Set 3.2.3 Results of the Study 3.2.4 Data Preparation 3.2.5 Data Description 3.2.6 The Long-Term Analysis 3.3 The Methodology 3.3.1 Compound Annual Growth Rate 3.3.2 Data and Assumptions 3.4 Results 3.4.1 General Description 3.4.2 The 25 Largest Family Businesses of the Sample 3.4.3 The 25 Smallest Family Businesses of the Sample 3.4.4 Upper and Lower Limits 3.5 Interpretation of the Results 3.6 Further Calculations Based on the CAGR 3.7 Conclusion References 4: Continuous Development to Longevity 4.1 The Status of Analyzing Longevity 4.1.1 Explaining Continuous Development as the Research Question 4.1.1.1 Misleading Conclusion on the Short Life-Expectancy of Family Enterprises 4.1.1.2 Continuous Development as the Norm 4.1.1.3 Continuous Development Can Lead to Both Large and Small Old Enterprises 4.1.2 Extant Research on Longevity 4.1.2.1 The Gap for Our Research 4.2 The Prerequisite of the Long-Term Orientation 4.2.1 Our Research Perspective: Avoiding the Downfall 4.2.1.1 The Misleading Doctrine of Success Factors 4.2.2 Short-Term Orientation 4.2.2.1 Shareholder Value Doctrine as Inducement to Short-Term Orientation 4.2.2.2 Example of Short-Termism 4.2.3 The Essence of Long-Term Orientation 4.2.3.1 The Long-Term Objectives of Family Business Owners 4.2.3.2 What is Long-Term Orientation Anyway? The Case of Special Prices The Special Discount for First Trial Orders 4.2.3.3 The Misleading Doctrine of Success Factors 4.2.4 The Prerequisites of Longevity 4.2.4.1 Prerequisites Qualifying for the Long Run 4.2.4.2 The Prerequisites on Two Levels: Enterprise and Business 4.2.5 Comparing Success Factor Strategy and Prerequisites-Based Strategy Long Term Orientation 4.3 The Prerequisites of Longevity for a Business 4.3.1 The Level of Businesses and Its Industry 4.3.1.1 ``Business´´ as ``Strategic Business Unit´´ 4.3.1.2 The Sustainable Industry 4.3.2 The Sustainable Business Model 4.3.2.1 Value Creation 4.3.2.2 Multitude of Options 4.3.2.3 Conclusion 4.3.3 The Prerequisite of Profitable Performance 4.3.3.1 Profit is the Effect of Performance 4.3.3.2 The Mental Models 4.3.3.3 Quality is the Most Important and Most Rewarding KPI 4.3.3.4 The Pricing-Based Profitability 4.3.3.5 The Volume-Based Productivity 4.3.3.6 The Engineering- and Manufacturing-Based Productivity 4.3.3.7 The Productivity in Reducing Capital-Intensity 4.3.3.8 The Employee-Focused Productivity 4.3.3.9 The Low-Cost-Based Productivity and Its Risks 4.3.4 The Prerequisite of Manageable Growth 4.3.5 Implementation Strategies for Renewal and Development 4.3.5.1 The Innovation Requirement 4.3.6 The Capital Investment Strategy of Any Development 4.3.6.1 The Capital Investment Requirement 4.3.6.2 The Timeless Relevance 4.3.6.3 Phase-Specific Strategies 4.3.7 Conclusion 4.3.7.1 Other Functional Strategies 4.3.8 Conclusion 4.4 The Prerequisites of Longevity for Family-Owned Enterprises 4.4.1 The Relevance of the Enterprise´s Longevity 4.4.2 The Macroeconomic Viability and the Political Support of Family-Owned Enterprises 4.4.2.1 The Viable Environment: Opportunities and Threats and Force Majeure 4.4.2.2 Support or Hindrances 4.4.3 Financial Stability Based on Consolidated Profitability 4.4.3.1 The Level of Reasonable Profits 4.4.3.2 The Functions of Profits 4.4.3.3 The Requirement of Consolidated Profitability 4.4.3.4 The Requirement of a Solid Profit Source 4.4.3.5 The Requirement of Limited Profit Distribution 4.4.3.6 The Risk of Cumulation of Extraordinary Losses and Weakness in the Base Business 4.4.4 The Sustainability of the Owners´ Group and Their Influence on Strategy 4.4.4.1 The Sustainability of the Owners´ Group 4.4.4.2 Cohesion Factors as per Pieper and the Socioemotional Wealth Theory 4.4.4.3 High or Low Separation Hurdles 4.4.4.4 Maintaining the Families´ Independence 4.4.5 Long-Term Oriented and Competent Strategic Management 4.4.5.1 The Directive of Long-Term Orientation 4.4.5.2 The Competence Based on Long Tenures Examples 4.4.6 Avoidance of Existence-Threatening Hazards 4.4.6.1 Existence-Threatening Hazards 4.4.6.2 The Continuous Deterioration 4.4.6.3 The Epic Mistake 4.4.6.4 Compliance and Environmental Protection 4.4.6.5 The Accidents 4.4.7 Some Specific Features of the Longevity of German Family Enterprises 4.4.8 Conclusion 4.4.8.1 The Many Factors Which Are Relevant for Any Enterprise 4.4.8.2 Family Business Management is Management Plus 4.4.8.3 Longevity and Age References 5: The Issue of Required Growth: A Literature Review 5.1 Growth and Family Business 5.2 Descriptive Analysis 5.3 Thematic Analysis 5.3.1 Strategy 5.3.2 Finance 5.3.3 Specific Business Aspects 5.3.4 Entrepreneurship 5.3.5 Life Cycle 5.3.6 China 5.3.7 Family Versus Nonfamily Businesses 5.3.8 Social Aspects 5.3.9 Governance 5.3.10 Influences Through Environment 5.3.11 Succession 5.3.12 Other 5.4 Synthesis References 6: Requirements for Mature Growth 6.1 Phase Theorem 6.2 First Generation´s Willingness to Grow 6.3 Second Generation´s Developmental Needs 6.3.1 Need 6.3.2 Options 6.3.3 Capabilities 6.3.4 Willingness 6.4 Viable Growth Path: The Seibold-Lantelme-Kormann-Formula (SLK-Formula) 6.5 The Growth of Family Businesses in the Third and Following Generations 6.5.1 The Crucial Role of the Will and Its Implications 6.5.2 Independence 6.5.3 Evolutionary Growth Path 6.5.4 The Noncritical Role of Growth Financing and Its Implications 6.5.5 Implications of the Results for Family Members 6.5.5.1 Socialization 6.5.5.2 Succession 6.5.5.3 Provision of Internal Independence 6.6 Conclusion References 7: Critical Disruptions in the Development 7.1 The Hazards to Development 7.1.1 Extant Research 7.1.2 Intended Contribution 7.2 The Two Perspectives: Form and Origin of Disruptive Development 7.3 Form of Disruptions with Continuation of the Enterprise 7.3.1 Relevance and Overview 7.3.2 Crisis and Survival 7.3.3 Concentration of Activities to a Defendable Position 7.3.4 Change of Portfolio 7.3.5 Exit of Shareholders 7.4 Form of Disruptions with Mergers of Family Enterprises 7.5 Form of Disruptions with Disappearance of the Family Enterprise 7.5.1 Relevance and Overview 7.5.2 Lantelme and Frericks´ Research on Downfall of Companies 7.6 Origins of Environment-Induced Disruptions 7.6.1 Relevance and Overview 7.6.2 Disruptions Induced by Recession 7.6.3 Disruptions Induced by Macroeconomic Changes 7.6.4 Technology Substitution and Industry Downfall 7.6.5 Force Majeure 7.7 Origins of Business-Induced Disruptions 7.7.1 Relevance and Overview 7.7.2 Disruptions in the Founding Generation 7.7.3 Disruption During the Transition Phase 7.7.4 Business-Induced Disruptions in the Mature Phase 7.7.5 Disruptions Caused by Industry Characteristics 7.7.6 Disruptions Caused by ``Liability of Aging´´ and ``Rigidity´´ 7.7.7 Disruptions Caused by Damages and Loss of Market 7.8 Origins of Management-Induced Disruptions 7.8.1 Relevance and Overview 7.8.2 Disruptions Caused by Derailed Attitudes 7.8.3 Disruptions Caused by Big Mistakes 7.8.4 Disruptions Caused by Irresponsibility 7.8.5 Disruptions Caused by Illegal Actions 7.9 Origins of Owner-Induced Disruptions 7.9.1 Relevance and Overview 7.9.2 Relevant Extant Research 7.9.3 Founding- or Single-Owner-Induced Disruptions 7.9.4 Transition 7.9.5 Multi-Owner-Induced Disruptions 7.9.6 Separation Factors 7.9.7 High or Low Separation Hurdles 7.9.8 The Concept of Interlocking Factors Supporting or Reducing Cohesion 7.10 The Summary of Empirical Incidence on Root Causes 7.10.1 The Basis of the Research 7.10.2 The Business- and Management-Induced Causes 7.10.3 The Owner-Induced Causes 7.10.4 Analysis of the Cases of Shareholder Exit by Redlefsen 7.10.5 The Different Root Causes in Medium-Sized Companies as Analyzed by Prigge 7.11 The Different Reasons for Disappearance in Family and Public Enterprises 7.11.1 Research on the Origins of Downfall of Public Companies 7.11.2 The Consolidation of Research on Root Causes in Family and Public Enterprises 7.11.3 The Strange Cases of Listed Family Enterprises References 8: Conclusion: Orientation Regarding Direction of Future Research and Strategies for Supporting Longevity 8.1 Need for Further Research 8.2 Differentiation of Research on Family-Owned Enterprises 8.3 Tentative Conclusions on Prerequisites for Sustainability 8.4 The Connections Between Growth and Disappearance 8.5 The Priorities in Strategy 8.6 Future of German Family Enterprises References Appendix Abstract Essential Reading List