Loose and tight controls

Jennifer Pendergast
Jennifer Pendergast

Family businesses often pride themselves on maintaining a strong and consistent culture built on the family legacy and values.  While this adherence to a strong culture can be one of the greatest strengths of a family business, it can be particularly challenging when entering foreign markets. 

Family businesses that successfully expand beyond their country borders manage the balance of loose and tight controls.  They identify the key elements of their culture – the ones they can’t operate successfully without – and develop ways to transmit them across borders.  Transmission mechanisms may be formal – such as training programs or  job evaluations that measure adherence to culture.  Or, they may be informal, such as visits from headquarters personnel to remote locations or opportunities for managers in remote locations to visit headquarters. 

At the same time, successful international family businesses understand when they need to relax their culture to accommodate differences in international markets.  Successful international family businesses in a recent study unanimously supported the empowerment of local management to run their international operations.  Clearly defining priorities for those managers at the outset, gathering data that allowed home country management to track performance and hiring strong in-country talent were all identified as keys to success.

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