Research n business organization

Family businesses are constantly being studied in corporate organizations because they shed light on basic models and hypotheses such as human and family dynamics, agency theory, social capital theory, theory of the company, economic growth, and labor market theory, among others. Furthermore, experts in this industry are drawn to family businesses as a potential opportunity. In reality, more people are employed in family businesses. As a sector, it is best to maximize knowledge of family businesses and use data about family businesses. In all organizations, corporate governance is significant in determining the health of the system as well as its potential to remain competitive in the market. This paper highlights the significance of corporate governance in the structure for a family business in reference to the News Corporation succession case study.

Koeberle-Schmid, et. al (144), to achieve good corporate governance in an organization, it is necessary to consider the significance of a sustainable economic development. Enhancing the performance of organizations helps to increase the ability of business to access outside capital. Because family business is building blocks of the world business society, their design, development, and success are crucial to global community. Most multi-nationals today were born from small family enterprises that survived the test of time, money and competition. When running a family business, there are many issues that crop up in publicly owned companies. As such, such organizations must be in a position to address problems that are special to their position for them to survive. Most family ventures around the world represent a significant and noteworthy form of both social and economic global landscape. According to research, family owned-enterprises are about 95% of the businesses in the world today (Swain 215). From the studies, business corporations around the world owe their success to family business startups.

Background

While family corporate governance is crucial, most research majorly focuses on legal, strategic control, financial positions of organizations. Most literature does not shed light on family ownership of businesses as well the distinct nature of family firm governance over time. Precisely, a few researchers have based their study on family firms by accessing their success or failures. Such studies fail to point out core outcomes such as succession and ownership, stakeholder benefits, leadership development, business performance and such. Homogeneously, the basic interventions in family-owned business over time focus on governance in areas such as family councils and assembly, offices, the board of directors, shareholders agreements, financial planning tools just to mention but a few (Madison et al 56). However, publications on that subject do not go beyond the description of family owned enterprises. On that regard, it is important to have a more empirical study that focuses on providing more insight on family-owned corporations in governance and succession.

There are many features that describe a family corporation. However, the most outstanding distinction that reflects in the ownership structure. It is easy to assume that family businesses are all about family control. However, some firms do not have their shareholders as family members. In some family business, the stock market listing is a common occurrence. Another characteristic is that the family business structure gives rise to differences in corporate governance provisions (Li et.al 69). For instance, for a business that runs on a wide and different cultural set-up require a unique government framework that reflects this. Because of the importance of family corporations in their role of wealth contribution around the world, their style of governance is a point of consideration. In that regard, studies should now pay attention to investigation the governance of family-owned businesses. Looking at the basics, business governance is all about shareholders and stakeholders and their balanced interests. As such, for a family business to be straightforward to the stakeholders there is the need to consider governance facets such as auditing process, succession, board leadership and the financial position. Therefore, the question and interest of governance and succession with a family business have shot up over the recent years. When it comes to the family firms, it is possible to have a robust framework that caters for a productive and sustainable relationship with the family business shareholder. According to the literature focusing on family business ownership, the approach to the succession of business draws its influence from political, social and historical contexts of a country. Looking at these contexts, it is worth noting that corporate governance is different in different countries.

The literature on corporate governance reveals that governing an organization is one of those factors that influence business performance. As such, in the event where there is conflict regarding matters such as succession, affects the development of the business. In each country, there are different features that set a standard for the corporate governance style. For instance, issues such as changes in the stock market, structure, business practices and capital greatly influence corporate governance matters. The main objective of this literature is to analyze whether the family business needs corporate governance by using the News Corporation case study. This study will shed light on the family governance issues, trends as well as the existing practices and enable family units to maintain their business amidst conflicts or issues such as succession. Therefore, this study is a comprehensive literature that sheds light on family business issues that will allow them to prepare for a public offering.A flawless board of governance will also help to business to transition from one leadership to another. In regards to corporate governance, News

Case Study Literature Review

The extent of family business is wider in the sense that presently one of the largest companies in the world belongs to families. The economic weight of companies such as New Corporation is massive in terms of economic relevance. In all markets, family business takes up a significant proportion in regards to GDP. The convergence theory, as well as shareholder empowerment, shed light on the corporate governance debate (Li et.al 69). There is a pervasive underlying notion that the debate about corporate governance and succession only belong to the legal world. Conversely, this article challenges the assumption through the application of the News Corporation case study. The events surrounding the case study reveal that the move to Delaware significantly undermined the shareholder’s position. In the case study, Madoff does not pay attention to the interests of the shareholders which places the business in a risky place in terms of losing investments to disgruntled shareholders. The corporate control style of News Corp is that it involves a systematic broad that makes the final decisions on behalf of the company. As a result of this leadership, the company was able to create significant operations within and outside the UK. The rapport style of management focuses on areas that the business can extend. As such, News Corp invests in the need to meet the demands of the market. As per contemporary organizational studies, the agency theory is the dominant theoretical foundation. According to the theory, the differentiated needs of the stakeholders such as the chief principals are important when serving the prime purpose of the corporation (Koeberle-Schmid, et. Al 144). Therefore, any conflict of interest within the organization is most likely to cause a rift.

Because the purpose of the corporation is to serve the economic interests of the owners, it is important to pay attention to the design mechanisms to control the behaviors of the agents (Li et.al 69). However, as in the case of the News Corps, these control mechanisms are costly. The organizational success is dependent on the measure of governance implementation as well effectiveness. Objectively, a look into the agency model shows that it is only workable in when there are additional stakeholders apart from the family members. In that regard, the agency model helps to create a balanced, coordinated governance procedure. Back to the News Corp Case study, there lacks the consideration that the business merges with other external frameworks that directly affects the affair of the business in term of governance and even succession (Li et.al 69). According to the agency theory, provides that there is a three-circle model that helps to check the tasks and purposes of each stakeholder. As a result, this helps to minimize cases where stakeholders fail to agree on critical developmental matters.

In every ownership circle, the governance system must be aligned with the position of the shareholders. It is important to note that once a business as News Corp has complex governance, there should goals and obligations that protect the interest of everybody. As such the main task of governance is to protect the security of the asset base as well as the returns. While it is important to consider the family’s position in terms of equity, there are also equally important issues such as guaranteeing compliance with all legal structures and the provisions of accounting. In this case, before News Corp engages in any major step, there should be the need to track all the data that shed light on performance to determine the best angle to take. In this case, the board of directors in charge of checking all the assigned partners such as trustees. However, a careless move would risk losing the confidence of the capital owners in the business as an investment.

The role of the governance in family business corporations is to look into the interests of an operating company through its leadership. The work of the government is to determine and enforce the standards of the executive. As per the cultural values of the governors, the role of the managers and other business executives is to make business choices that define both short and long-term strategies (Li et.al 69). Therefore, a well-functioning leadership works towards avoiding destructive interference from the decisions of the domain management. For instance, the shareholders are in dire need to have a workable solution that will help clarify News Corp’s position about the hacking scandal. Speaking of the shareholders, if governance fails, then it is most likely that the whole business system of News Corp Corporation. It is important to consider that the first two sets of governance are not special to any corporations (Li et.al 99). The only place where the governance tasks are distinct is in the family enterprises. The effectiveness of the governance tasks depends on the ability to serve the interests of the family members. However, in the event where there are extended shareholders the purpose of leadership is to clarify the role of each player.

In the News Corp case, the involvement of the external shareholders creates the need to invest in minimizing manipulation and establishing a sense of belonging through the business enterprise circle (Madison et.al 56). However, governance failure creates room for loss of commitment and lack of continuity. For this reason, News Corp should look for ways to come up with a flow of communication that will eliminate suspicions and distrust. In the bid to create a balance between the agendas of the stakeholders, owners, managers, and employees rely on governance creation that works for their interest. As such, the next chapter discusses the role of governance implementation on ownership and business circles.

Governance Implementation on Ownership and Business Circles

When it comes to private business entities, most legal systems provide that the boards of directors are the ultimate governing authority. Looking at the literature that discusses family businesses, we see that the board members hold power to make complex decisions on behalf of the company. In News Corp, the move by the director to form a new public traded company cultivated tension in terms of the stakeholders’ anticipation. As a result of the announcement, the price of the stock fell by a significant margin. What we derive from this development is that in the event where a company is setting a standard or goal. When running a family business, there many issue that crop up as a publicly owned company. As such, such organizations must be in a position to address questions that require answers for them to survive. Family businesses around the world make up a notable percentage when it comes to both social and economic global landscape. According to research, family owned-enterprises are about 95% of the businesses in the world today (Madison et.al 56). From the studies, business corporations around the world owe their success to family business startups.

Family business governance requires a strategy that caters for all stakeholders without prejudice. Generally, business governance is all about shareholders and stakeholders and their balanced interests. As such, for a family business to have open communication channels with the stakeholders and there should be a careful thought about issues of governance elements such as the auditing process, succession, supervision and financial planning. Therefore, the question and interest of governance and succession with a family business have shot up over the recent years. When it comes to the family firms, it is possible to have a robust framework that caters for a productive and sustainable relationship with the family business shareholder. According to the literature focusing on family business ownership, the approach to the succession of business draws its influence from political, social and historical contexts of a country (Li et.al 69). Looking at these points, it is worth noting that corporate governance is different in different countries.

Through the Enhancement of the performance of organization like News Corp, helps to increase the ability of business to access outside capital. Because family business is the backbone of the world business, their design, development, and survival are crucial to global community success. Most multi-nationals today were born from small family enterprises that survived the test of time, money and competition. When running a family business, there many issues that crop up as a publicly owned company. As such, such organizations must be in a position to come up with workable solutions for them to survive (Koeberle-Schmid, et. al 144). As seen, family businesses worldwide represent form a pillar in both social and economic global landscape. From the studies, business corporations around the world owe their success to family business startups (Madison et.al 56). For News Corp to achieve good corporate governance in an organization, it is paramount to consider the significance of a sustainable economic development. Enhancing the performance of organizations helps to increase the ability of business to access outside capital. Because family business hold together the world business structure, their make, development, and endurance are crucial to global community success.

As stated earlier, the primary interventions in family-owned business over time focus on governance in areas such as family councils and assembly, offices, a board of directors, shareholders agreements, financial planning tools just to mention but a few (Koeberle-Schmid, et. Al 144). However, publications on that subject do not go beyond the description of a family owned corporation. On that regard, it is essential to have a more empirical study that focuses on providing more insight on family-owned corporations when it comes to governance and succession. As such, for a family business to be open about progression to the stakeholders and also there should be a consideration factors such selecting the next leaders as in the case of News Corp (Madison et.al 56). Therefore, the question and interest of governance and company progression with a family business have shot up over the recent years. When it comes to the family firms, it is possible to have a robust framework that caters for a productive and sustainable relationship with the family business shareholder. According to the literature focusing on family business ownership, the approach to the succession of business draws its influence from political, social and historical contexts of a country.

In conclusion, a few researchers have based their study on family firms by accessing their success or failures. Such studies fail to point out core outcomes such as succession and ownership, stakeholder benefits, leadership development, business performance and such. the interventions of family-owned business over time focus on governance in areas such as family councils and assembly, offices, the board of directors, shareholders agreements, financial planning tools just to mention but a few (Li et.al 69). However, publications on that subject do not go beyond the description of a family owned corporation. On that regard, it isoverriding to have a more empirical study that focuses on providing more insight on family-owned corporations in governance and succession. When it comes to the family firms, it is possible to have a robust framework that caters for a productive and sustainable relationship with the family business shareholder. According to the literature focusing on family business ownership, the approach to the succession of business draws its influence from political, social and historical contexts of a country. Looking at these contexts, it is worth noting that corporate governance is different in different countries.

Because the focus of the corporation is to serve the economic interests of the owners, it is best to consider the design mechanisms to control the behaviors of the agents. However, as in the case of the News Corp, these control mechanisms are costly. The organizational success is dependent on the measure of governance implementation as well effectiveness. Objectively, a look into the agency model shows that it is only workable in when there are additional stakeholders apart from the family members. In that regards, the agency model helps to create a balanced and coordinated governance procedure. Back to the News Corp Case study, there lacks the consideration that the business merges with other external frameworks that directly affects the affair of the business in term of governance and even succession (Madison et.al 56). According to the agency theory, provides that there is a three-circle model that helps to check the tasks and purposes of each stakeholder. As a result, this helps to minimize cases where stakeholders fail to agree on key developmental matters.

Works Cited

Koeberle-Schmid, Alexander, Denise Kenyon-Rouvinez, and Ernesto J. Poza. “The Future of

Family Business Governance.” Governance in Family Enterprises. Palgrave Macmillan UK, 2014. 244-257.

Li, Zengquan, et al. “Family Business Governance: An Economics Interpretation and Research

Implications in China.” China Accounting and Finance Review 18.2 (2016): 1-64.

Madison, Kristen, et al. “Viewing family firm behavior and governance through the lens of

agency and stewardship theories.” Family Business Review 29.1 (2016): 65-93.

Swain, Suraj Kumar. “Corporate Governance and Family Business: A Literature

Review.” Siddhant-A Journal of Decision Making 17.3 (2017): 256-258.