IE's Global MBA is going global!

Last Friday finished the first residential week of the Global MBA 2009 at the IE Business School campus in Madrid. This week along with another week at the end of the program was introduced for the first time in this intake and the feedback has been totally positive. Mariel from the Philippines, residing in Thailand:…

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Singapore hosts next IE Insight Session

On October 23, IE will present its academic offer for Singaporean residents. During this presentation, participants will also learn why IE is one of Europe’s leading business schools and why its MBA programs are considered within the Top 10 in the world. Get more information in the attached presentation and sign up here for this…

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Leading an entrepreneurial family

1595.jpgOctober 2008 | By Cristina Cruz, Professor of Entrepreneurship at IE Business School.

The world has changed and family businesses must change with it if they are to avoid high mortality rates. But this transformation has to come from the top, from the company leader.

Millionaire grandfather, spendthrift son, beggar grandson, or so the Spanish saying goes. In other words, grandfather founds company, comfortable son rests on his laurels, and by the time the third generation comes along thereâ??s nothing left. This particular saying describes the problem facing family businesses on a daily basis.

Only 30% of family businesses reach the second generation and only 15% carry on to the third. The statistics are universal and the phenomenon is repeated everywhere in the world despite cultural differences. Why do family businesses disappear? Problems related to the lack of understanding between members of the family who own the business, the company´s incapacity to adapt to environmental changes, the lack of professionalization and/or the lack of commitment of subsequent generations are some of the most frequent reasons mentioned by family entrepreneurs and researchers. Behind all these reasons lies one common denominator: an inappropriate substitution of leadership which means there is no effective leader to help the company successfully overcome the transitions it is faces. Hence, if leadership is a critical factor for any company´s success, the evidence points to its being even more important for family businesses.

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