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MNE3704 ASSIGNEMNT 6 SEMSETER 2 2023 solution
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MNE3704 ASSIGNEMNT 6 SEMSETER 2 2023 solution
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BMZ ACADEMYBMZ ACADEMY
@061 262 1185/068 053 8213/0717 513 144
1|Page
, BMZ ACADEMY
Table of Contents
Question 1 ............................................................................................................................................................... 3
1.1 Define the concept of family governance and explain how it benefits the energy company. ............................. 3
1.2 Identify and discuss six (6) challenges to family governance that Josè’s family successfully overcame. Indicate
with practical examples from the case study how Josè’s family overcame these challenges. ................................ 3
1.3 Based on the tourism business, identify six (6) challenges to family governance that the Tourism enterprise
could not avoid. Support your answer with relevant examples from the case study indicating how the tourism
enterprise could not avoid these challenges. .......................................................................................................... 5
1.4 Explain blurred system boundaries and indicate how the Tourism enterprise was trapped into blurred system
boundaries. ............................................................................................................................................................. 7
1.5 Explain joint optimisation of a family business and indicate how it benefitted José's family business. .............. 8
Question 2 ............................................................................................................................................................... 9
2.1 Why are family-business CEOs often an obstacle to the very succession and continuity efforts they so
prominently subscribe to? (8) .................................................................................................................................. 9
2.2 If the CEO spouse role is so important, why does it remain largely invisible to people outside the family—to
scholars, board members, and advisers? (7) ........................................................................................................ 10
2.3 Critically discuss the CEO spouse role type of a Chief Trust Officer, and the implications of this role type for
succession and continuity in the family firm? (5) ................................................................................................... 11
Question 3 ............................................................................................................................................................. 13
3.1.1 Concept of zero-sum dynamics in family-owned businesses ....................................................................... 13
3.1.2 Examples of zero-sum dynamics in family firms ........................................................................................... 14
3.2 Nine useful policies for family-owned businesses ........................................................................................... 14
3.3 Three common traps for new leaders in innovation ......................................................................................... 18
References ............................................................................................................................................................ 20
IMPORTANT NOTES TO CONSIDER .............................................................................................................................. 21
CONTACT BMZ ACADEMY @061 262 1185/068 053 8213/0717 513 144 ......................................................... 22
2|Page
, BMZ ACADEMY
Question 1
1.1 Define the concept of family governance and explain how it benefits the energy
company.
According to Basco and Rodríguez (2011) family governance refers to the set of rules,
processes, and structures that guide decision-making and management within a
family-owned business. It involves establishing clear roles, responsibilities, and
communication channels among family members involved in the business (Chrisman,
Chua & Steier, 2003).
Family governance benefits the energy company in several ways. Firstly, it helps to
maintain family harmony by providing a framework for resolving conflicts and making
decisions collectively. This ensures that family dynamics do not negatively impact the
business operations. Secondly, it promotes long-term sustainability by establishing
mechanisms for succession planning and professionalizing the management of the
company. This ensures that the business can adapt to changing market conditions and
remain competitive. Lastly, family governance enhances transparency and
accountability, reducing the risk of nepotism or favoritism within the company. This
fosters trust among stakeholders and improves overall corporate governance.
1.2 Identify and discuss six (6) challenges to family governance that Josè’s family
successfully overcame. Indicate with practical examples from the case study how
Josè’s family overcame these challenges.
Succession Planning
According to Basco and Rodríguez (2011) Josè's family successfully overcame the
challenge of succession planning by implementing a structured process. They
established a family council to evaluate potential successors based on merit and
qualifications, rather than solely relying on family ties (Chrisman et al., 2003).
Conflict Resolution
The family faced conflicts related to business decisions. They overcame this challenge
by creating a family constitution that outlined decision-making processes and
3|Page
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