72 Section 2 Chapter and Lecture Notes
Chapter 14 Key Nonfamily Management
Learning Objectives
1. To explore the critical role that nonfamily managers play in family-owned and
family-controlled corporations.
2. To discuss the difference in perceptions about the family business held by family
members and nonfamily managers
Chapter 14 Essence
The Discovery Action Research project found that nonfamily managers tended to
regard their firms positively overall. They also experienced a unique set of challenges.
For nonfamily managers, the complexity of getting their job done is compounded by the
When business values and philosophies that underlie all strategic planning
assumptions are transmitted primarily through the family, nonfamily managers may feel
left out of the loop. This has negative implications both for their ability to contribute in
key management positions and for the motivating potential of the job they perform.
Nonfamily managers were not as satisfied with career opportunities and their
compensation as family managers perceived them to be. Still, career opportunities
represent a resource that along with family unity, the Discovery Research project found,
may endow a family business with unique competencies that can be turned into
competitive advantage.
Some actions that family managers can take to overcome the challenges identified
are:
Actively involve nonfamily managers in business plans, succession plans, and the
strategic direction of the business.
Section 2 Chapter and Lecture Notes 73
Periodically hold meetings between key nonfamily managers and shareholders to
promote mutual understanding.
Discussion Questions
1. Why are nonfamily managers critical to the survival and continuity of the family
business?
Nonfamily managers often bring with them skills that do not exist in the family. A
technically oriented business-owning family, for example, may lack the financial
expertise needed as the company grows. But perhaps the largest contribution that
2. What are the biggest challenges to nonfamily management retention and
motivation?
The biggest challenges to nonfamily management retention and motivation include
the perception that career opportunities may not be as readily available as in other
companies and that compensation is not as equitable as in public management-
74 Section 2 Chapter and Lecture Notes
Relevant Case Resources
The Fasteners for Retail: A Question of Succession case represents the best example
of the critical role of key nonfamily management in the family business. The Ferré Media