0717513144 MNE3704 ASSESS 6 SEM 2 2023
DISCLAIMER
The MNE3704 assignment 6 Semester 2 2023 is a guide that help students to
answer their 6th assessment. Therefore, students can use as the document
contains different pools of questions. Those who need further assistance may
contact the given details:
CONTACT NUMBER:
071 751 3144
EMAIL
,0717513144 MNE3704 ASSESS 6 SEM 2 2023
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
, 0717513144 MNE3704 ASSESS 6 SEM 2 2023
The family faced conflicts related to business decisions. They overcame this challenge
by creating a family constitution that outlined decision-making processes and
established a family assembly where conflicts could be discussed and resolved. The
case study mentions that Josè's family successfully resolved conflicts through regular
family meetings and discussions (Chrisman et al., 2003). They established a culture
of open communication and active listening, allowing family members to express their
opinions and reach consensus.
Separation of Ownership and Management
Josè's family separated ownership and management roles by hiring professional
managers to run the business. This allowed family members to focus on strategic
decision-making rather than day-to-day operations.
Professionalization
The family recognized the need to professionalize the business and brought in external
expertise to improve governance practices, financial management, and operational
efficiency. The family recognized the need to bring in outside expertise to manage the
business effectively (Chrisman et al., 2003). They hired professional managers who
brought specialized knowledge and experience, enabling the company's growth and
success.
Communication
Effective communication was a challenge for the family. They addressed this by
establishing regular family meetings and implementing transparent communication
channels to ensure that all family members were informed and involved in decision-
making.
Balancing Family and Business Interests
Josè's family successfully balanced the interests of the family and the business by
creating a family council that represented different generations and interests. This
allowed for open dialogue and decision-making that considered both family dynamics
and business objectives (Chrisman et al., 2003).
DISCLAIMER
The MNE3704 assignment 6 Semester 2 2023 is a guide that help students to
answer their 6th assessment. Therefore, students can use as the document
contains different pools of questions. Those who need further assistance may
contact the given details:
CONTACT NUMBER:
071 751 3144
,0717513144 MNE3704 ASSESS 6 SEM 2 2023
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
, 0717513144 MNE3704 ASSESS 6 SEM 2 2023
The family faced conflicts related to business decisions. They overcame this challenge
by creating a family constitution that outlined decision-making processes and
established a family assembly where conflicts could be discussed and resolved. The
case study mentions that Josè's family successfully resolved conflicts through regular
family meetings and discussions (Chrisman et al., 2003). They established a culture
of open communication and active listening, allowing family members to express their
opinions and reach consensus.
Separation of Ownership and Management
Josè's family separated ownership and management roles by hiring professional
managers to run the business. This allowed family members to focus on strategic
decision-making rather than day-to-day operations.
Professionalization
The family recognized the need to professionalize the business and brought in external
expertise to improve governance practices, financial management, and operational
efficiency. The family recognized the need to bring in outside expertise to manage the
business effectively (Chrisman et al., 2003). They hired professional managers who
brought specialized knowledge and experience, enabling the company's growth and
success.
Communication
Effective communication was a challenge for the family. They addressed this by
establishing regular family meetings and implementing transparent communication
channels to ensure that all family members were informed and involved in decision-
making.
Balancing Family and Business Interests
Josè's family successfully balanced the interests of the family and the business by
creating a family council that represented different generations and interests. This
allowed for open dialogue and decision-making that considered both family dynamics
and business objectives (Chrisman et al., 2003).
