MNE3704
ASSIGNMENT 2 SEMESTER 2 2025
UNIQUE NO.
DUE DATE: SEPTEMBER 2025
, Family Business Management
Question 1
1.1 Pitfalls family business owners should avoid
Failure to plan for succession: Stuart only held one succession meeting which led
to no action. When he died suddenly, there was no clear leadership transition,
leaving the family unprepared.
Overdependence on the founder: Stuart controlled all decision-making without
involving his children. As a result, the sisters lacked knowledge and business
experience when he passed away.
Absence of governance structures: There were no formal systems or
organizational structures. This led to confusion and conflict when the executors took
control.
Entrusting outsiders without clear boundaries: The executors entrenched
themselves, paid themselves high salaries, and made the daughters feel powerless.
Overstaffing and weak HR practices: Stuart avoided dismissals, leading to bloated
staff and lawsuits after terminations.
Uncoordinated investments: His unrelated global businesses created legal, tax,
and strategic complications.
1.2 Reasons why family business owners delay estate planning
1. Denial about mortality: Stuart did not expect to die suddenly, so he delayed
serious succession planning.
2. Complex family dynamics: With five daughters of different ages and interests,
Stuart may have avoided difficult conversations.
ASSIGNMENT 2 SEMESTER 2 2025
UNIQUE NO.
DUE DATE: SEPTEMBER 2025
, Family Business Management
Question 1
1.1 Pitfalls family business owners should avoid
Failure to plan for succession: Stuart only held one succession meeting which led
to no action. When he died suddenly, there was no clear leadership transition,
leaving the family unprepared.
Overdependence on the founder: Stuart controlled all decision-making without
involving his children. As a result, the sisters lacked knowledge and business
experience when he passed away.
Absence of governance structures: There were no formal systems or
organizational structures. This led to confusion and conflict when the executors took
control.
Entrusting outsiders without clear boundaries: The executors entrenched
themselves, paid themselves high salaries, and made the daughters feel powerless.
Overstaffing and weak HR practices: Stuart avoided dismissals, leading to bloated
staff and lawsuits after terminations.
Uncoordinated investments: His unrelated global businesses created legal, tax,
and strategic complications.
1.2 Reasons why family business owners delay estate planning
1. Denial about mortality: Stuart did not expect to die suddenly, so he delayed
serious succession planning.
2. Complex family dynamics: With five daughters of different ages and interests,
Stuart may have avoided difficult conversations.
