Family garment businesses are generally owned, controlled and operated by the members of the same family. These businesses also run through generations altogether. More than fifty percent of the family businesses shares are owned by the family members itself. Many of the old big shot companies of the garment sector founded in last centuries were organized by members of the same family. The infrastructure of this business generally has family members at top management position or board of director position, whereas outsiders are recruited as employees at middle and lower level of management. But here it is important to maintain harmony and management amongst the family members, as lack of it can give rise to conflict or clashes between them for money and power related issues.
Family members have the caliber to strengthen the business if faithfulness and dedication exists among them. However problem arises when less talented member has to be given preference against more competent outsider in top position, in such situation the overall productivity is adversely affected.
Points to be considered for setting up family business for garment business
Setting up of family business requires certain guidelines and points to be taken care of as there are a number of issues to be considered.
- The decisions that are taken in family business should be based on professional grounds and not personal factors.
- The communication between the family members should be clear and not vague.
- The succession decision should be such that do not result into bitterness among other family members.
- The finances of the family should not be wholly dependent on the family business only.
- The position and responsibilities should differ for active, less active and outside shareholder of the companys shares.
- The shares should be allocated to non-family members as well as family members.
- Strategies should be developed in order to resolve if professional and personal conflicts arises.
- If you are CEO of the company then also, then other members should feel free to communicate with you.
Before setting up any business it is important to set criteria for the remuneration to be allocated to its employees. This holds true even for garment family businesses. Some of the points to be kept in mind are as follows:
- The family members should not be employed in business were there is huge inflation in salary.
- The fringe benefits, bonus or incentives should be given based on the criteria that is set and it should not differ on personal grounds.
- Also the non-family members should be given the same remuneration as the family members.
- The pay for the family member should be decided on their caliber and qualification and not on their personal needs.
- The remuneration for post retirement should be decided beforehand.
Working in the garment company owned and managed by single family and working for an outside garment company makes great deal of difference. There are many advantages of working in family businesses of garment sector:
It increases stability of the organization as it is known that the business is also being set up for future generations. It results into long term planning for the growth and development of the business.
There are increased chances of loyalty as family members stick to each other through thick and thin times.
Generally members of the same family share same values and beliefs this facilitates in taking decisions and providing extra competitive edge to your business.
Sometimes family members adjust to lower salaries when things are not good monetary wise in the company and sometimes may even do not take pay when there is money crises in the organization. This cannot be expected from an outsider.
The extra working hours that are required sometimes can be put easily as the family understands that sometimes it is required to put extra effort and also timings could be made flexible.
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