Demystifying Family Businesses - Harvard Business School MBA Program

Demystifying Family Businesses

Course Number 2158

Senior Lecturer Christina R. Wing
Fall; Q1Q2; 3 credits
24 Session
Project

Career Focus

This course is primarily designed for students who are pursuing a career in family run businesses, family owned businesses, investment roles in family offices, or students that might invest in or wholly purchase a family owned business through a private equity firm, search fund model or a public company that through dual class stock is still family controlled.

The course is also useful for students who are planning to work in companies that advise or support family owned businesses. It may further be interesting for students seeking to advance their knowledge of general management, strategy, succession and governance issues in the context of a challenging and sometimes emotionally driven work environment.

Educational Objectives

Learning how to work in or run a family business, create and run a family office, invest in a family business and work within any of these structures.

Modules explore:

1. Dynamics of a Family Business / Family Structure:
  • What is a Family Operating Business vs. a Family Office? What structures should each have and why? The differences between nepotism and professionalism. How to communicate and negotiate with family members. Succession issues and potential solutions.
2. Governance and Fiduciary Duty:
  • Ownership rights verses best practices of operational control. Corporate social responsibility in the family business. How to deal with decisions of succession and governance with multi-generational control. When is it best to sell? Differences and similarities within Public and Private Companies.
3. Portfolio Management and Investment Strategy:
  • Responsibilities to all Stakeholders - Employees, Customers, Society and Shareholders. Understanding financial analysis and literacy. Potential alternative value creation for family enterprises. Assessing risk, entrepreneurial ventures and overall diversification. How to create consensus on family wealth goals and consumption levels.
4. Building a Legacy:
  • We will discuss how internal and external pressures lead to multi-generational success. We will discuss ego - How to anticipate and manage it. We will also discuss impact investing and partnerships. Structures of Charitable giving that are tax efficient.

Cases focus on established and emerging companies, products, and personalities in family businesses and family offices both domestically and internationally. We will have guests that have been successful and failed in both settings.

Course Content and Organization

The course consists of 24 sessions, and includes a final project. Grading is based on class participation (50%) and the final project (50%).