Assessment of Factors Influencing Performance of Family Businesses in Ethiopia: Common challenges
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Date
2022-06
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Addis Ababa University
Abstract
The purpose of this study was to examine many factors associated with family owned businesses that lead to business success and profitability in Ethiopia. The study takes three independent variables that could support Family business to its success, which are Governance, Succession planning, and Education and training. The many problems that arise in family owned businesses are putted/concluded under this variable in this study. This research is a descriptive research design. It can use a wide variety of research methods to investigate one or more variables. The researcher does not control or manipulate any of the variables, but only observes and measures them. Since the context of family business is infant, this type of research is useful when not much is known yet about the topic or problem. Before you can research why something happens, you need to understand how, when and where it happens. Descriptive research is usually defined as a type of quantitative research, though qualitative research can also be used for descriptive purposes. So in this research uses both qualitative and quantitative approach is used to well describe the idea. The research of this study focuses on how family businesses differentiate from non-family businesses and what are the unique challenges and opportunities facing family businesses. This is the main objective and the research question of the study rotates on. Thirty one (31) family businesses companies, and sixty eight (68) participants which are Family business owners and employees, were interviewed and given questionnaires during the data collection. All were family-owned and minority was not family-run. The theoretical review consists governance theories like Agency Theory, Social Capital Theory, Stewardship Theory and Transaction cost economy, which all has its good sides and downfall on supporting Family business Governance. The Empirical review will review using studies made laying on the three variables of this study. And, when we come to the conceptual frame work is made out of the three variables and their relationship among them to achieve a better performance and success. The research findings were collected data’s outcomes, which will show the uniqueness of this business type. This uniqueness also causes the special challenges and opportunities, which family businesses face in their operations. The most significant characteristic that separates family businesses from non-family businesses is the family’s impact on the business and ownership. The unique family business characteristics, challenges and opportunities stated in the theoretical framework can be applied to the family businesses used in this research. It can be stated companies fit the concept of a typical family business, which is unique compared to other businesses. All of the research findings presented can be called valid and reliable inside this study only and should not be generalized elsewhere due to the limited amount of interviewees used in this research, considering Ethiopia is a very wide country