Written by:Kevin Hung and Eunice Gao (MBA Candidates)
May 13, 2016
It’s not all fun and games. We’re here to learn.
We are approaching the end of our 2 week study tour, examining family business and entrepreneurship in Europe. Although we have all been enjoying our time in Europe (as described by the previous blog entries), it’s not all fun and games over here. Today was the final formal day of course work in our study of family firms. We went to Erasmus University’s Rotterdam School of Management to discuss some case studies and review some theory with our guest lecturer, Professor Dr. Pursey Heugens.
The class began with a simple sensitization exercise of what would happen if you lost a cherished watch after a late night of partying. The emotions described were more of anger and frustration directed to one self. In the second scenario, what would happen if you lost a cherished watch that was handed down by your father and his father? The emotions would be more of shame and embarrassment to the father. This simple exercise shows what happens if a family firm is not successful in the founding generation compared to what happens if a family firm is not successful in the third generation. The exercise was a good start to our theory of family firms. Family firms tend to be more conservative in successive generations.
Professor Heugens continued to discuss the strategy of family firms which must include the internal wealth preservation, social-emotional wealth maximization and family involvement in management. Our discussion concluded that family firms make different strategic decisions with respect to non-family firms.
Our case study examined the Dutch brewery, Bavaria Beer, and the Swinkels Family. The key takeaway was that dual planning (family and business) in family firms is key, there is a strategic limitation of “familiness”, and it takes more than expressed interest to run a family firm.
In our afternoon session, Professor Heugens went on to discuss how family firms go international. How do family firms seek out a new national context? We looked at Dunning’s eclectic paradigm where the factors are ownership, location and internalization challenges. Our case study examined a Danish company, Danfoss, and their expansion into China. This examination of this case study concluded our formal portion of the study tour.
At the conclusion of the class, we thanked our guest, Professor Heugens, and the hospitality he and Erasmus University has extended to our group. Many students decided to celebrate at the nearby Biergarten, some went shopping, and a handful went to explore the beautiful Dutch architecture.
It has been a very informative study tour and the students wish to send their deepest thanks to Jayne Ference, Dr. Vern Glasner, Dr. Rolf Mirius, and Dr. Rodney Schneck for their organization, thoughts, and patience.
And remember, it’s not all fun and games on study tours… we came here to learn! =D