BMA 5119
Family Business
Second Semester: March 6 – April 17, 2011
Tuesday 18:00-21:00
Room BIZ1 #3-4
Instructor: Associate Professor Dr. Yupana Wiwattanakantang
Office: Mochtar Riady Building, #7-44
Phone: (65) 6516-1912
E-mail: yupana@nus.edu.sg
Office hours: Tuesday 3:00-5:00 PM
COURSE DESCRIPTION
The family firm is the most important organizational structure, not just of Asian firms
but also of firms around the world. A renowned example in this region is the Lippo
group—founded by Mr. Mochtar Riady and now controlled by his sons. Other examples
from Singapore are Eu Yang Sang, Far East Organization, and the UOB bank. Looking
further afield international corporations such as Toyota Motors, Michelin, Volkswagen,
BMW, Ferrari, ZARA, Adidas, Hyatt Hotel, H&M, LVMH, and IKEA are family firms. In fact,
family firms dominate almost entire industries such as media, cable T.V., beer, food,
hotel, construction, and automobiles. Why are family firms so prevalent?
This course analyses the characteristics that are unique to family businesses. Topics
includes the role of the founding family in the firm; the specific assets created by the
founding family that are valuable to the firm; how the founding family through its
preferences, affairs and values affects corporate strategies and firm value; how the
family preserves its control while expanding its business worldwide; and various
challenges faced by the firm together with strategies to help it survive across
generations. At the end of the course, students will understand why private equity often
targets family businesses. For instance Bernaud Arnaul has been acquiring a number of
family firms namely Louis Vuitton, Christian Dior, Bulgari, Kenso, Celine, and DFS to
form the Louis Vuitton Moet Hennessy (LVMH) group. His current target is Hermes.
This course is useful to students who plan to work in their family business, or start up
their own business, as it will provide essential knowledge on sustaining family business
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across generations. For students who have other career plans this course is also useful
as family businesses will be your employers, clients, suppliers, or partners and you can
benefit from a deeper understanding of the dynamics involved.
NOTE: The information in this syllabus is not final and may change.
COURSE MATERIALS
The most important readings for the course will be cases.
The following books are valuable references.


Kelin E. Gersick, John A. Davis, Marion McCollom Hampton and Ivan Lansberg.
1996. Generation to Generation: Life Cycles of the Family Business. Harvard
Business School Press.
Randel S. Carlock and John L. Ward. 2001. Strategic Planning for the Family
Business: Parallel Planning to Unity the Family and Business. Palgrave
Macmillan.
GRADE COMPONENTS
Final grades will be based on the following:

Case analyses and presentation (to be done in groups): 45%

Tests: 40%

Class participation: 15%
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BMA 5119
Family Business
1.
The uniqueness of family control
•
Definition of family firms
•
The prevalence of family firms around the world
•
Family/firm specific assets
•
Performance: Do family firms perform better or worse than non-family
firms?
2.
Roadblocks facing family firms
 Family constraints
 Institutional constraints
 Market and Industry constraints
3.
Ownership and control of family firms
 Preserving control inside families: separating control from ownership
 The dynamics of family ownership: coping with the natural tendency of
ownership dilution across generations
 How does the ownership and control increase or destroy the firm value
4.
Succession
 The challenge of transferring specific assets through generations
 The challenge of a simultaneous transferring of management and
ownership
 The challenge from the family: Family feuds
 The challenge of changes
 The challenges of passing control to outsiders
 Professionalization of family firms
5. Governance
 Problems of governance in family firms
 Ideal governance
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