Question

Family business has several challenges,can you tell me some of them that will cause a family business to fail?

Research-Look up stories on the family run business,Forever 21.It is a company that has failed in many ways.What could this family have done different?

Answer 1

Ans-There are many reason behind the family business to fails.

a) Pressure to hire family member:In the family business very difficult to say no to family members who want to join in your business.

b) Lack of training:The informal culture found in many family business can result in a lax approach to training new employees.

c) Source for growth:-In a family business very difficult to get a capital and resources for growing the business.

d) Family own problem:it means physical emotional and financial problems among family member can greatly impact the day to day operation of to the business.

e) High turnover of non family employees: non family employees may feel the greater opportunity to exist within the business and grows.

Now we came on topic Forever 21 company failed.

This company founded by Korean immigrants husband and wife.

Forever 21 fastest growing fashion store. That store outfit for younger teenager girls. At initial time it's favorite among Coustmers b/z it have huge collection of clothes. It have 800 plus world wide store.

But there are some reason for fails the company. But here we can discuss about family reason for failure.

It challenge was fact that they were susess over a specified time period, the absence of Board of directors who could question the management.

The company headed by Do won change who was CEO and founder.

Their daughter working as vice president and another one sister as a vice president of merchandising.

The company could not hire experienced people for company. All the family member join in company. And working with own decision. .

This leads family unable to hire expert from outside for company. And also when some people hire no one follow her recommendations. Theses above factors company goes in losses and finally announced for bankruptcy.