Once completing high school and starting university studies, it is usually suggested to students to go and work for big, ideally multinational, companies, where there are many learning and development opportunities. Some of these companies are sometimes also referred to as ‘schools’, where graduates go work in order to apply their academic knowledge in a systematic manner, get accustomed with processes and best practices, be mentored by experienced executives, receive soft skills training, understand corporate dynamics and politics, and be fairly treated by an organization that tries to have objective criteria in evaluating performance.
Potential downsides are also sometimes mentioned regarding the work environment that one could face at a family business, such as a culture promoting nepotism instead of meritocracy, the sometimes lower remuneration levels, the conflicts that may exist between family members or the vague decision making processes. Job seekers are warned that the management style of an entrepreneurial leader that is used to be doing everything by himself, regardless of his strengths and weaknesses, and who does not understand when the time has come to delegate duties, may be dangerous for the organization’s and its employees sustainable development.
Although based on the above a multinational organization may appear as a good choice to work for, is its work environment reflective of the reality one has to face if he is willing to start his own business? In spite of the fact that the knowledge and skills acquired from multinational corporations are very useful from a managerial perspective, the problems faced are usually less broad while having more resources (information, financing, people etc.) available when making and implementing decisions, compared to a family business or a start-up. In addition to this, sometimes managers in multinational companies may just have to execute an already formulated strategy from their headquarters, whereas executives in family businesses usually have to both create a strategy and implement it. Finally, executives in multinational companies can survive when delivering poor results by giving explanations and allocating responsibility elsewhere, whereas employees in smaller family businesses have to find a solution fast, since there may be no one below them to point a finger at!
In family businesses, where resources are limited compared to multinational companies, executives have to engage in a more hands-on management style, which is closer to what an entrepreneur has to do when starting a company, acting in many projects as individual contributors rather than as people managers. In addition to this, cross-functional exposure is high and employees have the opportunity to be involved in a breadth of activities, many times outside their job description, just like an entrepreneur that does not have strict boundaries in the tasks he/she has to engage in. Although emotional family members may cause disputes, communications are generally more honest and less political. Finally, the flexible nature of family businesses implies faster decision making processes, in an era where speed and adaptability to change are critical for an organization’s long term existence.
In conclusion, although multinational organizations may instill to their employees a more structured way of thinking, they tend to have them focused on more specific functions and activities, managing to decrease the company’s dependence on them and the chances of training future competitors. On the other hand, family businesses may be less safe workplaces due to their smaller size, however they offer broader learning opportunities in practice and are better at preparing employees that are willing to engage in their own entrepreneurial ventures in the future.
Co-Head of Business Development