Self-reliance is a strong part of the American dream, and owning your own business can be a large part of it. The dream takes on a special manifestation, both for the better or the worse, when the whole family is involved. But lack of communication, personality clashes, and the inability to separate work and family life can add stress to the already risky world of business.
Working in a family-owned business can have many rewards. The best advantage of a family-run business is a reduction of the agency problem. This occurs when an employee does not have the same priorities as the owner, and there is a cost involved in keeping everyone pointed in the same direction. Even the owner is the president, they still must contend with other managers. But if everyone is related, and they have each other's best interests in mind, this is less of a problem.
The second is ability to raise their children in the business. Some areas of commerce do not cater well to having kids around. However, in the case of some industries like farming and wine making, even the smallest kids can be put to work and learn the business from the ground up, so to speak. It would have been clear early on which skills each child could contribute and which direction his or her career could probably take. Employees are thus hired knowing far more about the company than most incoming CEO's do.
One would think that if a family business survived long enough to be handed down, it should be able to handle the passing of a baton. But this is not so. If succession falls to more than one person, it can be very difficult to find out who is in charge. On the other hand, if only one person is in a position to take over, that person could feel pressured into a job that does not interest him or her. Many family businesses do not survive this change of command and either fail or are taken over.
A family business does not need to create a corporate culture: this c...