Any family business is composed of both a family and a business. Although the family and the business are separate institutions—each with its own members, goals, and values—they overlap in the family firm. For many people, these two overlapping institutions are the most important areas of their lives.
Families and businesses exist for fundamentally different reasons. The family's primary function is the care and nurturing of family members, while the business is concerned with the production and distribution of goods and/or services. The family's goals are the fullest possible development of each member, regardless of limitations in ability, and the provision of equal opportunities and rewards for each member; the business's goals are profitability and survival.
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The Three-Circle Model of Family Business
Individuals involved, directly or indirectly, in a family business have interests
and perspectives that differ according to their particular situations. The model in
Figure 7-1 shows the ways in which individuals may be involved—as members of
the family, employees of the business, owners of the business, and various combi-