AFF9401

Family business issues IV

Professor Claudio Romano and Dr George Tanewski

6 credit points in the Executive Certificate in Family Business · 3 hours per week · Caulfield

Objectives On completion of this subject students will be able to: achieve an understanding of the business environment (eg marketing and financial management) in relation to growth strategies in the family business; have an understanding of the concepts and applications of systematic risk assessment and management; identify the perspectives and dimensions of financing options in relation to strategic planning; achieve a better understanding of how to explore and manage financing innovation; identify and explain the nature and traditional sources of finance available to a family business; assess the costs, risks, and benefits of various sources of finance; analyse the impact of a range of funding options on the profitability, liquidity, and long-term survival prospects of a family business, and be able to identify and develop effective competitive strategies in the family business.

Synopsis This subject has been designed to provide graduates who are owners, managers, family business members, family and private business professionals, as well as prospective business owners the means to explore the challenges and opportunities associated with developing and managing growth within the business. Growing an enterprise is one of the most important and difficult stages in the business lifecycle. To adequately manage growth, it's necessary to have an overall understanding of the environment of the business (marketing, planning, financial, and risk assessment). To ascertain the types of challenges growth-oriented firms may face, issues such as risk and financial management (eg inadequate working capital, cash flow, profits, and expenses problems) are discussed. This subject discusses strategic options and the impact of various funding options on financial performance. The uses of venture capital are explored in relation to ownership and succession issues, as well as to the business lifecycle (early stage or 'start up' financing and later stage or 'development' financing). The subject also discusses what venture capital investors look for in making an investment decision, the due diligence process, structuring the deal, likely involvement of the investor after making the investment, and exit strategies that investors use and what implications these may have on the family business.

Assessment Individual assignment (3-4000 words): 35% · Individual presentation (20 minutes): 15% · Major case study (5000 words): 50%

Prescribed texts

Aronoff C E, Ward J L and Astrachan J H Family business sourcebook II Business Owner Resources, 1996
Gersick K E, Davis J A, McCollom M and Lansberg I Generation to generation: Life cycles of the family business Harvard Business School Press, 1997
Kuratko D F and Welsch H P Entrepreneurial strategy: Text and cases Dryden, 1994

Back to the 1999 Business and Economics Handbook