Family Business Theory

The same idea has been analyzed by researchers in the field of organizational behavior. There is a trait called personality A, which refers to people who are aggressive, impatient, and competitive. Because personality A types thrive in one-to-one negotiations, common sense would indicate that these people would be at the top of most organizational chains, but the opposite happens. Personality A types are actually great as salespersons and as entrepreneurs. However, most of the times they lack the patience and analytical skills required to manage the bigger organizational units and departments of today government and business world (Robbins, 2003).
The good news for personality A types is that their skills can again be very useful at the top

In conclusion, shifting a firm to a bigger size and making it stay in business for many years is extremely difficult to achieve as proven by data from the small business administration which found out that there is a rapid drop in the number of businesses as the number of employees increases. For example, in a 1983 survey, 2,500,000 businesses had less than 20 employees, 300,000 had between 20 and 49 employees, 100,000 had between 50 and 100 employees, and only 80,000 had more than 100 employees (Ward, 1987).
2.3.7 Life cycles of family business. An important concept in family business theory is the life-cycle model. Life cycle theories derived from biological analogies and have become useful tools in the study of organizations. The model is simple. It states that all organisms are born, grow, mature, decline, and die.
However, opposite to the biological organisms, organizations have a chance during maturity of renewal through change (Ward, 1997). In other words, organizations have the potential of experiencing rebirth and start the life process all over again (Gersick et al.,

For example, in the early stage of organizational development the goal is survival, the structure is centralized, the owner makes most decisions and even solves operating day to day problems. Later on, in the middle stage of organizational development the goal is stability, operating decisions are decentralized, and the owner makes decisions involving coordination between departments occasionally spending some time in strategic decisions. Finally, in the late stage the goal is to preserve market share and organizational efficiency, most activities are decentralized, and the owner spends more time making strategic decisions (Gersick et al., 1997; Headd & Kirchhoff, 2009; Ward, 1987,