In order to experience the potential benefits of teamwork, organisations must supply an internal organisational context that provides the support required for teams to function effectively (Hitt et al. 2006:420; Robbins 2003:267). For example, Robbins (2003:267) found that a shortage of resources will have a direct effect on a team’s ability to perform its job effectively. Similarly, Danes and Lee (2004:364) found that resource constraints in either the family or business system can affect interpersonal transactions.
Supportive resources consist of providing (Hitt et al. 2006:349,420,421; Robbins 2003:267; Northouse 2004:214; Ivancevich et al
• the technology needed for the performance of tasks and the management of activities;
. 2005:341):
• timely access to suitable information;
• sufficient staffing with the right skills and values;
• training for team members;
• recognition for achievements, rewards and encouragement;
• sufficient material resources; and
• leadership and clear direction.
Resources in a family business refer to the necessary inputs, such as: money, people, materials, and external information (Poutziouris et al. 2006:131). In addition, Van Auken and Werbel (2006:50) assert that spouses provide varying degrees of financial resources, time resources, or human capital to facilitate the success of their business.
3.4.14 GOVERNANCE
According to Rwigema and Venter (2004:501), the successful continuation of a family business is largely dependent on an understanding of the importance of a sound governance structure. A family business lacking in governance generally begins to experience problems when that business is passed to the second generation. Those businesses that survive this transition have a sound and acceptable governance structure. The simplest and most direct structure has two elements, namely:
governance of the business and governance within the family.
In essence, governance is a task of leadership and direction within an organisation;
suitable risk management and control over its performance; and the way in which its performance is released to shareholders and other stakeholders (Hough et al.
2008:173). In addition, governance is the means through which the values, principles, management policies and procedures of any business are visible to others. It refers to the complete system through which organisations are managed
and supervised, as well as encompassing those personal beliefs, values and ethics that constitute the organisational values, beliefs and ethics, and therefore the action of those individuals both inside and outside of the organisation.
According to Hough et al. (2008:173) business governance is essential to any business that wants to succeed in the local and global business environments. In broad terms, governance refers to the formal process of managing a business. This management process encompasses methods through which businesses express their interests, exercise their legal rights, meet their obligations and reconcile their differences (Hough et al. 2008:173).
According to Hough et al
• Increases the value of a business;
. (2008:175), there are several benefits of business governance, namely that it:
• Fosters a spirit of enterprise;
• Gives confidence to the market;
• Enhances the reputation of a business;
• Improves efficiency;
• Encourages innovation;
• Improves competitive advantages; and
• Meets financial, legal and statutory obligations.
Business governance is important for several reasons. Firstly, it influences individual’s attitudes toward business, responsibilities, leadership, honesty and integrity. Having good governance in place in a business will help to ensure that there is sensitivity to the needs of society, transparency in the business and will assist in instituting principles that inspire a good code of conduct that is founded on ethical and equitable values. If this is achieved, it will add to the success of a business by making leaders conscious of sound decision-making in the best interests of the business, its shareholders and stakeholders (Hough et al. 2008:174).
The simplest and most common family governance structure is the family meeting (Rwigema & Venter 2004:501). Poza, Alfred and Maheshwari (1997) assert that
family meetings, councils, retreats and assemblies are systematic communication forums, vital to a positive family culture, as well as facilitating reinvestment in interpersonal trust as the family and business grows.
Maas and Diederichs (2007:85) recommend family business meetings as a means of ensuring good business communication, particularly when dealing with new ventures or problems. A properly managed family business meeting will facilitate businesslike discussions and decision-making, as well as ensuring the effective implementation of any business decisions made in that meeting (Maas & Diederichs 2007:87). These business meetings should always be official and scheduled, and organised within a strategic and operational outline that has been agreed upon by management. Family members should hold business meetings when making significant business decisions and these meetings should not be cancelled, nor should members be absent because “they are too busy” (Maas & Diederichs 2007:86).
Evidence shows (Newton 2002:69) that although numerous authors recommend the holding of formal business meetings in family businesses (Maas & Diederichs 2007:86), many copreneurs undertake rather informal decision-making and discussions. For example, Newton (2002:69) found that copreneurs tend to have regular formal discussions while in the process of establishing the business, but that these formal discussions eventually disappear once they became more involved in the business.
Family governance has been referred to as a set of institutions and mechanisms that direct the relationships in families and between the family and the business. These institutions provide a means for establishing and communicating group norms, as well as establishing rules to govern the behaviour of family members with regards to the family business (Poutziouris et al. 2006:129).
Family members can determine what is important to them as a family and as individuals through the process of establishing clear policies and procedures. Clear policies permit the incorporation of family values into the business, and assist in building trust in the family business system, for individuals working both within and outside of the business. These agreements can also play an important part in
communicating the family’s wishes to keep the business in the family, while simultaneously highlighting a commitment to meritocracy and not nepotism (Sundaramurthy 2008:96). Additional opportunities for building trust in the family business system exist in the form of clear compensation and performance evaluation policies. Clearly specifying and consistently applying guidelines for performance evaluation and compensation can assist in eliminating role uncertainty and build confidence in the family business. These policies can also assist the family business in managing the prospects of future generations, employees and external stakeholders (Sundaramurthy 2008:96). According to Van Auken and Werbel (2006:50), a spouse becomes a significant stakeholder in a family business owing to the economic bonds of marriage. In addition, Tischler (2005) advises that copreneurs should establish guidelines for professional behaviour in their business.
3.5 SUMMARY
One of the most significant requirements for a successful copreneurship is that the spouses work together as a team. Therefore teamwork and collaboration are vital to the success of a copreneurial business. Irrespective of their unique nature, copreneurial teams are essentially identical to any other teams in an organisational context. Consequently, the organisational concepts applicable to effective teams are as relevant to copreneurial teams as they are to other types of teams. A discussion of the various factors influencing the success of copreneurial teams has formed the foundation for this chapter.
To begin with, the nature and value of teams in the business environment was discussed. This discussion also included a brief description of the stages of team development. It was established that entrepreneurial teams comprise a group of individuals who are involved in the establishment and management of new ventures, and are therefore vital to the growth of new ventures. Consequently, it is essential for businesses to establish effective team structures that will permit active and energetic problem-solving, as well as generating creative strength and new ideas from its members. Whether in business or in personal life, being a member of a successful team is a satisfying and beneficial experience.
After careful consideration of the existing literature on effective teams, the different models proposed and the factors identified by Farrington (2009), it was clear that successful teams have confirmed their ability with regard to two types of factors:
firstly, relationship-based factors focusing on the person-to-person and inter-group teamwork dynamics or processes between team members, and secondly, organisational-based factors relating to the team’s ability to achieve what it has been designed to do, by having a supportive context and a suitable composition and structure. The specific relational-based factors that influence the interaction between copreneurs are Spousal relationship, Respect and trust, Fairness, Open communication, Balance between work and family, Family harmony, Commitment to the business and Non-family involvement. The organisational-based factors include:
Shared dream, Leadership and planning, Complementary skills, Division of labour, Internal context and Governance. These relational- and organisational-based factors mirror the essential attributes and requirements for effective copreneurial teams and partnerships.
Chapter 4 will endeavour to merge the various relational-based and organisational-based factors into a comprehensive conceptual model, which portrays the conditions required for the effective functioning of copreneurial teams.
CHAPTER 4
A CONCEPTUAL MODEL OF FACTORS THAT INFLUENCE THE SUCCESS OF