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How to Stop a Fight



This has happened to you.
You’re standing in a crowded room. Someone pushes into you from behind. You feel a surge of irritation, even anger. Who is this careless oaf who can’t respect your personal space? You turn around to express your indignation, only to discover that the offending party is actually a good friend of yours who has bumped into you accidentally or, perhaps, even on purpose and is not smiling at you as you find yourself on the receiving end of a good-natured prank.
Your anger evaporates in an instant.
But why? The bump was no less of a bump on account of the person who bumped you. But the bump was never the issue at all. What was at issue was your ego, resenting the perpetrator who failed to show you respect.
It’s almost always ego that is the real perpetrator in any fight. Change one little detail and our irritation or anger vanishes. But when we feel our ego has been affronted, heaven help the offending party.

Bottom of Form
A folktale
A man woke up one Sunday morning convinced that it was Monday. No one could tell him otherwise, and all the evidence his family and coworkers rallied made no impression upon him whatsoever. On Monday he asserted it was Tuesday, and on Wednesday he insisted it was Thursday. He refused to entertain the notion that he might be wrong and that everyone else might be right.
On Thursday afternoon, the man’s wife made a frantic visit to her rabbi. During the week, her husband’s delusions were benign, if somewhat irksome. But what would happen that evening when her husband insisted that the Sabbath arrived at sundown? And, even worse, how could she prevent her husband from desecrating the Sabbath the following day, when he would be convinced the holy day was over?
The rabbi pondered the question for a time, then leaned forward and told the woman what she should do.
The woman returned home to find her husband issuing orders in preparation for the onset of the Sabbath. To the surprise of her family, she echoed her husband’s instructions and began preparing the Sabbath meal.


L’chaim!
That evening, the husband returned home from synagogue – apparently unimpressed that the rest of the community had not observed the traditional Friday night Sabbath services. There he found his entire family dressed in their finery and waiting for him in their respective places at the dining table. Pleased to discover that they had finally come around to seeing things his way, he raised his cup to recite kiddush, the ritual prayer for welcoming the Sabbath day.
However, the husband did not notice that his wife had filled his cup with schnapps in place of the usual light kiddush wine. When he finished reciting the blessing, he swallowed the entire cup in his usual fashion and, overtaken by the potency of the drink, collapsed face down upon the table and passed out.
For the next 24 hours, the family tiptoed around the house so not to wake the man. When Friday evening arrived, they returned to their places. The wife then gently shook her husband and, as he roused himself from his slumber, she said, “You must have been exhausted; you fell asleep before you had a chance to make kiddush! But the children are hungry, and you can sleep later. Come now, it’s time for us to begin the meal.”
The husband looked around the table and, after a moment’s confusion, picked up his cup (which now was filled with wine) and recited the inaugural Sabbath blessing. From that day forward, he often recounted how the entire community had miscalculated the day of the week and bragged about how everyone had eventually accepted that he was right.

Five ways to prevent escalation
Sleep on it. If I’m too tired to cope, I’m also too tired to fight. Agree to take up the matter the next day. Chances are it won’t seem so important then.
Take responsibility. As a rule, every argument has two sides. Even if you’re right, you may simultaneously be wrong. Admitting that you share the blame makes it easier for the other to also admit error and scale down, rather than ramping up.
Bury the past. Don’t start bringing up ancient history (anything older than a week). Once you go off the edge of the map, there be dragons.
Just the facts, ma’am. Don’t try to mind read, and don’t expect others to read your mind. If you haven’t been clear, it’s your own fault that those around you are wallowing in confusion.
Take ownership. I know, it sounds all touchy-feely. But saying, “That makes me feel bad,” is a lot less confrontational than “you hurt my feelings.”
Give peace a chance
“Wisdom is greater than war craft,” says King Solomon in Ecclesiastes, describing how adept psychological or political maneuvering can achieve more enduring results than brute force, precisely because the mechanisms of wisdom often go undetected and therefore give rise to neither alarm nor opposition.
Certainly, the wife could have continued to battle her husband, achieving nothing except a spiraling level of frustration and acrimony in the home. Her ability to “let him win” benefited the entire family, herself included. And although she might have resented his smugness at believing that he had convinced the others that he was right, she might find even greater pleasure in restoring peace to her home without the need to receive credit for “being right.”
It’s the principle! we like to say. But how far does principle get us when our relationships become frayed around the edges? We’re all human beings, with human shortcomings and moments of irrationality. Is it so bad to let one another just be human?
Stress, exhaustion, money, children and, most of all, ego. These are just a few of the most common reasons why little problems explode into big problems. By recognizing the contributing factors, it becomes easier to defuse fights before they happen.

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The Psychology of Family

On the need to study family structures and family interactions in the Psychology of Family

The psychology of family examines how and why we have families and close relationships as also the dynamics of family interactions. The structure of families is based on evolutionary biology, anthropology, history and sociology and the roots of family systems are found within these disciplines. However studying family structure will show us how family systems have evolved over time but may not directly tell us why family relationships develop in the first place. Family relationships are in turn studied with psychology, child development and philosophy and suggest why family forms the basis of our existence. The interdisciplinary approach to the study of family will have psychology at its core as human evolutionary biology, sociology, philosophy have significant psychological components.

To begin an answer to the questions on how family structures have developed, early evolutionary history and anthropology will suggest that family, albeit in a different form is the basis of human civilization. The earliest men who lived in caves and forests, quickly formed groups or tribes to protect themselves from wild animals. Research into anthropological remains has shown the life of primitive humans who were cave dwellers. Forming herds was one of the basic security and safety needs of humans as by forming a large family they could attack or defend themselves against wild animals, warn each other of natural disasters, gather food and raise children in a community, almost like modern day societies. Thus the earliest families were tribes or herds and there were several generations of humans in one family. Family sizes were thus presumably large with entire forest tribes forming single families. However this tribal system of forming large communities possibly did not last long and some humans wanted a different kind of life and migrated to places where there were no communities or tribes. Some others may have simply weighed the disadvantages of a group life as insurmountable and reasons could be possible jealousy regarding mates, dissatisfaction in sharing food, shelter and apathy for the rules of a community life. The freedom seekers moved out of this community pattern and groups became smaller and humans started building their own homes and the first human civilization was thus laid with many smaller families, although large when compared with contemporary nuclear families of a couple and their children. The basic human need of safety and security gave way to the fulfillment of more emotional needs of love and sharing through family systems and humans developed attachment and affection as these were constantly reinforced with rewards of love, love making or promise of love.

Humans as we know were born with some basic drives of sex and aggression, as suggested by Freud but humans found that they could fulfill their sexual needs only when they also showed attachment and affection as attachment and affection were often rewarded with sex and through sex, their aggressive needs were also fulfilled to an extent. That is how humans developed attachment and affection and these positive emotions have been constantly rewarded and thus have been reinforced over time to the point that love in a civilized society has been glorified and sex has been degraded. Of course, psychoanalysis would suggest that love is just a sugar coating on our real primal sexual needs, the fact remains that humans have constantly found that indirect love needs are more readily rewarded than direct sexual needs and thus developed these positive emotions of love and attachment as the basis of family structures. Experiments by psychologist B. F. Skinner successfully showed that behaviors are reinforced when rewarded. Family systems are built on the foundation of love, attachment, loyalty, trust, which in turn fulfills safety and status needs and thus psychology is an important ingredient in family interactions.

The Psychology of Family could be divided into two branches -

The Psychology of Family Structures:

The psychology of family could possibly branch out to two directions on understanding how and why family structures have evolved in a specific way. Why did the earliest humans form tribes or groups and why did they suddenly abandon the nomadic life to begin farming and settled in homes? How did communities form and why were social rules made that helped to protect the family system? Why did the family size diminish over time? What needs were fulfilled with the changing family patterns? This branch of the psychology of family studies social systems, political systems, civilizations and history and evolutionary biology and anthropology. This is the structure of the family, the basic family systems and the psychological basis of the evolution of family. Here the basic social psychology of group behavior and group formation highlights the reasons of forming groups through cooperation (with other members) and identification (with the group) as found in earliest humans and continues to this day. Kurt Levin, Bruce Stickman and Gustav Le Bon are noted group behavior theorists in social psychology and studied group behavior as the basis of social development. Family formation could be explained with Maslow's hierarchy of needs as family provides the basic safety and security as well as love needs and in some cases also fulfills our status needs. I have discussed Maslow at length in another essay. The basic drives of sex and aggression being fulfilled through love and attachment as we get in families would be a Freudian explanation of family systems. Existentialism by Sartre who claimed that man is thrown alone in this world with an inherent sense of isolation could explain the need to overcome this loneliness. Group structure and group interaction are both explained with these varied theories.

The Psychology of Family Interactions/Relationships

The second branch would however be about the family relationships, the basic psychological and emotional nuances of family members, their interactions and interrelationships, the emotions of love and trust and the functions or role of family in an individual's life. This branch would emphasize on family relationships and the psychological basis of emotional interaction in the family and how this relates to the outer world. This branch also studies how our family patterns and relationships closely affects our interactions in the outside world and how we behave in the community, society and the world. This branch of psychology is also related closely to issues of existentialism and phenomenology in philosophy as with the family, man does not feel completely lonely or isolated in the world as existentialism would claim but rather develop a sense of belonging ness and through family humans first relate to the outside world. The family is thus the stepping stone, the first stage on which we begin our learning about the world. This is also an important part of child development studies. In addition to the theories of Freud, Maslow, Levin and Sartre, the theories of Erik Erikson in which the stages of man from birth to death show why humans form relationships, could well explain the dynamics of family interactions and relationships. Erikson has also been elaborated in another essay, but briefly in Erikson's theory humans go through eight stages in psychosocial development from hope and trust in infancy to integrity or despair in old age.

On the one hand we study changing family patterns and in some cases comparisons are drawn within cultural studies as families in different cultures could have different patterns and structures. For example large families are still prevalent in Eastern societies although this is becoming almost extinct in western more individualistic societies. With marriage rates falling drastically and people preferring to remain single, the study of the family structure and its gradual change could help us analyze and predict future patterns in family as well. Will the family system become slowly extinct with individualistic societies showing a decline in the number of members within a family? It could be predicted that a hundred years from now, individualistic single member families would become a norm worldwide and this could further lead to isolation, loneliness and a need to emotionally connect that would see humans forming large groups or herds or close communities once again. These will however be the ultra urban, technologically superior tribes, possibly space traveling nomads, like we see herds or groups of aliens in movies related to alien culture and UFOs. Aliens who are considered superior to us and possibly reside in UFOs are always shown or seen in groups or herds as you will notice. Ever wondered why the aliens are always in groups or herds? Possibly they have passed through all the evolutionary stages of humans and thus are more evolved than us. The future is possibly a return to the past, to formation of tribes, groups, herds and communities, rather than small families. I don't claim to believe in UFOs and aliens but this is possible and is based on speculation but the evolution of the structure of family systems would also depend on how our emotional needs for interactions and relationships change or evolve.

Apart from the theories of Maslow (safety/love needs), Freud (basic drives), Existentialism (loneliness) Levin (Group formation) that could be related to the need for family structures, the psychology of family will have to gauger human emotions in different family situations and this would be about child and adult development considering theories of Erikson (life stages), Freud (on sexuality) and the reinforcement of positive emotions

Reflections in Psychology - Part I - by Saber Roy (2009) Copyright: Saber Roy (2007/2009) http://www.lulu.com/content/5865445

Reflections in Psychology - Part II by Saber Roy (2010) Copyright: Saber Roy (2010 -) [http://www.saberiroy.com]

Article Source: http://EzineArticles.com/?expert=Saber_Roy

Article Source: http://EzineArticles.com/5493921

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How To Select Toys for Children

Firstly, safety is the most important sector. When you buy a toy, you must notice the security log, playing method, suitable ages and warning words on the toy box. And also need to notice the volume size and sharp corners. especially the toys for infants and young children. You must pay more attention. Because children is ignorant of the safety. If parents have no knowledge about this, it is easy to have an accident.

Secondly, toys must be suitable for children ages. Cautions on the labels indicate that the toy is suitable for which age group. For example, if the label indicates that the toy is suitable for the children who is more than 3 years old. So do not buy it for the children who is under 3 years old. Toys must be suitable for children€™s age. One reason is safety. Another is about intelligence development. Otherwise, toys can not bring joy to children, but make them feel troubled.

Third, toys must be interesting and educational. Toys must be attractive and interesting. So children can be 100 percent devoted. Or children will be half-hearted. After the passion, they will put it aside. If the toy is interesting, children can get great fun from it. It is also good for their physical and mental development. Besides interesting, it must be instructive. It means that the function of toys is helpful for their cognition, emotion and social skills.

Fourthly, toys must be resistant to play. Many parents think that children will feel bored after playing the them for the first time, so toys can not be resistant. But in fact, the good toy must be resistant. Kids won't be easy to lose interest. This can avoid unnecessary waste, but can also foster children€™s good moral character to cherish things.

Fifth, toys are regardless of gender. In general parents€™ opinion, boys and girls will have different ones. For example, boys should have model and toy bus, girls should have plush toys. Actually, there is no strict rule for this. It just need to be suitable for their interesting.

Finally, toys must be personal. Some toys such as RC bus and teeth plastic toys, they are used for embrace and playing a bite. Consider the sector of health. These toys would be better for personal. It is not suitable to play with others. So children will have more kindness for the toys. It also can help them to affirm themselves and feel valued.

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The Benefits Of Jigsaw Puzzle Toys For Children

The toys for children belongs to the children whose intelligence is in puberty. They are mostly simple, interesting and full of creativity. This situation has changed because Jigsaw puzzle toys are very popular. The jigsaw puzzle toy is also controversial. Some people think that jigsaw puzzle is good for developing children€™s intelligence. Also some people think that it purely increases the burden of parents. No matter how, the jigsaw puzzle pop up at a rapid speed. The fact has already indicated that jigsaw puzzle has a benefit for children.

Every new start of shopping season, families with children would buy a large number of toys. The number of toys are increasing dramatically. There are many reasons for the mass production of jigsaw puzzle. Firstly, there are enough space to show toys on shelves of the retailers. Modern crafts have already made the package of toys smaller. Secondly, toys are almost components and parts when we buy them. Buyers need to assemble them personally. Parents are very dissatisfied. They are all depressed because of the additional task. Herman, a toy manufacturer, agrees with this opinion. But, she also thinks that this kind of package for toys can reduce the cost of transportation. It reduces the price indirectly. To families, it is a good thing. Indeed, consumers can buy cheaper toys. But when they open the box and see all the components, they heave a sigh when begin to assemble them.

Now the very popular combat robots are back again. There is no need to assemble for previous versions. Now it is not only need to assemble, but he size is smaller. One reason is that producers and retailers pursuit the max profit. In fact, jigsaw puzzle becomes more and more popular now. The important reason is that it can help children to develop operational ability. For people, the process of assembling is also a fun of playing. They DNA€™t use the new image for many toys like these. They use the famous movie theme on the premise of permission. Such as Star Wars, Transformers. This can make it more popular. It is also make it more difficult to assemble. When children can not assemble successfully. Parents have to help them.

The experts in American toy industry said that the sales of it increased dramatically last year. The investigation report of toy market has shown that the sales growth of jigsaw puzzle is more than other toys.

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Continuation and Succession Planning Considerations in a Family Enterprise

What makes a family business unique, and quite often is the key to its Competitive Edge is its close family connections, experience and expertise. In order to sustain this unique edge, a family business needs to plan early, carefully and thoroughly so successors can be developed and groomed from the family ranks.

Common Succession Issues

- Treating all family children fairly

- Reactions from non-family employees

- Family communications and conflict

- Estate Taxes

- Executive and Management level organization and structure

- Determine how best to select successors:

-- Groom one child from an early age to take over?

-- Allow family members to compete and choose replacements and successors with the aid of the Board of Directors and/ or the Family Council?

-- Choose successors without the aid of a third party?

-- Form an Executive Committee of family members (3-members)?

-- Allow the children and/ or family as a whole to choose incoming leaders?

How to go about choosing future leaders and successors really is a factor of a particular family business's history, current structure, planning, success, future growth forecasts, available resources (human, technical, strategic and financial), aspirations, goals, wishes and a host of contingent variables. The complexity of succession issues really dictates the use of an experienced Business Consultant, Attorney and Accountant to help develop and implement a successful Continuation Plan. The Business Consultant should be the quarterback of the planning process: he or she should coordinate the inputs of the current leadership, Board of Directors, Family Council, key non-family employee, legal, human resources and accounting; along with the Consultant's experienced advice, to come up with an acceptable, flexible, successful Business Succession Plan.

A Business Consultant can be a great investment when replacement choices are limited. If faced with this challenge, a family business needs to utilize professional help to:

- Analyze present key position assignments, responsibilities and performance to determine current capabilities and weaknesses, as well as, future succession management and leadership gaps.

- Take a Close look at the current company structure and determine if the structure needs to be modified to meet future human resource challenges.

- Do present family members need cross-training, leadership education and mentoring? Or are there key non-family employees who can fill future leadership gaps?

In order to find a solution to a leadership and management future gap threat, it is important to have sound, objective, experienced third-party professional advice and expertise at hand. Moreover, all present managers and key people, family and non-family, should be included in the decision making and planning process when replacement choices present an inherent challenge.

Business Continuation and Succession Planning

In a family enterprise, succession occurs when the family business owner/ leader/ founder passes away, becomes incapacitated, exits the company or retires. You can never start too early in planning replacements; along with succession and continuation contingency planning. Having explained the various areas and issues to consider when planning for future Company leadership and management, we will now examine the importance of Operating Authority Planning; how this authority will pass from one generation to the next when planned for, as well as, putting in place emergency, contingency authority planning when the family business's leader and/ or top management suddenly departs.

- Sudden Departure Planning: Sudden death or incapacity in a business's upper leadership echelon can be paralyzing if not properly planned for. It is very important to consult an experienced Certified Financial Planner, Estate Planning Attorney and Business Accountant to ensure a Business Continuation Financial Plan is in place, which sets up the necessary wills, trusts, insurances, investments and other vehicles to ensure the business can have a successful financial transition. This is often accomplished with Key Person Life Insurance and Disability Insurance. It is very important these advisors work in concert with the Company's Business Consultant, Financial Consultant and Business Attorney so that the Business Succession and Continuation Plan link both Management & Leadership Planning with the Operational Authority Planning.

- Planned Departure Planning: As previously discussed, there should be a Leadership and Management Continuation Plan in place. This ensures a smooth transition and can be overseen by the Company's Board of Directors. This Departure Plan will kick in automatically with the Operational Authority Plan if a sudden, unplanned Leadership Departure occurs. The Continuation and Succession Strategy should be implemented in stages so the existing Company leader can ensure a smooth transition. Having finances in place to take care of any dips in sales and profits during this transition is key and should be part of the plan.
It is important that the outgoing Company leader can retire comfortably and has a retirement life plan in place. When it is time to go, according to the plan, the family Company leader must cleanly go and not hold on. It is time for the next generation to move the Company forward. A Certified Financial Planner and Compensation Structure Expert should be consulted to determine the best way to set up a successful Retirement Plan for outgoing family members- their retirement comfort is key toward continuing a clean break from the business.

- Selling Stock to Family Members: A successful transition is only complete when the outgoing business leader/ owner sells his stake in the business to the remaining family members as per the Operating Authority Plan. The advantages of this type of transition are numerous:

-- Business remains in the family.

-- Business continues to provide a source of steady employment to family members.

-- The family's status and stature are preserved.

-- The former owner/ leader is freed up to actually retire and travel.

-- A successful successor(s) instills confidence and happiness throughout the family.

-- Strengthens family bonds rather than causing additional friction and conflict.

-- Future success rewards the family very well financially.

- Selling the Business Option: After several generations, sometimes family contracts or its members choose alternative careers and businesses. It is better to sell a successful venture than one withering and dying on the vine. This option should be included in the Operational Plan and be well thought out, utilizing the expertise of a Business Consultant, Registered Investment Advisor, Valuation Expert, Business Broker, Attorney and Accountant. If planned for properly, a business sale can be a great thing for a multi-generational family. The proceeds and resulting investments can secure future education funds, new business ventures, philanthropic organizations and other generational family interests and passions.

-- Some things to consider when selling the family business:

- The business owner/ leader ought to plan a transition period into the business sale process. An immediate retirement can reduce a Company's attractiveness to a buyer as having the founder/ leader/ owner around during the transition is often preferable.

- Utilized Valuation Experts and Accountants to evaluate assets, project profitability and determine good will mark up, among other value determinants. A prestigious accounting firm conducting a full audit and investigator go a long way in deriving a premium sales value which is acceptable to the buyer.

- Building up profits, retaining earnings and instituting cash flow management strategies can go a long way to attracting good buyers.

- Structuring the deal with the family retaining a small, passive stake in the business can be very attractive to a buyer as it instills confidence in the new leader and management, while giving the family the opportunity to profit from the Company. This can also make a premium price structure more palatable to a buyer.

- Shift assets to heirs to lower your basis in the business, thereby, decreasing and spreading out the tax load.

- Ensure financial records are up to date and audited with projections tending to air on the conservative side, while having realistic marketing outlooks and inherent assumptions.

- Need to understand what you and your family members will lose from the sale and plan accordingly with your financial advisors. Things to consider:

Pension/ Retirement Investment Plan
Stock Plan
Health, Life, Disability & Long-Term Care
Company cars
Club dues
Perks & Benefits

-- Tax implications can be substantial in a business sale so utilize a good tax planning firm, along with garnering advice from your Certified Financial Planner.

Tax and Estate Planning Implications

One of the biggest threats to the successful continuation and succession of family businesses are the constantly changing tax laws. Utilizing an experienced Estate Planning Attorney, Tax Attorney and Business Attorney, along with a solid Business Accounting Firm, to ensure you not only maximize present profits while minimizing your tax liability, but also successfully plan to pass your estate and business onto heirs in the most tax preference way. Some Estate Planning considerations to keep in mind while planning for business continuation and succession:

- Major concerns typically are the perpetuation of the business and maintaining liquidity. Without sufficient cash to pay estate taxes, heirs have little choice but to drain cash from the business when it most needs it or worse, be forced to sell it or sell many of its prized assets.

- Good Estate Planning can:

-- Reduce the need for beneficiaries to remove funds from the business.

-- Maintain beneficiaries' interest stakes by keeping funds in the Company.

-- Provide a smooth transition when developed in conjunction with the Management/ Leadership Strategic & Succession Plan and the Company's Operating Authority Plan (see previous sections for more details).

-- Selling the patriarch's / matriarch's stake in the business, in advance of any Succession Plan implementation (whether a planned or sudden departure) to family members can be the best estate planning a family business can employ, while giving the business leader control of the Company until the agreed upon relinquishment.

-- There are a host of structural tools which can be used to minimize estate tax liability, that should be fully explored with your Financial Advisory Team, such as:

Gifting
Stock Sales
Trusts
Limited Liability Corporations
Family Limited Partnerships
Share holder Buy/ Sell Agreements

- Critically Important: Establishing a valuation of the business which is in compliance with IRS regulations is critically important. Overvaluing, as well as, undervaluing a business for tax purposes can both be highly expensive mistakes. This is why having an excellent Tax & Financial Team of Advisors in place is absolutely essential.

Conclusion

Not everything can be planned for, but if you adopt the strategies prescribed in this article, which are commonly unique to a family enterprise, running and managing the successful family business is significantly improved, while ensuring successful next generation business continuation and succession. Family Businesses have a unique set of Competitive Advantages, which if planned for, can be used to exploit new markets and ensure future profitability and success. In the end, if you, the family business owner / founder / leader successfully plan, build and manage the family enterprise, you will need to give up control and ultimately ownership in your cherished accomplishment. If built well, the family business will continue to reflect the leader's / founder's ambition, innovation, initiative, entrepreneurship, character, values, integrity, ethics; all those things in testament to hard work and perseverance. This is the legacy of the business, clearing the way for future generations.

Frank Godley is a business consultant, business turnaround consultant and business coach for ABC Business Consulting. He is an expert in developing, writing and implementing business plans, business funding plans, marketing plans, strategic plans and business turnaround plans. He also offers complete solution business consulting, business turnaround consulting, and web SEO, marketing and development consulting. Frank is author of a business plan book, The Comprehensive Business Plan Workbook - A Step by Step Guide to Effective Business Planning, and he writes the Business Success Strategies Blog.

Article Source: http://EzineArticles.com/?expert=Frank_Godley

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Tough Economic Times Put Family Businesses to the Test

Recently, a good friend confided in me that she's been waking up in the middle of the night worried about the economy and its effect on her family and business. She's not alone. Business-owning families across the country are concerned about the impact of oil prices and the impending economic slowdown. For many, the demands and tensions of tough economic times highlight even more clearly the need for trust and open communication between family members. These demands and tensions also emphasize the need for economic discipline, clear policies, and well-established systems of family and business governance.

Over the last 15 years of economic prosperity, the financial success of many family businesses has spawned a number of bad habits. A recent meeting I had with a client led to a discussion of the economic outlook in his industry-rising fuel costs together with a more competitive landscape have led to a shrinking bottom line. The natural tendency in tough economic times is to cut costs and consider letting some employees go. Upon further discussion with my client, it became clear that the family members around the table in management positions were reacting to the pressures without a clear understanding of the true cause of their financial troubles or the likely financial impact of their decisions.

I asked the founder of the business how he ran the business seven years ago, when it was growing rapidly. As expected, I heard that there were regular weekly meetings that included a review of the financials and in-depth analysis of revenue and cost trends, and a comparison to a budget. My client admitted that as the business grew and profitability exploded, the budget process became less disciplined. Weekly meetings became monthly meetings and then disappeared altogether. Further discussion also revealed that family tensions were ignored as the business grew and bank accounts expanded.

Suppression of family conflict did not resolve it, but only made it more deep seated. This lack of financial discipline combined with increasing tension in the family and a shrinking bottom line were leading to real challenge. Beyond economic discipline, families must have the discipline to stick to their policies and succession plans. Families can avoid creating additional tension at an already challenging time by enforcing discipline in all areas of family business planning.

Family Business System Managing the intersection of the three systems present in family business-family, business, and ownership-is a key to family business success. Tough economic times create stress across the system. Business performance may suffer and tough decisions need to be made. Family business conflicts, which are easy to ignore when the return from the business is good, rise to the surface during an economic downturn. Family members not in the business may blame those who are for not addressing financial problems sooner. Owners have to deal with the possibility of cutting back on distributions or possibly even selling the business. The conflicting goals, which are often present in the three systems, are best managed by policies and processes that ensure all concerns are addressed and brought into alignment.

The tendency is to ignore policies and processes when times get tough. However, a sound family business infrastructure is even more crucial in tough economic times. Families have a dividend policy stating that dividends will only be paid when they do not threaten the viability of the business. In tough economic times, dividends may need to be suspended. During an economic downturn, the test will be whether or not family members follow the policy.

Enforcement of a family employment policy is another example. Breaking the policies that you have in place is not good for the business or the family. There does need to be some flexibility in policies and processes to address unforeseen challenges. However, families must consider the long-term implications of breaking rules they originally made in the best interest of the business and family. To weather an economic downturn, families must build a strong infrastructure and stick to it.

Four Tips for Addressing a Downturn 1. Build or return to sound business management practices. Tracking and enforcing responsibility for financial results is important in good economic times, but it is essential in a downturn. Creating a realistic budget to ensure that revenues will cover costs is also imperative. This exercise should consider what areas can be cut back if revenues shrink substantially. Once the budget is complete, create a process for tracking performance against the budget so that any changes in the environment faced by the business are identified quickly. Developing solutions in areas that are not tracking against the budget and then holding management accountable for delivering results (or alternative solutions if budget expectations are no longer realistic) are a natural outgrowth of the process. Last but not least, it is critical in uncertain times to hold regular management meetings where the team can discuss changes in the business environment and also develop plans to address them.

2. Be prepared for lower distributions. A business that has prospered over the years and has always paid generous distributions or dividends to its shareholders may find it difficult to meet these payouts during today's challenging economic times. A family shareholder group that has taken the time and effort to learn about their business and the factors that make their dividends possible will be in a much better position to anticipate and adapt to changes in their dividends than a shareholder group that has just accepted their dividend checks without any effort to understand what lies behind them.

3. Stick to your employment policy. Many families require members of the next generation to work outside of the business for several years before the next generation can work in the family business. However, when the economy slows and a well-paying, desirable job is tough to find, the family may be tempted to ignore its employment policy and hire young family members right out of college. The family may ask, "What good is having a business if we can't help the kids during tough times?" A valid question-but perhaps the members of the family would be wise to remember why they created the policy requirement in the first place. Most family members are able to make more significant and enduring contributions to their business after having a chance to learn in other work settings. Just because it's very difficult to find work, is that requirement no longer relevant? Rather than simply ignoring the established policy, a family must seek ways to help young, inexperienced family members without abandoning its stated policy. There are many ways to accomplish this, and each family will find its own way. For example, the family business can help family members with resume development, interview preparation, or even introductions to possible employers.

4. Honor the succession plan. A father or grandfather who has turned management of the business over to members of the next generation is often tempted to jump back into action during tough times. The family may welcome and encourage their involvement because of Dad's or Grandpa's history of success under pressure. Will the family allow the current leadership to lead or will there be too much fear for the family to place its trust in the next generation's leaders? An "either/or" solution is not the answer. Finding a way to access the wisdom of the senior generation without cutting off the junior generation at its knees will be imperative. Combining the wisdom of the past with the talents of the present will be the key to success in these tough times. A family's response to these economic times could be seen as a test of will and commitment. A family shareholder group that has worked hard to establish policies and governance systems will certainly be led to question the wisdom of those policies, which were likely created during times of peace, calm, and even prosperity. Will the family stick with its policies, even if individual or collective suffering results in the short term? What will take precedence-the needs of the business, or the needs of the brother who requires his dividends for a mortgage payment or the sister whose daughter needs a job? All systems will begin to fray or fracture at their weakest point, when the going gets rough and pressure starts to build. A family system is no different. Many family businesses are seeing and feeling more than a few cracks starting to emerge in response to today's increased economic pressure. By returning to the tried and true-strong governance, agreed-upon policies, family education-families can use the challenges of these tough times to become even stronger and more unified.

This article is designed to provide general information and is not intended to provide specific legal, accounting, tax or other professional advice. Since your individual situation may present special circumstances or complexities not addressed in this article and laws and regulations may change, you should consult your professional advisors for assistance with respect to any matter discussed in this article. Family Business Consulting Group®, its editors and contributors shall have no responsibility for any actions or inaction made in reliance upon information contained in this article. Articles are based on experience on real family businesses. However, names and other identifying characteristics may be changed to protect privacy.

A senior associate of The Family Business Consulting Group, Dr. Green is the former director of the Austin Family Business Program, and was founding Director of the Austin Entrepreneurship Program, at the College of Business at Oregon State University.

Mark is an active educator, speaker, researcher and advisor on succession, family business governance, entrepreneurship and professionalization of the family business. He consults, speaks and leads academic courses, executive education programs, workshops and seminars for family businesses and the professionals that serve family enterprises. He is regularly quoted by the news media such as the Wall Street Journal, The Oregon, and The Denver Post regarding family business issues. He was co-founder of the Family Enterprise Research Conference with Plasmodia Sharma that was hosted in Portland, Oregon in 2005 and served as chair of the Educator and Research Conference for Family Firm Institute in 2005.

Mark graduated from Cal Poly Pomona (B.S. Business Administration), the Atkinson Graduate School of Management at Willamette University (MBA) and the Claremont Graduate School (M.A. Political Economy and Ph.D. Economics & Political Science). Mark comes from a family business and learned firsthand the challenges and pitfalls of running a family business, including the critical importance of issues such as succession planning, strategic planning and healthy family business relations.

Article Source: http://EzineArticles.com/?expert=Mark_T._Green,_Ph.D.

Article Source: http://EzineArticles.com/3131761

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