Management Issues For The Family-Run Business Essay

            Rouse super market was a family run business that was located in south East Louisiana.  The business started almost 50 years ago and was owned by a man known as Anthony rouse Rouse Sir and his cousin Ciro SiMarco. It was the largest retail grocery   in the city of southern Louisiana .In 1975 Mr. Anthony Rouse left the management of the business to his cousin Ciro Dimarco and his two sons Tommy Rouse and Anthony Rouse,  although Mr. Anthony resigned from the business he still monitored  whether his sons were conducting the business as was expected of them.

            The Rouse supermarket was an independent private held company where the owners handled the day to day operations of the business by themselves such that they  controlled its stores and its operations.  It was not controlled by the stockholders or board of directors thus the Mr. Rouse, his cousin and his two sons were its directors thus they made decisions for as to how to run the operations of the business.

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            Since the time the company was started it had grown tremendously because it had stores that was 7000 square foot which cost $20,000 to build but as of  now it has stores whose volume is 15,000-17,000 square feet in size and cost the company $10 million to $12 million to build meaning that the capital of the company has grown and its sales volume has also increased.

            Rouse supermarket had its headquarters in the city of Thibodaux.  It had opened several grocery stores in Slidel and in the present time it has opened the 17 grocery stores in Layette. The company has other branches in Terrebonne Parish, Lafourche parish and one in St.Mary parish. The business consists of 2000 employees who run the family business and some of the employees are family members these includes Mr. Rouses wife, nieces, nephews children and in-laws hence this enables the operations of the business to be carried out efficiently since the employees usually commit their time and money to see to it the that the business succeeds in its operations..

            In order for the family business to carry out its activities effectively the management of the company resolved to build shopping centers along with the supermarkets in order to maintain  the customers in  the family business and also to increase the sales volume of the products it sold to its customers.  The shopping center had  restaurants and retail businesses built alongside it  as these would increase the returns of the business. The company also set strategies to enhance its operations by lowering the prices of the commodities than that of the other competing company’s and this increased its returns because the involvement of the family business in running the affairs lead to the success of the business  because they committed their time and effort.

The supermarket dealt with selling  wide variety of  products to the customers such as : foodstuffs of different kinds  ,customer’s household products such as household cleaning products, medicine ,clothes and other non-food products. It was a self service form of business where customers pick up products they desired at their own discretions.  The supermarket was controlled by other supermarkets within a town or other different geographical regions  in order to increase its opportunities for large  economies of scale that could increase the returns of the business since it delivered its services to all types of customers ,thus incase one market did not perform well than  the other business that are associated with it would  benefit from it .

            The  supermarket was controlled by a single family or other kinds of family  set ups.It was composed of three subsystems that is : people who were  employed in the business and the members of the family that would control the business.  These subsystems influenced the direction and the operations of the family business since they were involved in the preparing the strategies that  the business would follow in order to  enable it achieve its goals and objectives .

The supermarket was a decentralized organizational structure since it had various outlets in different towns that had  branches and units  such as TerrebonneParish,Lfourche Parish and St Mary Parish. that were located away from the head office. The advantages of having a decentralized organizational structure were that the senior managers concentrated on important decisions that were relevant to the business hence enabling it to  achieve its goals and objectives.  This type of organizational structure enables decision making to be made in an effective way since all employees are involved in decision making hence this makes them to be confident in their work and it also motivates them to work harder in their activities and it results to greater outputs for the business.  The decentralized  organizational structure of the supermarket  enabled the employees to understand their work and people that is their customers and colleagues.  The employees were in a better position  to identify the needs of the customers  thus communicated with the senior management about the products that were demanded by the customers so as to avoid overstocking of goods that were tying up cash yet they were not needed by the customers and this could result to greater returns for the supermarket business.

            In the supermarket there were  2000 employees  who had specialized in various fields of studies thus the business was divided into various departments such as the accounts, personnel, sales and purchasing departments which enabled the operations of the activities to be carried out effectively. The various departments for example coordinate with the finance or accounts departments so that they would obtain funds to operate the operations of the business efficiently. The finance or accounts departments gave funds to each department of the business based on its budget ,its expenses and the purposes of using the funds of the business.

There are three levels of personnel in a supermarket.  They are strategic, tactical and the operational levels of personnel in the organizational structure. The strategic level in the structure consists of the senior management who are the decision makers of the organization and they overseen the operations of the business.  In case of the tactical level of the business it consists  of people who are  known as the middle management of the business, they supervise and ensure that they decisions of the business  are properly implemented.

            The lower level personnel consists of the production workers.  They ensure that the day to day activities of the business are carried out effectively.  They are the ones in the supermarket who arrange products in the shelves of the supermarket, they label, put price tags of the products so as enable quick service delivery  to the customers since it’s a self service type of a business since customers go into it to pick up products that they desire and prefer to use or to consume.

            The  supermarket was usually headed by the of board of directors who were Mr Ruose,his cousin Ciro DiMarco and the two sons of Mr.Ruose who were the senior management of the business .Their  roles was to organize the activities of the business and to  distribute duties and responsibilities to the employees of the business.  The board of directors overall principles were to oversee the operations of the company were being conducted in an effective and efficient manner.  The board of directors organized annual general meetings for their business so as to determine how the business had performed over a certain financial year of a business and they  recommended new opportunities that the business needed to venture into in order to expand the operations of the business and also increase the returns of the business.  The family council and the family assembly of the supermarket business were involved in setting  the direction in which the business needs would follow in order to achieve its objectives and goals.  It also created policies and procedures to be followed within the business so as to enable the operations of the business to be undertaken in a cost effective and efficient manner.

            It had been reported that the involvement of family members in the businesses board would interfere with the operations of the business because they would give biased opinions of how to run  the business and this  can undermine the efforts of other members of the board who were not family members. It was important for the family business of the supermarket  to employ non family members in the top management positions as they were the decision making body of the company since family members could corrupt the operations of the business..

            .  The board of directors also provides performance feedback to the senior management so that if there is anything that hinders its operations it can be rectified so as to enable successful operations of the business.  It also oversees the family’s involvement in the business because family’s involvement can weaken the operations of the business.  The board of directors also advised  the management team and the family council on how to manage the businesses debts so that it did not go into liquidation due to poor management the funds of the business, it also advised on how to recruit personnel into its business, such that it employed that only qualified personnel are employed so that the operations of the business were carried out efficiently and effectively.

            The supermarket family-run business was usually controlled by the family members because they usually own more than half of the shares of the business.  The advantage of running this type of business was that the staff had common values thus could make decision-making process to be done in an effective way.  The staff were more committed in the affairs of the business since they could sacrifice their time and effort to ensure that the goals and the objectives of the business were achieved. There were challenges of running the family business such as family issues would crop up and the management would have a difficult time to reconcile family members over their own issues . The problems were: some family members would assume that other members knew and felt what they want was right, the personal ties between family members would prevent honest opinions to be expressed and other cases a family member would dominate the operations of the business thus they would  prevent the ideas and opinions of others from being expressed thus inhibited the  progress in the management and the operations of the business.

            The supermarket family run business management  set up plans of how it would pass the management of the business  from one generation to another  generation so as enable the continuity of the business in the future .Incase the management does not outline its successor early enough it may have problems in the future since one of the top management who makes principle decisions for the business may die thus lead to the liquidation of the business since  it is a partnership that consist of family members.  It can do these by developing a succession plan that consists of the goals of the succession process of the business , a time table of the transition stage that identifies the successor and how the responsibilities and duties of the business are to be transferred from one person to another.  The succession  plan consists of also a contingency plan that is intended to cater for unforeseen situations that may arise in the future.  These plans in the supermarket management enable it to achieve its goals and objectives since it outlines how the duties and responsibilities of the business are carried out  and divided among the personnel hence enabling work to be carried out effectively.

            E-commerce is a process of buying and selling goods and services through the internet.  This form of  on line transaction consists of buyers and sellers who own computer that have internet and those that have communication channels such the modulator demodulator which enables to be carried out effectively thus communication channel enables the buyers and sellers to  communicate with each other about the products and services that they require thus enables to take place effectively.  The buyers prepare purchase orders about the products they demand and the sellers send them price lists  and of the products in form of a catalogue and the process continues up to the time the goods and services ordered are delivered to buyers and the sellers obtain their cash for the purchased goods and services.

            In the supermarket family run business it is important for the management to use the e-commerce form of online transaction since it enables transactions of goods and services to be done efficiently and effectively.  It is also a fast way of ordering goods since it saves time of using many personnel to place orders for the business.  The cost of carrying out the whole process using internet  is quite minimal since the internet channel carries out all these tasks from the ordering part to the payment of the goods and it also involves few people such as the administrative staffs who do the ordering of goods and services from the suppliers of goods and services.

            The supermarket family –run business  can be effectively managed if proper governance is addressed by the management of the business. Effective governance  in a business enables it to have a sense of direction, values that the employees of the supermarket should live by or work by so as to enable them to perform their activities effectively. . It also enables the business to  choose the right personnel who can lead the organisation to greater heights of prosperity.

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