How Family Firms Can Improve Their Long-run Survival

One of the potential advantages that successful privately-held companies have over their public competitors is their ability to make long-term strategic decisions based, in part, on what has been called “patient capital.” It means not having to answer to securities analysts and outside investors who tend to favor short-term results and short-sighted strategy. But firms can find this advantage only if they have a unified shareholder group. That, in turn, depends on the risk profile of individual family shareholders. It’s one of the topics that Timothy Habbershon, director of Wharton’s Family-Controlled Corporation Program, covers in a new research paper titled, “Improving the Long-run Survival of Family Firms.”

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