What is a family business? A family business or family business is a commercial organization where the decision-making process is influenced by several generations of a family (those bound by blood and/or marriage) who are identified and attached to the company through leadership or ownership.
This definition was explained by Shanti Lasminingsih Poesposoetjipto, namely the Main Commissioner of PT Samudera Indonesia as well as the Board of Trustees of the Nusantara Family Business Fitrah Foundation in a Public Lecture at the Department of Business Administration “Family Business Governance in Indonesia: Challenges and Opportunities” on Friday, October 14, 2022 morning in Building M FIA UI.
“If you want to continue the family business or form a family business, today’s lecture will be very useful for all of you. This topic is closely related to our course, namely the Department of Adm Commerce. I hope you can learn a lot today,” said Dr. Eko Sakapurnama, S.Psi., MBA welcomed the public lecture participants.
Shanti said that in a family business, family members who are business owners have enormous influence in decision making. However, when the company becomes large and well-established, the role of the family as the owner will shift to being the leader and the owner only because the company will need and have a third party who is responsible or involved in decision making.
“In a family business, there is a concept called the 3 circle model where these 3 groups will depend on each other and intersect to form a family business system consisting of family, ownership (business owner), and business,” said Shanti.
In a family business, said Shanti, a good governance system is needed which of course can be obtained by students through the lecture process at FIA UI’s Business Administration. Therefore, added Shanti, in a family business it is better to have a mutual agreement from the start through a family forum, family assembly, and family office.
“There will always be even more challenges in developing a family business. There are challenges in the issues of ownership, family governance, business management, management of family wealth that is not only in the form of money, and succession challenges (leadership transitions in family, business and ownership environments. We must be prepared to face all of these challenges and there must be empathy for working together in the family business,” he added.
Furthermore, a student of Business Administration asked how to deal with the dynamic changes of a family, which generally will increase in terms of human resources. “The important thing is to apply the right governance, not to satisfy anyone’s pleasure. There needs to be communication between family members, if necessary hiring a third party so that the decisions obtained will make the family business sustainable and beneficial for the owner and manager. One of the most important things to remember, Business is not your goal, but your vehicle to achieve your goals,” said Shinta.
Then, FIA UI presented a plaque as a form of appreciation from FIA UI to Shanti Lasminingsih Poesposoetjipto who had shared knowledge with FIA UI students. The event finally closed with a group photo event with all participants in the general lecture on Business Administration.