The descriptive breakdowns in Table 12.1 below suggest that management planning is not a priority for a significant percentage of Australian businesses.
As shown in Table 12.1, when compared with non-family entities, family firms are less likely to have business plans in writing, approved by the senior team, and revised annually. Notwithstanding this, more than three quarters of firms regard their plans as effective.
Formal strategic (long-term) plans
Approximately 55% (50% for non-family businesses) of family business owners indicate that they do NOT have formal strategic (long-term) plans to guide their firms through changing business cycles. In their investigations of success factors of exceptionally well performing family businesses, Miller and Le Breton Miller (2005) found that long-term strategy was the consistent common factor amongst these enterprises. Ward (2005) points out that quality strategic planning starts with family, and that family values and vision shape company strategy as much as any extensive market analysis.
Formal management structures
Formal management structures are also lacking in family businesses, particularly among first generation family firms. Over 50% of family business owners report that they do NOT have formal management structures in writing and implemented. Almost 52% of family enterprises do NOT have job specifications for the management team in writing and in place (Table 12.2).
Management meetings
On average, 61% of family businesses hold weekly management meetings, while almost 15% hold monthly management meetings (Table 12.2).
Performance appraisals
Regular performance appraisals do NOT appear to be a common form of communication, with either family or non-family employees (Table 12.2). Only 21.5% of family businesses have performance appraisal systems for family members, and 47.3% for non-family members. Similarly, 48.4% of family businesses do NOT carry out performance appraisals regularly.
Management incentives
Of those family business owners who provide performance incentives, many more do so at their own discretion (62.3%), than based on an agreed formula (37.7%). Table 12.3 lists the most favoured performance incentives used.