Family Business Decision Making One of the biggest parts of a manager’s job is making decisions. The decision-making process is not as straightforward as saying “yes” or “no” to a presented option. Managers must decide to decide, decide how to decide, and decide on what should be done Family owned business have a unique decision making system. In the following exercise you are asked to apply what you know about decision making to this unique model. Read the case below and answer the questions that follow. Family businesses often have the ability to adapt to changing market conditions and make faster, better decisions than large multinational companies or corporations. This is a competitive advantage made possible by a shortened and unique decision making process. This shortened process is often criticized for encouraging flippant decisions made without a sound business strategy, but there are ways to keep this competitive advantage without sacrificing organized and formal business practices. Unlike a traditional corporate structure in which the company’s CEO and management team creates a long-term plan that is then brought to the Board of Directors for approval, the family business structure can operate in a variety of ways and apply different processes for different situations. Autocratic decision-making most often comes to mind when people think of the family businesses process. The autocratic process consists of one person making decisions without any involvement from other parties. In a family business, this decision maker would be the senior most family member or owner of the business. Though an autocratic process is an effective system for routine decisions, more complicated decisions should include other family members if possible. Other decision-making processes that might be used for complicated or important decisions are a democratic process, where all members of the group vote and the decision with support from the largest number of members is chosen, a consensus process, where a main decision maker presents facts that are used to outline the pros and cons of a preferred decision which the other members either support or oppose, and collaborative decision making, where all possible solutions are discussed and then ranked by all members as a group. Each process has its time and place in family businesses, based on the importance, frequency, and time available of the decision. For example, the process of ordering straws for the week in a family-run restaurant would most likely be an autocratic decision. It is not necessary to take the time to sit each member down and discuss the pros and cons of ordering 1000 straws vs. ordering 2000 straws. One decision maker can make this decision quickly and efficiently. In contrast, the decision to buy out the store next door and expand the restaurant would be a decision in which the family-run restaurant might want to use a collaborative decision making process. All members should be involved and all options should be discussed in detail before the decision is made. Though this process may take longer, it is important to make such big decisions with the support of all family members. In addition to understanding the proper implementation of each decision making process, family businesses can make sound business decisions by recognizing the importance of several steps which include: embracing necessary change, taking steps to understand family members and how to best communicate with each individual, determining in advance what will be the process of addressing a lack of unanimity, and not thinking of decision-making conflict as the same thing as relationship conflict. Sources.