Rx for Credit `Affluenza’

Women in Hi-Tech

Export Assistance Center


Builders’ Initiative:

Corporate Angels

Corrections or additions?

These articles by Teena Chandy and Melinda Sherwood were published in U.S. 1 Newspaper on June 23, 1999.

All rights reserved.

Family Business: The Inner Works

Families bring great strength to business, they complement

and support each other, says John Ward, founder of the Family

Business Center at Loyola University. "Families bring energy,

emotion, and passion to business and that works well. That is why

we have millions of family businesses and that is why they are so

successful." Ninety percent of all companies in America are family

businesses, says Ward, and they produce 50 percent of our Gross Domestic

Product (GDP). Inc. magazine reports that 42 percent of the Inc. 500

(fast-growth firms) are family businesses.

Ward defines a family business as one that is owned by one family,

and one that expects the next generation of family members to carry

it on. An active speaker on family business succession and author

of "Keeping the Family Business Healthy" and "Creating

Effective Boards for Private Enterprise," Ward will speak about

"What Works and Doesn’t Work for Family Businesses" on Thursday,

June 24, at 8:30 a.m. at the Family Business Forum of the George Rothman

Institute of Entrepreneurial Studies at Fairleigh Dickinson University.

Call Tom Kaplan at 973-443-8979 for membership information.

Formerly dean of undergraduate business at Loyola University, Ward

has been teaching strategic management and business leadership at

Loyola’s Graduate School of Business for 30 years. Ward majored in

economics at Northwestern University, Class of 1967, and has an MBA

and PhD from Stanford Graduate School of Business.

Contrary to what most people think, a family business is not necessarily

a mom and pop business, says Ward. Ford, Levis Strauss, Johnson Wax,

and the Washington Post are among the more renowned examples of businesses

that have been family-owned. "Family businesses are so much more

personal and interesting than non-family businesses," says Ward,

who discovered his future specialty when he was working as a business

consultant. By the same token, family businesses face totally unique

struggles and challenges.

One of the contradictions about a family business is that people perceive

the family and the business as being in conflict with each other,

says Ward. The presumption is "that when you concentrate on the

family, you compromise the business and when you concentrate on the

business, you compromise the family. There seems to be a paradox and

resolving this paradox is the real art of a family business."

At the workshop Ward will discuss how focus on the family can actually

be good and strong for the business and vice versa. "You have

to find a good synthesis that works in the best interests of both

family and business simultaneously."

A major first generation struggle in family businesses is the transition

of control, says Ward. What can you do about senior members, often

founding members, who are not ready to let go of control? Nothing

much, in Ward’s opinion. "It depends on how intransigent the senior

generation is. You have to hope and wait." Attracting competent

heirs to be interested in the business is another first generation

issue, adds Ward.

As the business moves on to the second generation, the struggle involves

brothers and sisters having to work with each other in harmony, says

Ward. "It is also important to keep other family members who are

not directly working in the business happy and have them continue

to be interested in the business as shareholders."

"By the third generation, the strategy of the entrepreneur is

often tired and needs to be refreshed and re-energized," says

Ward. Finding ways to revitalize and rejuvenate the approach of the

business, creating a flexible culture for the business, dealing with

change, and adapting new ideas are usually third generation issues,

says Ward.

"There will be conflicts between brothers and sisters, and power

disputes between generations," says Ward. "How they handle

it is what makes the difference. Usually they care about each other

and there is a deeper level of commitment and responsibility towards

the business."

Counseling can help during difficult times, says Ward. "If a family

plans far ahead, it can work out many of the critical issues."

For example, in anticipation of a divorce situation, many couples

draw up marriage contracts to make sure the business stays in the

family. But Ward also adds that couples in family businesses do not

usually get divorced.

Families in business should agree on rules of conduct, on how they

are going to make decisions, says Ward. "We encourage family businesses

to have independent boards of directors formed by people in the community

the family has a great deal of respect for." Boards are typically

formed of family members, but ideally should include non-family members,

says Ward. "When family members disagree, they can get objective

input and counseling from the board."

Successful family businesses are guided by values and a philosophy

that the family will work hard to resolve its problems, says Ward.

For example, Ward points out, the value of trust. "When you emphasize

trust in the family, it provides strength for the family. When you

emphasize trust in the business, it provides strength for the business.

When you focus on such values rather than issues," says Ward,

"you lift yourself above the smallness of the issue to something

more important and powerful — the values that will help the family

and the business overcome all odds."

— Teena Chandy

Top Of Page
Rx for Credit `Affluenza’

They call it "affluenza:" the cultural edict

to spend much more than one earns. Scott Dingwall, director

of Consumer Credit Counseling Service (CCCS) of Central New Jersey,

a nonprofit agency that helps people climb out of debt, says its an

epidemic. "Almost everything today is designed around the `buy

now, pay later’ idea, but if you can’t afford it now, how are you

going to afford it in six months?"

Last year the Consumer Creditor Counseling Service’s parent organization,

the National Federal of Consumer Counseling Services (http://www.nfcc.org),

returned $4 billion to creditors and pulled hundreds of people out

of the red. Whether you are a few thousand dollars in debt, or on

the verge of bankruptcy, the agency provides free professional budget

counseling, negotiates lower finance charges with creditors, and puts

you on a realistic payment plan.

The only catch: you have to let go of those credit cards. "We

design a plan that you can handle, that creditors accept, and we act

as the middle person," says Dingwall. Consumers make payments

directly to the CCCS for a minimal monthly charge, and in return,

get peace of mind. "It’s not a loan. We try to keep people within

a four to five-year payment program."

The CCCS is funded in large part by creditors and businesses themselves.

"They understand that being supportive is a win-win situation,"

says Dingwall. "We help the client get back on his feet so they

don’t have to do collections."

The CCCS is a service of the Family Guidance Center, a nonprofit community

service agency that helps people cope with problems related to alcoholism

and drug addiction. The debt-management program was established in

1993. Today, the CCCS has 1,400 offices throughout the country. The

New Jersey headquarters is located at 117 Estate Boulevard in Trenton,

and the agency has satellite offices at 253 Nassau Street, Mount Holly,

Flemington, and Plainsboro. The agency just hired a bilingual counselor

to work with Spanish-speaking clients.

More and more, says Dingwall, people are beginning to see the emotional

cost of overspending, particularly on the young. When Mitzi Pool,

a freshman at the University of Oklahoma committed suicide, she left

checkbook and credit cards — showing debts totaling $2,500 —

strewn across her bed. A few years earlier, another young man committed

suicide leaving $10,000 in debt.

This has sparked criticism of tactics employed by credit card companies

to lure in students on college campuses or through the Internet. "Credit

is much more readily available than it ever was," says Dingwall.

At the same time, he says, people are less-prepared to handle their

finances responsibly. "People come out of school and even college

and don’t have good money management skills," he says. "They

never had a course that taught them how to balance a checkbook."

The only way to use credit without getting burned, says Dingwall,

is to practice sound financial habits all-around:

Make a budget. "The biggest thing people do is underestimate

their expenses, and overestimate their pay," says Dingwall. To

avoid that, he says, assume you are going to pay for unexpected car

breakdowns or medical bills. "That’s when people normally reach

for their credit cards," he says.

Don’t carry a balance more than a month. Creditors always

get you on finance charges.

Negotiate with creditors. "Always try on your own

to negotiate a lower interest rate," Dingwall says. If you have

re-paymnt problems, "tell them what is going on because they may

have helpful programs, such as hardship or internal help programs."

If creditors see you have good standing, they’ll consider this, and

may give you anywhere from three to nine months of relief.

For more long-term budgeting, the CCCS offers these tips:

Involve the entire family. If your spouse wants to travel,

you’ll need more money in retirement. If your child wants to attend

a private rather than public school, more money must be set aside.

This is a good time to work out what sacrifices are going to be made

and where.

Establish long-term and short-term goals. Start with short-term

cost-saving goals, such as packing lunches. Trim the fat. It is not

only good for your pocket book now, it builds healthy habits in the


Prioritize. Rank your goals from top to bottom.

Recognize that goals change. What you wanted a year ago,

may not be what you want now. Review your goals annually.

Start saving. This is the hard part. Calculate how much

money per month has to be set aside, and if possible, have it automatically

deducted from your account or put into a 401k or earmarked savings


Credit, says Dingwall, is not all bad. "In some cases, it

can be good financial planning. Some creditors will essentially give

you an interest free loan for up to six months." Keep in mind,

though — you will have to pay eventually. The key is to think

now, not later.

Top Of Page
Women in Hi-Tech

Hi-tech industries eagerly seeking scientists should

tap into a virtually unmined pool of talent: women. Research conducted

by Catalyst, a nonprofit research and advisory organization that works

with businesses to advance women, surveyed 30 leading women scientists

and discovered that more than half were given little or no information

early-on about opportunities in the corporate job market.

Companies need to market better to women, says Sheila Wellington,

Catalyst president. She says businesses need to work harder to recruit,

retain and advance talented women. They can start by funding more

internships, setting-up mentor programs with local educational institutions,

collaborating with professional associations of women, providing seed

money to women graduate students, and establishing funding for visiting

lectureships and distinguished academic scientists to work with scientists.

Catalyst conducted interviews with 30 pioneering women scientists

in Fortune 500 companies to find out how they are overcoming the absence

of female role models, misconceptions about women, and other barriers

to advancement in their field. All emphasized the importance of cultivating

technical expertise, developing a successful style, obtaining stretch

assignments, choosing a mentor, and networking both inside and outside

the company. Some of the most successful female scientists offered

personal advice:

Mirror the behavior you’d like to see in others, says

Judy Giordan, vice president and corporate director of research

and development at International Flavors and Fragrances, which has

an office on Docks Corner Road in Dayton. "If you want to see

openness, generosity and helpfulness, be that way yourself," she


Find a company that values your strengths, and can help

you overcome your weaknesses, says Andrea Sanders, former vice

president of research and development at Rhone-Poulenc North American

Chemicals, now head of her own consulting firm. "Don’t be afraid

to open doors to see what’s there. Walk through some of them,"

she says.

Have complete confidence, says Frances Allen, senior

technical consultant to IBM’s research solutions and services vice

president. "Believe that you’re dead right," she says. "This

is an exciting period in science and women are going to play a great

part in it."

Top Of Page
Export Assistance Center

The Newark Export Assistance Center is compiling the

U.S. Department of Commerce-U.S. Exporters Yellow Pages. This resource

guide is distributed to United States Embassies, consulates, and business

outlets in 190 countries. In addition, registration in the Yellow

Pages directory will include an in-depth company profile on the Internet.

Register at http://www.docexport.com or call Harvey Rubenstein

at 973-645-4682.

Top Of Page

Car Insurance

Understanding New Jersey’s New Auto Insurance System,"

a comprehensive booklet published by the Insurance Council of New

Jersey (ICNJ), offers New Jersey drivers information about the Automobile

Insurance Cost Reduction Act (AICRA), the latest legislation to address

problems associated with the high cost of automobile insurance. Developed

in cooperation with the Independent Agents of New Jersey, the Professional

Insurance Agents of New Jersey, and the Insurance Brokers Association

of New Jersey, this brochure offers a brief summary of the changes

in the law that will affect New Jersey motorists and how motorists

can control their own auto insurance costs.

"The greatest challenge in implementing these new laws is to help

consumers understand the positive aspects of these changes and how

to take advantage of them," says Rachel Enoch, an editor

at INCJ. "It is important that consumers understand the many new

policy options and cost reduction measures available to them as soon

as possible."

There are three ways that policyholders can benefit from the implementation

of the various reforms and the mandatory rate reduction:

1. Any policy bought after March 22 should contain the

new policy options and reflect the mandatory rate reduction.

2. Any automobile insurance policy processed for renewal

by any insurance company on or after March 22 will contain the new

policy options and reflect the mandatory rate reduction.

3. If a policyholder wishes to change the policy before

its scheduled renewal to take advantage of the new reforms, it can

be done. The policyholder should contact the insurance agent or company.

They will offer advice on how to request this type of change.

Consumers can obtain more information by calling 800-NEW-CHOICE

or at http://www.njautoreform99.com.

Other publications by the ICNJ include "Your Guide to Shopping

for Auto Insurance," explaining the types and amounts of coverage

consumers can purchase and also including a rate comparison form consumers

can use when they shop. "The reforms under AICRA, as well as the

implementation of tier rating last year, makes it more important than

ever for consumers to shop around," says Enoch. "This brochure

helps consumers make informed decisions about the insurance they are


Top Of Page
Builders’ Initiative:

Less Red Tape

Two recently passed laws will help builders to cut some

of the knots of red tape and could therefore help trim construction


The Uniform Wording of Guarantees (S-164/A 1775), initiated by the

New Jersey Builders Association (NJBA) for the use of a standardized

form to be used for performance guarantees, maintenance guarantees,

and letters of credit, has become the law of New Jersey. "The

new law will benefit both municipal government and the private sector,"

says Joseph Mutinsky, NJBA president. "Standardized bond

language will save time and money, while providing greater legal certainty

to all parties."

While the new law has an immediate effective date, its benefits will

not be realized until the form is approved by the commissioner of

the Department of Community Affairs (DCA). "The NJBA hopes to

work closely with the Department of Community Affairs in the development

of the standard form," says Mutinsky.

The DCA and the builders won a major victory in another matter —

engineering standards. Rutgers University planners and engineers from

the Center for Urban Policy Research drafted engineering and design

criteria for roads, drainage systems, and underground utilities that

serve residential subdivisions. The DCA adapted these criteria in

1997 as the Residential Site Improvement Standards (RSIS) and the

legislature approved them.

But the municipalities objected. The New Jersey League of Municipalities

told state Appellate Court in 1998 that the RSIS was an intrusion

on "home rule." That court ruled in favor of the standards

and the Supreme Court concurred in a recent decision, saying that

the legislature had consciously departed "from the traditional

`home rule’ aspect of zoning" in order to reduce housing costs.

"We believe that the Supreme Court has wisely distinguished between

municipal planning, which determines what will be built in a community,

versus the engineering standards that dictate the safety and soundness

of how it is built," says Mutinsky, who represents 1,800 member

firms. "Statewide standards mean that individual municipalities

no longer need to spend property tax dollars to redesign the wheel.

Rutgers has done it for them, and that means savings for local governments

and homeowners alike."

To know more about either law, call Carol Ann Giancarli, NJBA

director of legal and legislative affairs, at 609-587-5577.

Top Of Page
Corporate Angels

Fifty-five is a good number for Princeton University

and for Peter Lewis, chairman and CEO of the Progressive Corp.,

the auto insurance provider. Lewis, a member of Princeton’s Class

of ’55, has given $55 million to the university, $35 million of which

will be used for the new Institute of Integrative Genomics.

"I’ve always been a risk-taker myself, and this new institute

seems very much in that spirit," says Lewis of the institute,

headed by Shirley Tilghman, which will integrate research in molecular

biology with such fields as chemistry, physics, engineering, and computer


Ken Boxley, an entrepreneur from Beverly Hills, California,

has donated $315,000 to Rutgers University for a new scholarship to

honor Rutgers alumnus Paul Robeson. The Rutgers Endowed Paul Robeson

Scholarship will be awarded to a full-time New Jersey undergraduate

based on academic promise and financial need.

"I thought my contribution could help keep more of the state’s

brightest students here in the state for college, while also honoring

Paul Robeson and the values he stood for," says Boxley. A leading

donor to Rutgers for several years, Boxley has contributed more than

$1 million to the university.

Robert W. Basco, managing partner of the law firm Hill

Wallack, was awarded the Friend of Eden Award at the Eden Family of

Services Annual Dinner. The firm was the primary corporate sponsor

of the 1999 Eden Dreams Gala, Dreams of the Millennium, and has been

providing continuous support for Eden’s efforts to improve the quality

of life for children and adults with autism.

The Robert Wood Johnson Foundation has approved a grant

of $15,000 to the Rescue Mission of Trenton’s "Providing Home

and Hope — Building Futures" capital fundraising campaign.

The goal of the campaign is to raise $300,000 to extensively renovate

the exterior of the historic Cracker Factory building which houses

many key aspects of the Mission’s operations.

The Harmony School, Bristol-Myers Squibb, American Cancer Society,

Sarnoff Corporation, The Hillier Group, Bloomberg Financial Markets,

the Medical Center at Princeton, Mercer County Office of Economic

Development, McNeil Consumer Group, Engelhard Corporation, Janssen

Pharmaceutica, J&J Consumer Group, Merrill Lynch, Obik, Paine Webber,

and Princeton Learning Systems, are the Princeton companies participating

in the Mentoring/Internship program for Hun School students. The program

allows students to spend three weeks working in the field to develop

skills and prepare them for the transition to college and the work


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