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These articles by Teena Chandy and Melinda Sherwood were published in U.S. 1 Newspaper on June 23, 1999.
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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,
"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
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
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:
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.
get you on finance charges.
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:
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
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
may not be what you want now. Review your goals annually.
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
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.
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
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
you overcome your weaknesses, says Andrea Sanders
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,"
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."
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
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
There are three ways that policyholders can benefit from the implementation
of the various reforms and the mandatory rate reduction:
new policy options and reflect the mandatory rate reduction.
by any insurance company on or after March 22 will contain the new
policy options and reflect the mandatory rate reduction.
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.
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
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.
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
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.
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.
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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