CAN FAMILY BUSINESS MANAGERS MANAGE FAMILY BUSINESS RISKS?
CAN FAMILY BUSINESS MANAGERS MANAGE FAMILY BUSINESS RISKS?

Summary/Abstract: The purpose of this conceptual paper was to investigate risk management in the family business. Risk management poses challenges to family business’s survival, as family members do not take actions on risk. Family members find managing risk difficult; therefore, they prefer to avoid taking actions. The assessment of risk is difficult and family businesses lack the ability to determine risk management priorities, including risk management review processes to evaluate risk. Risk priorities should be refocused to be in line with the strategic direction of the family business. Family business owners should also seek agreement on the risk goals of the business. Managing risk effectively will assist the family business to perform well and to maintain sustainable growth. Since very little research is conducted on risk management in the family business, this paper contributes to the existing literature by unpacking risk management in the family business context. The research concluded that managers should be educated on how to define acceptable risk in the financial area. The research recommends that family business managers should have a historical perspective on finance, as it will assist in identifying risk management areas.

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