Avoiding Unacceptable Risks

Hermut Kormann ()
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Hermut Kormann: Zeppelin University

A chapter in Topics of Family Business Governance, 2021, pp 87-90 from Springer

Abstract: Abstract We assume that each real family business owner has the vision to transfer their business to the next generation. Transferring it as a viable business and as an independent company capable of finding its own way to the future. What could prevent this vision from becoming reality is not earning less than the market leader. The risk is not posed by investing so much in good assets or in the infrastructure of a business that the Return on Capital Employed is reduced. The risk which could lead to the downfall of the company is posed by mistakes; a series of minor mistakes or one big mistake made by an already weak organization. Thus, the first priority to secure sustainability is to avoid big mistakes. We have statistics on the causes for the downfall of businesses: The top reasons are categorized as “management failure” or “lack of liquidity.” These explanations are not instructive. They are too general. Which are the root causes preceding these consequential events?

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:mgmchp:978-3-030-58019-3_17

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DOI: 10.1007/978-3-030-58019-3_17

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