Management practices and business performance of family-owned enterprises

This study assessed the relationship between management practices and business performance of family-owned enterprises in a countryside setting. The descriptive correlational research design was employed involving ninety (90) business enterprises in the key cities in Region 02, namely Tuguegarao City, Santiago City, and Cauayan City. Quota random sampling was used and a questionnaire is the main data gathering instrument. Data were analyzed using descriptive statistics and Pearson-r correlation.

Majority of the family businesses operating in Region 2 are in merchandising and three (3) for every four (4) are considered microenterprises. Only 5.55% have levelled up from microenterprise to small enterprise. At the helm of these family enterprises are mature, married and educated women who have managed to stay in business for an average of seven (7) years. In general, the owners, who also manage their business, observe good management practices as evidenced by the profitability and growth of their business. They have sound management practices in terms of the management of operational expenses and its people/workers. These enterprises have slowly improved their business performance in terms of sales performance, expansion of their businesses and in maintaining or improving their market share. Results further reveal that more mature family business owner tend to have more operational expenses compared to their younger counterparts. The operational management of family-owned enterprises is significantly associated with the type of business they are engaged in, the number of years in operation, the number of workers, and initial and present capital. Moreover, the people management practices of family-owned enterprises are significantly related to their business performance as indicated by the number of business expansion and market share. The study confirms existing research literature on micro and small enterprises which are generally led by the matriarch in the family. The family business is a collaborative effort of family members, with some members in supporting roles, as they are immersed in the business, and their management skills developed in the process. Moreover, succession issue is not a priority for the micro and small enterprises. Family businesses of the micro and small classification generally do not resort to external financing and opt to build their capital slowly from the revenues generated by the business. They manage their operational expenses at the optimum possible level and recognize the contribution of the human resource in the profitability and growth of the business.