Fund management in family businesses
The South African economy depends to a significant extent on the continuity and success of family businesses as they have the ability to generate significant wealth and jobs on a much larger scale than any other business. It is therefore very unfortunate that family businesses that form such a vital part in the economy of SOUTH AFRICA have such a low success rate. One of the main contributing factors to the low survival rate of FBs is the lack of or non-existence of proper fund management and governance that have an influence on the financial sustainability of these businesses. This field study examined the importance of implementing new systems and procedures as identified by management and staff of the family businesses with the aim of improving fund management, in order to ensure increased sustainability in family businesses. Furthermore, this field study identified and discussed specific benefits and implications of a well-established fund management culture. The researcher used a mixed method approach in analysing present fund management practices in family businesses. Questionnaires, focus group interviews and individual interviews with the executive management and family members of family businesses were applied to identify areas of improvement within the fund management model, together with the participants’ views of how improvements can be addressed. Subsequently, the researcher applied the findings to identify practices that are required as part of efficient fund management to formulate a model fundmanagement framework that family businesses can implement and maintain to ensure increased sustainability in family businesses.