Purdue News

June 16, 2000 Video focuses on passing generational reins in family businesses WEST LAFAYETTE, Ind. – Purdue University consumer sciences and retailing students recently tapped local business people to learn how to handle the transition of leadership from one generation to the next in family businesses. The result is a 35-minute educational video, "Management Continuity in a Family Business," that is equally useful in the classroom and the boardroom. The students of Holly Schrank, Purdue professor of consumer sciences and retailing, will unveil their work on June 29 at 7:30 p.m. in Room 2280, Liberal Arts and Education Building on the Purdue campus. A reception will precede the video showing, and discussion and questions will follow. The event is free and open to the public. Special guests are the family business people featured in the video. They include Lafayette's Arni and Brad Cohen of Arni's Restaurant, Michael Kaplan of Michael's Furniture Galleries, Nancy Stacy of Midwest Rentals, Phyllis and Robert Hanstra (mother and son) of Reliable Exterminators, and Dan and Jeff Vierk of Vierk Fine Jewelry & Exchange. There are two Indianapolis family businesses represented in the video: Auntie Mame's Child Development Center with Mamie Harrington Townsend and Roselyn Cole; and the O'Brien Automotive Family with Thomas O'Brien. The family business class that Schrank teaches is required for Purdue students majoring in small business. "The reason is that the chances are high that any student at some time in his or her career will work for a family business, and each family business presents its own challenges and opportunities," Schrank says. While there is little in the way of national data on family businesses or even a consensus on what constitutes a family business, Schrank says there is general agreement that more than 50 percent of American businesses are family owned or managed. They range from mom-and-pop stores to multinational corporations. Conservative estimates suggest that family businesses employ more than 40 percent of the work force and generate 30 percent of the gross national product. Schrank says at its simplest level, a family business is one that is run by at least two family members who have the intent of keeping the business in the family. As the business grows and more family members become involved, there is much more desire and need to keep the business in the family. As a result, one of the biggest issues in any family business is passing the managerial reins of the business from one generation to another. The student video focuses on planning and preparing for management succession. Not dealing with the issue of succession can be disastrous for a family business, according to Schrank. "The students came to understand that the problems in a family business are distinctly different from those in a sole proprietorship or non-family corporation," Schrank says. "In a family business, the consequences of decisions have both personal and business ramifications." Source: Holly Schrank, (765) 494-9851, schrankh@purdue.edu Writer: Mike Lillich, (765) 494-2077, mlillich@purdue.edu Purdue News Service: (765) 494-2096; purduenews@purdue.edu To the Purdue News and Photos Page