A Book Review of Setting Frameworks: Family Business and Strategic Management

Setting Frameworks: Family Business and Strategic Management by Elfren Sicangco Cruz. Manila: Anvil Publishing, 2005. Php 395. ISBN 971-271-699-6

(Winner, Best Book for Business and Economics, Manila Critics Circle's National Book Awards 2006)

The good news about businesses in the Philippines is that 98% are family-owned, family-controlled, or family-managed. The bad news is that close to 75% of family businesses don’t survive after the second generation takes over the business reins.

Setting Frameworks provides business owners with prescriptions on addressing the business performance of the family business using the strategic management perspective. Family business is defined as a business governed and/or managed on a sustainable, potentially cross-generational basis, to shape and pursue objectives set by members of the same family or a small number of families. Majority of the current literature on family business is descriptive, which focuses on the life of the founders and on how to improve family relationships.

Elfren Sicangco Cruz, a professor at the De La Salle University Professional Schools, says the book originated from columns he wrote for BusinessWorld. He wrote the book mainly to help Filipino entrepreneurs now faced with two major developments: globalization and rapid technological change.

Cruz, also board chairman of Alexander Forbes Risk Services Philippines, Inc., aims to make Filipino family enterprises “become efficient by world-class standards and manage to compete in the global market.” He provides theoretical concepts and illustrates them using real-life entrepreneurial stories. The concepts provide the reader with the framework which anchors the stories presented to reinforce the lessons.

To address the dilemma of overlapping two subsystems namely, “the Family” and “the Business,” Cruz challenges family firms to implement these steps: acknowledge and accept the difference between corporate ownership and professional management; establish separate processes and structures for dealing with purely family issues and purely business issues; professionalize the business by delegating management tasks to qualified family and non-family professional managers who can make logical and unbiased decisions; and introduce Strategic Management as the process for managing the organization.

For those who need more materials on family business, management, and strategic management, Cruz provides a comprehensive list of references. Both seasoned players and rookies in the entrepreneurial arena will reap lessons, insights, and tips from the book enough to make the family business survive for generations to come.

(First published in BOOKWATCH, July-September 2007)