A Case Study of Harry's Family Farms

Introduction

Family-centred businesses tend to face a lot of challenges when it comes to perspectives related to socially responsible behaviour. This is because of the family involvement and the ties in the community. Recent research has shown that there is a certain level of enlightenment, self-interest and social responsibility when it comes to sustaining a business family in the changing environment. The most successful family businesses have been able to incorporate concerns of management, equality, brand reputation, customer loyalty, corporate ethics and environmental management not forgetting ethics and talent retention(Hategan, Sirghi, Curea-Pitorac, & Hategan, 2018). These are very important concepts when it comes to corporate social responsibility practices. However, incorporating them into family businesses and managing them has become very difficult for some family businesses. According to HFF, the appearance of the family's business is based on long-term orientation and understanding of the values and responsibilities that come with the family’s name within the business.

The Dilemma

Harry’s Family Farms is located in Villa Wood which is an Italian community neighbourhood that comprises a lot of Italians who are very good when it comes to fruit and vegetable production. This provided an advantage to the family farm since the company was able to benefit from a skilled labour force. The company picked the wrong partners when the company needed equity and had no fallback plan. Catherine defines HFF as an alien and secretive company. This is because the company has no documentation and no procedures. The company also lacks ordinary business discipline. The company has no formal consultation and leadership is mainly in the form of dictatorship. There is also no hierarchy and employees view their leaders as their peers. Catherine decided to influence David who is the CEO to establish bureaucracy and proper management practices. It is observed that it became difficult for David to organize meetings on basic concepts such as occupation safety and health. Such meetings were treated with a lot of suspicion. In the early 2000, the government of Australia decided to bring in the universal goods and service tax which was supposed to be applied to every sale of goods at a rate of 10%. The tax was meant to replace the federal wholesale system. This meant that the company had to start recording and declaring their transactions to be able to benefit from the tax refund that was to be given at any stage apart from the last stage of the consumer. This tax was refundable to the companies who declared their transaction processes. However, as it can be seen from the company's history there is no bureaucracy, no recording, no meetings and no proper record keeping. Considering that the employees were mainly Italians and some of them were migrant workers they did not trust the government. For that reason, most of them did not work for so long and retention of employees was a challenge.

Characteristics of Family-Owned Businesses

From the guest speaker’s notes, some of the characteristics of family businesses that are contributing to the current dilemma include the inability to consult when it comes to making decisions. Most of the decisions are made solely by the family(Marques, Presas, & Simon, 2018). The decisions are also lacking bureaucracy. On the other hand, long-term decisions and goals are preferred rather than short-term goals to be able to benefit the next generations. While the corporate world would employ and promote based on merits skills and achievement family businesses promotions are based on ability and suitability(Kashmiri & Mahajan, 2015). This creates a lot of nepotism a challenge that is being seen in the HFF family when it comes to corporate social responsibility and sustainability.

Managing the Dilemma

Government factors remain some of the most important factors that influence the operations of businesses. Government factors cannot be ignored and they have a way of changing operations within the business(Villanueva-Villar, Rivo-López, & Lago-Peñas, 2016). In this case, Catherine having been experienced in the corporate world has a dilemma on how to establish a reputable management system that is going to be accountable and applies the universal goods and service tax. This is aimed at ensuring that the company is not losing money and benefits a hundred per cent from the refundable tax. To do this Catherine will have to initiate training for the employees and establish a finance department. This will require a finance director who will have to be trained on how to operate the management system. In the corporate world enterprise management system is established and helps in the management of the entire organization's financial system(Deniz & Suarez, 2015). It will be important to establish an Enterprise management system. This system will integrate all the activities within the farm and help in managing various factors. This will also help in the process of recruitment as it will be integrated into the human resource management system(Sageder, Mitter, & Feldbauer-Durstmueller, 2018). This will also help in accounting for the number of employees within the company. It will also be easy to track the number of years employees have been employed, skills, wages and salaries as well as other aspects. Using this information, it will be very easy to track the performance of the company to be able to avoid losses.

The other challenge that is being observed in the company is a conflict that is brewing between Catherine and the Italian employees. It is always argued that family businesses tend to use observable signs that reflect their families’ specific intentions when it comes to building long-term trust and relationships with internal and external stakeholders(O’Boyle, Rutherford, & Pollack, 2020). Family businesses are known to provide incentives to groups to be able to share their knowledge with the family firms. In most cases, family firms tend to have greater control over management and are usually very reluctant to open up. This reduces cooperation that may be required to lead to congruent actions with the dependence of external partners(Sundarasen, Je-Yen, & Rajangam, 2016). It is going to be difficult for Catherine to establish a good working environment within the organization. This is because the current management system is more of a dictatorship.

To manage conflict, there will be a need to change the management system in the form of leadership. Transformational leadership theory will have to be used and proposed as one of the ways of improving the performance of the employees without creating suspicion, confusion and conflict within the organization(Feliu & Botero, 2019). Transformational leaders are known to lead by actions. They are known to impact the employees through their quality leadership skills. Transformational leaders are known to have good communication skills. Transformational leadership has been known to create changes in individuals in a social system(Madison, Holt, Kellermanns, & Ranft, 2019). It inculcates valuable and positive change for the rest of the employees and David can exploit this form of leadership because the current employees trust him very much and treat him as one of their own. Using transformation of leadership, it is possible to establish goals and develop the employees to follow the goals and vision of the farm(Cuadrado-Ballesteros, Rodríguez-Ariza, & García-Sánchez, 2017). Using transformational leadership skills, it will be very easy to incorporate corporate responsibility by identifying a suitable successor who has the necessary skills and competencies when it comes to navigating and managing family businesses. Transformational leadership is a strategy that has been used by most of the family businesses in transitioning from one generation to the other.

HFF lacks professionalization. Professionalization always aims at transforming the organization to be able to depend on a single figure to have an organizational structure. The structure is supposed to be in such a way that it is managing resources driven by the company's vision in a transparent and accountable way(Kim, Fairclough, & Dibrell, 2017). The family leaders are supposed to be able to delegate and allow the process of decision-making to be more accountable by engaging the juniors. Currently, the looming tax system is an external factor that is threatening the sustainability of the farm. There is also a threat in the form of relaxed financial performance as well as low customer satisfaction(Binz, Ferguson, Pieper, & Astrachan, 2021). There is a need for their company to turn around and hire external CEOs to be able to expertise the company. To deal with this dilemma there is a need to professionalize the business by creating and implementing some of the organization strategies which should be more transparent to all these stakeholders including the employees and the customers. Professionalization is likely to allow the next generational leaders to be able to find the organization more attractive. This will create proper career incentives and plans. Professionalization will also allow non-family members to be more interested in breaking the glass ceiling of the family-run business by adjusting and attracting highly qualified professionals to expand the business responsibilities within the hierarchy(Vardaman & Gondo, 2019). Considering that family businesses are usually less exposed to some of the key personal risk factors their management system may suffer from sudden departures or problems of health and this should allow other professionals to take over the businesses.

Like any other Family Business HFF is willing to control the business and establish long-term strategic guidelines to be exercised in successive generations. The dominant leadership is controlled by the family members and this collision is supposed to be shaping the vision of the businesses and potentially sustain it for future generations. One of the advantages that CEO David has is that there is a sense of value and culture of the family that is being shared by the community, especially the Italian community involvement(Harjoto & Laksmana, 2018). This has increased the visibility of the company giving the company a better reputation in the surrounding community. Catherine describes this as an alien and secretive company. She is also still wondering how such a company has been able to survive for all that long without proper documentation. This shows that the company is enjoying a greater responsibility towards the community and this has consequently increased its disability and reputation(Buchanan, Cao, & Chen, 2018). To sustain this there are specific dimensions of the corporate social responsibility on external stakeholders that the company needs to employ. This will include bridging the gap between the family-specific resources and the ability of the company to be able to absorb external knowledge. This means that the company has to acknowledge the fact that it needs to generate a competitive advantage by incorporating modernism into its management system(Bhatnagar, Sharma, & Ramachandran, 2020). It is also understood that emotional attachment and fear of losing power in the family businesses will always create a lower external view but may also promote a focus when it comes to tacit knowledge and internal sharing. However, it can be seen that HFF is still in its infancy stage especially when it comes to overcoming the negative effect of the family-specific resources. This is because the company is not yet well established and it is still in its first generation.

Conclusion

HFF is a family-owned business that is engaged in fruit and vegetable production. HFF is established in an Italian neighbourhood and enjoys greater accountability of the Italian workers. The company has been described to be an alien and security company lacking documentation procedures hierarchy ordinary business discipline and has no financial consultation. The leadership is the leadership and there is a lack of hierarchy. There is a general high level of trust between employees and their leaders. The need to replace the federal hospital system tax with the universal goods and service tax is a major dilemma that requires proper corporate and social responsibility to be able to sustain the business for future generations. This has been tackled well through decisions through conduct training of the employees. The introduction of an enterprise management system has also been recommended as one of the solutions that will help in the efficient management of the employee’s activities as well as the financial system of the organization. Establishing a transformational leadership culture has also been proposed as well as the solutions that can help in overcoming the current challenge the organization is facing. Transformation leaders have been known to transform family businesses and help transition from one generation to the other. This is one way the company can establish itself to benefit from the long-term goals and benefits established for future generations.

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