Ownership: In Context - Ownership

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One way of looking at ownership is through the three circle model of Family, Business and Ownership. If you are not familiar with the model, you can click on the diagram to learn more. While a lot of attention is often paid to the family and business realms, this course is one of kind by focusing exclusively on the ownership circle. Ownership means filling many different roles – in other words, as an owner, you wear many different hats! Why is it so important to learn about ownership? Because continued family ownership is the key to longevity. Did you know that 70% of family enterprises don’t make the transition from first to second generation? Of those that do transition, another 15% will not get to the third generation, and another 12% will not get to the fourth.

This has implications that reach farther than the individual business owner. Family enterprises are major contributors to the global economy, in terms of GDP and employment, which is seriously affected when businesses fail to transition. As the baby boomer business owners retire, it is estimated that, in Canada alone, $1.9 trillion in business assets will be transferred to new owners. This will affect close to 3.5 million jobs and 27% of GDP. By learning more about the roles, responsibilities and rewards of ownership, you will increase the likelihood that your business will beat the odds and thrive for years to come.

Three-Circle Model

Source: Adapted from Tagiuri & Davis (1982)

The three circle model organizes the three key elements of Family, Business and Ownership into three distinct circles. It then overlaps, to illustrate that a person can be in more than one circle at the same time.

For example, a person might be in the family circle because they are a family member, and the ownership circle, because they are an owner, but they do not work in the business, so they are not in the business circle.

This creates 7 different categories that people in family enterprises fall into, and understanding these categories can assist them in setting priorities, and help them to balance all of the different roles they are responsible for.