INSTITUTE OF DEVELOPING ECONOMIES
Discussion Papers are preliminary materials circulated to stimulate discussions and critical comments

DISCUSSION PAPER No. 12

Family Business in Mexico:Responses to Human Resource Limitations and Management Succession
Taeko HOSHINO*
Abstract Indigenous firms in Mexico, as in most developing countries, take the shape of family businesses. Regardless ofsize, the most predominant ones are those owned and managed by one or more families or descendent families of the founders. From the point of view of economics and business administration, familybusiness is considered to have variety of limitations when it seeks to grow. One of the serious limitations is concerning human resource, which is revealed at the time of management succession. Big familybusinesses in Mexico deal with human resource limitations adopting measures such as the education and training of the successors, the establishment of management structure that makes control by theowner family possible and divisions of roles among the owner family members, and between the owner family members and the salaried managers. Institutionalization is a strategy that considerable numberof family businesses have adopted in order to undergo the succession process without committing serious errors. Institutionalization is observed in such aspects as the establishment of the requisitecondition to be met by the candidate of future successor and the screening by an institution which is independent of the owner family. At present these measures allow for the continuation of familybusinesses in an extremely competitive environment.

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Keywords: family business, ownership, management, succession, Mexico JEL classification: K22, L22, M12, M13

Deputy Director-General, AreaStudies Center, IDE (hosino@ide.go.jp)

The Institute of Developing Economies (IDE) is a semigovernmental, nonpartisan, nonprofit research institute, founded in 1958. The Institute merged with the... [continua]

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