Law and Business

Research uncovers it's decision time for family businesses

Challenges surrounding the ‘family-run business‘ are widespread. In the last 6 months in particular the topic has received a significant amount of public and media interest. Dr Nick Mroczkowski, ACU Senior Lecturer - Accounting, has been delving into the issues surrounding the family business for a number of years, and has developed an extensive database of family firms to be used, not only for his own research, but for interested research students as well.

Dr Mroczkowski is now ready to extend this database and invite students of ACU to undertake research in the family firm/finance discipline. He sees the area as having a real significance here at ACU ‘”I believe this research is an important area of emerging literature and the main themes are consistent with the core values of ACU, especially the important role of the family”. Nick Mroczkowski has written an extensive article in the National Accountant about the issues confronting family firms, especially when they decide to make the transition from a private to a publically listed firm. Described as the ‘cross-roads phenomenon’, this is a dilemma many family-run businesses will come across at some stage in their lifecycle.

In his article, Dr Mroczkowski describes the two principal reasons a family-run business may go public. The first reason relates to refinancing the firm by using external funds as opposed to internal funds, and secondly public listing may be one of a limited number of sources of funds available to the firm seeking to finance new investments. Family firms looking to use the public route will be rewarded with a number of advantages including funding, profile and investor recognition, diversification, discipline and liquidity. However, the complex process behind going public can be daunting and expensive, and will mean procedures and regulations, a loss of focus, the potential for public scrutiny and complete loss of control. It is an area Mroczkowski describes as needing to be very carefully considered.

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