Differences Between Traditional and Corporate Businesses

By: Together Abroad 05-12-2016 1:17 PM
Categories: ** HR Diversity Management,

When saying traditional family businesses, I mean the family businesses where most of the employees are relatives or are recommended by family members, and there is usually one owner or a limited partnership.Corporations, however,have a particular number of shareholders who have invested in the businesses’ stock, andall management activities are aligned with the corporations’values.

Work Culture

In a family business, the culture is determined by the values, influences, ethics, experiences and education of the family members who own and manage the business. There is a more informal approach; and in general, a patriarchal work culture is often prominent.

A corporation, on the other hand, adoptsa more formal cultural approach; and the organisational structure is usually de-centralised. The decision making power lies in the hands of a board of directors and the work culture in a corporation lacks the personal touch that is evident in a family business culture.

Values and Capabilities

In a family business,the owner subjectively sees the values and capabilities of the employees, and on that basis the employees are rewarded or “punished”. As such, the family members might be preferred for a promotion or a job position in the business over an ordinary employee. Nepotism can play a strong role.

Contrarily, the values and capabilities of the employees within a corporation are assessed and judged on merit. Hiring new employees and the promotion of others are made objectively and employees are judged on the basis of their worth and value tothe corporation. However, even in such a formal culture, nepotism can take place at the higher echelons of power.


In a family business, the final decision in creating the company’s strategies lies in the hands of one or a few family members who run and manage the business. Mostly they have a longer time horizon. The first generation is setting the foundations of the company and some members of the second generation usually get a business and management education, so the family business can grow further, and adapt with new technology or changes indemand and supply.

In a corporation, strategies and decisions are collectively formed by the board of members, and while theultimate decision making power may be limited to a few individuals, they nevertheless need to placate their shareholders. This process is more decentralised, where managers and strategy policy-making employees have the liberty to voice their opinions.

Although often underestimated, family businesses are key players in the global economy. They begin by providing services, manufacturing or trade. The engagement and the interest of the employees for a greater family cause in the family business is one of the strongest aspectsthat can lead to success. Some of them became major global players in the industries, for example, SC Johnson, Bosch, C&A or Haniel, and Samsung. Each of them found adifferent way to ensure the survival and successful management of the company, whilestill being owned by larger family members.

In contrast, successful corporate companies such as Apple or Google engaged the employees in the corporate work; they showed that they care for their people, even when making and implementing the strategies for the prosperity of the company.

Bringing closer both ways of managing abusiness, with making the right decisions at the right time, can surely lead to global success — a family business when led professionally, and a corporate business when led with care for the employees and customers.

Sonja Vos Ralevska

Photo credits: Designed by Valeria_Aksakova / Freepik

This article is restricted. You have to be logged in to be able to add further reactions.

Our Career programs assist you to Get hired

For an expat moving to the Netherlands, getting the right direction is very important. It's important that one knows which steps and direction to take. Linda is an exceptionally talent counselor, her advice has helped me land a job within a week of coming to the Netherlands. I am grateful for her mentoring and look forward to a great working relationship in the future.

Dr. Hrishiraj S | Clinical Research & Affairs Manager

Together Abroad provided expert advice on personal branding including developing a top-notch, market-aware CV, highly tailored job applications, and approach strategies with potential employers in the Netherlands. Furthermore, I found them be highly knowledgeable in key related fields such as recruitment strategy, immigration law, contracts, labor agreements, and (un)employment benefits. I would recommend Together Abroad to anyone who needs professional help with transitioning to a new career.

A. Aboufirass | Structural Engeer

Linda is a big mind. She thinks about things that the rest normally overlook. The insight she has about the dutch job market can only be achieved through years of experience and persistence.

Her business savvy is complemented by her mastery of understanding the client's needs and requirements. For my career I could say, she was the “Mary Poppins”, who guided me through thick and thin and helped me to land a career in the Netherlands

S. Bhattacharjee | FP&A Manager

If you are going to enlist the services of a "Career Coach" look no further. The only person you want in your corner is Linda van Orsouw. As an expat, you absolutely want to work with a highly skilled and knowledgeable professional who knows their way around the Dutch career/employment/job market. Linda assisted me in writing and positioning my CV, helped me organize and prioritize my list of opportunities, coached me through mock interviews and was there when I got offered a senior position only 2 months later. When asked I will only refer to Linda and "Togetherabroad".

Mr. C. Joubert
Lead Workplace Strategy Consultant 


New item