Institutionalisation of family and family company is basic necessity principle for occupying sustainable competition advantage, being different and distinguishing from their competitiors, fetching over the avarage and transferring from generation to generation steadily. For this purpose, contrary to common belief simultaneously institutional studies have to be started both in family and in family company. Otherwise I mean in the version of that only company conducts institutionalisation studies, because family will have a lower level of institutionalisation it is highly probable the deformation of the systems which will be set in the company.
Briefly, institutionalisation is the management period of risks by predicting them that family or family company probably experience. Broadly, İnstitutionalisation is the period of setting the family and company systems, determining the principles and standards, determining elasticity limits and management of these, oriented in mission and vision of family and company; without regard to profits, requests, needs and benefits consisting of in and out environmental terms which are probable existed in familiy and familiy company.
Institutionalisation is a period and in time the institutionalisation level of companies becomes changeable. Contrary to be told, There is no company which is not institutionalized namely which the level of institutionalisation is 100%; and there cannot be a company which is institutionalized 100% . With a more articulate statement, companies cannot commence operations without carrying out basic law arrangements; and the company, which ensures 100% satisfaction of shareholder and reaches their targets, cannot exist. So the point is to be able to be raised of the institutionalisation level.
Institutionalisation period, which is all of effords of a company to provide a sustainable competition advantage and to sustain their existence from generations to generations, is not a study that will end totally or not a study to perform on a few people’s responsibility. Institutionalisation is a large-scale study which has to be sustainable and has to be adopted by all members of family company.
It changes according to needs of every family and family company but generally, institutionalisation of family and family company should be constructed simultaneously and includes these subjects:
- Determining the selling conditions of family company and according to the decision determining different strategies
- Preparing family constitution for family
- Arranging of real company contract, managing board service aagreement, heritage agreement, matrimonial regime
- Minority and majority; Determining the needs and responsibilities of wards and wards in chancery , educating the shareholders that are existed and raising shareholders
- For company, creating managing boards which have a muber of mugwumps and providing to make strategical decisions
- Evaluating and measuring the performance of managing board and family council
- Determining mission and vision of family and family companies
- Doing external auditing
- Running the periods of parallel planning about family and bussiness
- Institutionalizing of family expenses
- Defining the tasks of family and family company, and creating the systems that encourages to behave suitable for the tasks
- Encouraging to work out of family company or establish a bussiness
- Establishing ste systems to identify and prevent corruption
- Managing the wealth of family and family company
- Managing of the competence
- Constructing of inheritance and revertion , choosing the trusts.
As a result, institutionalization is related to legal, financial, cognitive and emotional etc. structuring.
Phd. Ebru KARPUZOĞLU