Greg Mankiw’s Blog has a summary of the New York Times review of a new book on family business Dynatsties: Fortunes and Misfortunes of the World’s Great Family Businesses, by David S. Landes. The book profiles a handful of family businesses, some famous and some not as well known.
While it is interesting to note that “family” businesses in the Fortune 500 (no longer private family businesses, but still family controlled) outperform their “professionally managed” counterparts, their recognition of the power of a truly good corporate culture is what is most intriguing to me. From the New York Times:
There’s also much to be said for family “stewardship” — the sense that you have been entrusted with a multigenerational inheritance, not just a company. The Northeastern grocery chain Wegmans is now run by a fourth generation of family managers. Regularly voted one of the best American employers, it is known for the range and quality of its goods, its beautifully appointed stores and its knowledgeable and friendly staff. The buyout experts who snapped up grocery chains through the 1980’s and 90’s, firing workers and cutting benefits, would not have understood what the Wegmans are about.
The link to Greg Mankiw’s Blog came from Ben Cunningham, who raised the interesting point in his e-mail to me about what these businesses can teach us about the estate tax. These families not only build good companies, but profitable ones, as well. Is it not in the public interest to try and support these businesses rather than try to tear them apart through the burdens of the estate tax?