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The Fredo Effect

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Emilio Rivas

on 9 October 2013

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Transcript of The Fredo Effect

The Fredo Effect
Emilio Rivas A01224432
Ana Torres Hall A01226203
The Fredo Effect
Inept family member.
Negative force in family firms.
Emerge due to the way parents relate to and interact with their children.
Poor performance and dysfunctional behavior once the child enters the family business.
One means by which any family firm performance advantage can be compromised is through a family member employee whose actions have negative implications for the firm, but who is not removed from a position where he or she can do a great deal of harm.
• Fredo Corleone symbolizes family members who are seen by other family and non-family employees as a serious hindrance to the firm.
• Less capable and less competent, and regarded as someone who only has a job in the firm because s/he is family.
How did I get Fredo into the Firm?
Single family or small groups of family.
Difference between family and non-family may obstacle goals.
Leader act more as father.
Affects company and individuals.

Parental altruism.
Guilt for past parental behavior.
Differing norms of family domain vs business domain.
4 styles parenting:
Authoritarian (low support, high control)
Authoritative (high support, high control)
Permissive (high support, low control)
Neglectful (low support, low control)
How parents raised their children, and how they behave affect the family business
How does Fredo damage the Firm?
Succession involves transition of leadership from one family member to another across generations.
Key challenge: Successful passage of leadership.
Key elements in achieving an affective succession
Positive parent-child relationships
Establishing trust.
Damages caused by a Fredo
Bad behavior
Wrong decision making
What can I do about Fredo before he takes our firm down?
Prevent before springing in the first place.
Identify the children that can work in the business, and imply standards for family employment and non familye members.
Never create jobs for a fam members.
Family member hired. Regularly monitored same as a non-family member.
HR management strategies can be applied to minimize chances for a Fredo.
The leader shouldn’t be alone on evaluating.
A job description and rules should be followed.
Work Ethics for all employees.
Incentive systems will help family members align interest overall.
Family members must believe need to earn rewards.
Honest feedback offers family members the opportunity to improve.
Family councils, to discuss conflicts and results.
Factor: What Business Founders Can Learn From The "Slow" Corleone Son
Illuminating: Fredo Effect
Berglas, Steven.(2012). The Fredo Factor: What Business Founders Can Learn From The "Slow" Corleone Son. Retrieved from http://www.forbes.com/sites/stevenberglas/2012/04/23/the-fredo-factor-what-business-founders-can-learn-from-the-slow-corleone-son/
Eddleston, Kimberly. (2009). Illuminating Fredo Effect. Retrieved from http://www.northeastern.edu/news/stories/2009/10/eddleston.html
Kidwell, Roland & Eddlestone, K. (2013.) How one bad family member can undermine a family firm: Preventing the Fredo effect. Retrieved from http://miscursos.itesm.mx/bbcswebdav/pid-4636293-dt-content-rid-10931507_1/courses/GDA.AD3000.91.1313.10019/The%20Fredo%20effect.pdf
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