The concept of conservatism in family corporations and its importance for institutional management

Today, via rapid globalization process, the meaning of business concept tend to change. Since 1960s, intense competition through markets forced businesses to look for new advancements and innovations for protecting their market positions. Modern businesses nowadays aim to 1- adapt themselves to recent technological changes, 2- focus on mainly on flexible team-work, 3- offer customer-oriented services, 4- use financial resources optimally, 5- gain maximum productivity from their workers and keep up with intense competitive market conditions. Such changes play a more important role in terms of family businesses of which have their unique characteristics. One key function of today's top management staff is to plan a successful and sustainable transition process in a highly competitive market environment. The balanced growth of business is very vital in terms of establishing an adequate sustainability level. In essence, family businesses constitute a major part of Turkish business organizations. Successful management of such family businesses and the extention of their life cycles play an important role on economy as a whole. In this context, institutionalisation process tend to have a greater role on today's businesses. According to literature review, the reason for failure of establishing sustainability of family businesses, both in Turkey and in world, seem to be the misunderstanding of transition process and impeding it unadequately. In addition, noninstitutionalised structures of family businesses decrease the likelihood of survival of them in period of economical crisis. Conservative family businesses take potential cost and losses into account on one hand while they don't perform any transaction about potential revenues and profits ahead of their time. Such businesses always prepare for the worst scenario and thus they take measures against potential losses. By doing so, they aim to survive such fluactuations with a minimum cost. In this study, the effect of institutionalisation on conservatism in family businesses was investigated. In first chapter concepts such as family business and their importance were explained. In second chapter institutional management concept, its definition and principles were described in detail. In third chapter, the effect of institutional management on conservatism was investigated, In this context, a survey was performed. This study will help in understanding the fundamental aspects of successful and sustainable business management process in terms of Turkish family businesses. KEY WORDS: Family Business, Institutional Management, Conservatism, Sustainability, Competition, Change