Institutionalization of family businesses in the globalization process

Recently, family businesses play a very important role in Turkey and in worldeconomy. Family businesses, which play such an important role in the worldeconomy, have to eliminate the inherent disadvantages, if it is to be more effectiveand efficient. The most important problems faced by family businesses are theirinability to ensure continuity and to build organizational structure.In this research, the characteristics of family businesses, advantages the anddisadvantages, the concept and factors of institutionalization are analyzed along withthe impact of institutionalization on family businesses. In family businesses,institutionalization on both the company and the family has great importance in orderto increase efficiency and to ensure continuity. Institutionalization has alreadybecome a most due to the increasing competitiveness as a result of globalization.The companies should not only consider institutionalization theoretically but alsoshould put into practice.In this research on application study has been done with 150 familybusinesses which are growing in Istanbul and Ankara. The result shows that amongfamily owned business consisting of both institutionalized and non-institutionalizedcompanies, important portion of family businesses are formed by companies whichare trying to institutionalize but not yet completed the phase. The result also showsthat an important portion of family businesses are the first generation.