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Family Business and Relationship Marketing



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Family Business and Relationship Marketing The Impact of Relationship Marketing on Second Generation Family Businesses Catherine Ashley Cotleur Ph D MBA Dept Frostburg State University 12726 Cedar Hills Dr Hagerstown Maryland 21742 301 733 7024 H 301 791 4020 W ccotleur erols com Sandra West King Ph D MBA Dept Frostburg State University Frostburg Maryland 21532 301 729 1173 H 301 687 4375 W sandraking mindspring com ABSTRACT This paper addresses the importance of relationship marketing to success or failure in a second generation family business As power is transferred from the founder to the next generation family stresses organizational issues and leadership characteristics of the successor take center stage Established relationships with customers suppliers and employees may not receive the attention they deserve Failure to nurture these relationships may cause the loss of key members of these groups contributing significantly to second generation business failures Reasons for relationship deterioration are examined along with suggestions for research to confirm or disprove the authors propositions in this area INTRODUCTION The death or retirement of the first generation family business owner is often fraught with peril It is at the point of transition that many successful enterprises begin a period of stagnation and decline Birley 1986 Handler 1990 One of the primary reasons for the difficulties experienced during succession is the founder s unwillingness or inability to prepare the next generation for the leadership position Churchill Lewis 1983 Dyer 1986 Levinson 1971 As a result the successor s poor leadership and organizational skills have generally been associated with the decline in the business Ibrahim Ellis 1994 An issue not often discussed is the successor s ability to maintain the unique relationships that have developed between the creator of the business the entrepreneur and his her customers employees and suppliers These relationships may be



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