The main purpose of the paper is to study and analyze the formation and pursuit of the family businesses in Venezuela and the United States and the specifications of these regions within the business sphere. As it can be seen, the region of Latin America is different from the other areas in the business sphere as the majority of all the big business organizations are ruled by one or several closely connected families. Therefore, family business sector represents a serious part of all the spheres that produce goods and services in the region. The situation in the United States is similar as there is a particular number of the family-run businesses that are also dominant in the business sector of the North America (Weinmann, Groth, 2011). There are many differences and similarities between Venezuela family business and the family business in the United States due to the specific political, economic, cultural, and social situation in these courtiers that has a serious impact within this area.
One of the most outstanding notions concerning the business sphere within the region of Latin America is the fact that despite all the changes that the region has faced in political and economic spheres in the last decade, the family business still has dominance in the private business sector. The main reason of the success of the family business organizations is that they base on the strength and power of the extended family that highly supports the stability of the company and the close ties among the company leadres. This is extremely important within the entrepreneurial environment where the uncertainty is the most typical feature; therefore, undefined character of business makes it less flexible and stable. That is why big family companies keep their strong position in the market. In particular, Venezuela is one of the countries in the region where family business represents the decisive part of the economy as it takes more than 80% of the business sector. Here, the connection between the family interests and business interests results in the strong motivation for the enlargement of profit of the company (Stern, 2007).
The growth of the family business in the developing countries, especially in the region of the Latin America, is based on the investments that the business has been making into the industrialization of the country. This policy was beneficiary for both the countries and the companies and resulted in the positive outcome for the development of the state economy and the most important industries such as steel or the heavy metals. At the same time, the conditions for the development of the private business sector also improved. In addition, the development of the series of new small private businesses made them the creditors for the series of local companies that also supported their growth and influence in the business sphere. Venezuela has the group-oriented culture, and that tendency affects the business sphere. The whole social environment is more favorable to the family businesses that represent the traditional system of how the relations have to be established not only between people, but also between companies. The serious support is given to the family business from the government authorities. The recent shift of power connected with the death of Hugo Chavez, who has been the president of the state since 1999, is now regarded as a beneficiary change for the business sector of the country (Morrison, 2013). However, the recent claim of the finance minister of the country has stated that although the new government has made a lot for the improvement of the life of people, there is a series of important structural problems within the national economy of the states that has not been solved. This makes it extremely difficult for the family business to develop and to be able to stay strong within the market. The new challenges that are currently present in the national economy of Venezuela are checking the real value of the biggest companies launched by families in Venezuela that creates the specific environment favorable for the survival of the fittest. The additional problem for the organizations is created by the necessity to invest money in the national economy in order to support the stability of the level of the national economy (McCaffrey, Dorobat, 2013).
As one of the strong regional states, Venezuela pays a lot of attention to the development of its economy as the stability and prosperity of this economic sector is essential for the developing country. The changes in the distribution of the financial resources together with the continuation of the spending cuts policy will result in the improvement of the national fiscal policy that is extremely important for the development of the state’s economy.
Talking about the general framework of the family business sector in Venezuela and the United States, it is necessary to mention that in both counties, it represents more than 80% of the whole business sphere. More than 90% of all private businesses in Venezuela consider themselves to be the private organizations within the state. At the same time, more than 90% of all the businesses in North America are run by the United States family businesses, 85% of which claimed that the successor of their business organization will be the family member (Cambieri, 2013). This supports the similarity regarding the closeness of the family ties within the family business sphere in Venezuela.
The general advantage that makes it possible to establish the family business in Venezuela is the group-oriented society and culture. The establishment of proper relations with people inside the country can be the perfect base for the future business development. The individual targets and goals are considered to be less important than the common aim. This attitude also produces the advantageous climate for the development of the family companies. The local business culture defines the importance and respect of the person basing on the image of the individual (Katz, 2008).
Comparing the Latin America and Venezuela within the sphere of the development of the family business sector, it is necessary to mention that the region is highly favorable for the development of the companies that are being settled and run by the members of one or several families as it can be seen that the same statistics is represented in Brazil, Columbia, Argentina, and even Chile. More than two thirds of all the businesses that are being held in the region are family businesses, and the majority of them are big, well-developed region business leaders with the stable growth of profit and the enlarging business network. Therefore, we can see that Venezuela is not different from its neighbors in the high level of the family business development; the same can be said about the Untied States that also have the significant number of big companies run by the members of the same family.