STORRS, Conn. (AP) – At a time when most people are enjoying their retirement, 73-year-old Stephen Altschuler is grappling with his company’s future – and his family’s role in it.

Altschuler founded an electronics assembly manufacturer 34 years ago and built it into a company that now employs 96 workers. Based in Torrington, the privately-held Altek Electronics Inc. makes circuit boards and electronic assemblies for original equipment manufacturing companies, primarily in Connecticut.

Preparing to hand his company over to the next generation has been a source of stress for Altschuler and his two children, who are vice presidents of Altek Electronics. The family hired an outsider with experience running manufacturing facilities six years ago to help settle future ownership issues.

“Most entrepreneurs don’t ever want to let go of their business ever,” said Altschuler’s daughter, Sabrina Beck. “Children want the opportunity to take the steering wheel and drive the car.”

Conflicts in family firms are common. Up to 90 percent of businesses in the United States are family-controlled and more than one-third are expected to go through ownership changes in the next five years due to retirement, according to the University of Connecticut’s Family Business Program.

UConn and other universities have established programs to help family-owned businesses mediate such conflicts, which can cause turmoil for the family, employees, suppliers and customers.

“It’s less like therapy and more of having the difficult conversations and discussing the undiscussable,” said Michael Stern, who runs a consulting group and works with the Family Business Program.

The UConn program, part of the School of Business, offers itself as a “think tank” for family business owners, successors, family members and non-family managers. It helps family-owned businesses wrestling with thorny problems such as how to promote, demote or fire a family member.

Academic interest in family-owned businesses has gone worldwide. The University of Pennsylvania’s Wharton School has launched the Global Family Alliance to research and share best practices of family enterprises of “substantial net worth.”

“We know very little about corporate governance vs. family governance,” said Raphael Amit, chairman of the Global Family Alliance executive committee. “We need to look at families from around the world.”

Ira Bryck, director of the University of Massachusetts Family Business Center, a continuing education program, said his service is “therapeutic, but is not therapy.”

“Where family businesses are closely held, businesses and secrets are closely held, there’s a certain secrecy, a certain shame that our family is dysfunctional when all families are dysfunctional. When you get over that you can think more creatively,” he said.

At Altek, the Altschuler family decided to share ownership with Richard Razza, hired in 2000 and soon promoted from production manager to company president. He also mentors Sabrina and her brother, David Altschuler.

“That took some of the heat off the relationship with me and my kids,” Stephen Altschuler said.

The company also posted a “perpetuation plan” on its Web site to reassure vendors and would-be customers that the company would continue after Altschuler’s departure.

University mediation programs help family-owned businesses through personnel and staffing issues, in addition to issues of who will eventually run the firm.

“As a parent you want to support or enable your child, but as a boss you may have to fire your child and bring in better management,” Stern said.

Other issues focus on whether entering a family business is a birthright or a reward based on merit, Stern said. And compensation can be a problem, too.

“Parents frequently tend to give kids equal amounts for Christmas and Hanukkah, but do you pay an office manager the same as a sales manager or do you pay the market rate for those positions?” he asked.

Companies founded as family enterprises run the gamut from titans such as Wal-Mart and Ford Motor Co. to the local hardware store. While many publicly traded businesses have escaped the stresses of family personalities and relationships, far more firms still feel the pull of pressures among parents, children and other kin.

Richard N. Dino, associate dean for graduate programs at UConn, said succession is among the most complicated issues family businesses confront “and if not done correctly, leads to the demise of the company.”

David Altschuler, a vice president of Altek and the son of the company’s founder, is practical in one detail in the operation of his family business: He calls his father by his first name.

“At work I call him Stephen. At Christmas I call him Dad,” he said. “We try to remain professional in the company. Sometimes we succeed. Sometimes we don’t.”


Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.