Article at a glance:

Who should—and shouldn't—run the family business

• Family-owned companies run by outsiders seem to be better managed than other businesses, while family-owned companies run by eldest sons tend to be more poorly managed. These are among the findings of a McKinsey study of 700 manufacturers in France, Germany, the United Kingdom, and the United States.
• Moreover, the relatively high share of family-owned businesses managed by eldest sons in France and the United Kingdom accounts for a sizable proportion of the lower level of managerial quality (and perhaps of performance) that we observe between those countries and the United States and Germany.
• Family-owned businesses should pay more careful attention to succession planning and resist the temptation to hand over control to a designated heir.