Corporate Governance Challenges in Family-Owned Luxury Businesses: Balancing Tradition and Modernization

Abstract

This article delves into the complexities faced by family-owned luxury businesses in establishing effective governance structures. It explores the significance of finding the right equilibrium between tradition and modernization to ensure sustainable growth, competitiveness, and continued success in an evolving luxury market. The importance of family-owned luxury businesses in the global luxury landscape cannot be overstated. Their timeless creations and dedication to craftsmanship have captured the hearts of consumers for generations. Yet, as these businesses evolve and expand internationally, they encounter a profound need to adapt their governance practices to meet contemporary demands while safeguarding their cultural heritage and core values. Traditional governance practices in family-owned luxury businesses often center around familial ties and familial decision-making structures. The close-knit nature of these businesses enables quick decision-making and a cohesive brand vision. However, it also poses potential challenges in terms of maintaining professional management, nurturing a culture of innovation, and ensuring transparency and accountability.