Margarita Tsoutsoura: Exploring challenges faced by family-owned businesses

Family-owned businesses dominate the economic landscape in the United States: Between 70 and 90 percent of all firms in America are owned or controlled by families. They generate 62 percent of the country’s employment and 78 percent of all job creation, recent data show.


Margarita Tsoutsoura

In 2017, Tsoutsoura became academic director of the Smith Family Business Initiative, which conducts research and provides classes, conferences, and roundtables on the challenges and opportunities of working with family-owned companies. The establishment of the initiative in 2014 was the major reason Tsoutsoura joined the faculty at Cornell, after teaching at the University of Chicago for seven years.

“It was a great opportunity to have the resources for research on family and private firms at Cornell,” says Tsoutsoura.

A native of Athens, Greece, Tsoutsoura grew up working for her father’s small business – a gymnasium – on weekends with her entire family. “It was nonstop involvement and constant thinking about it, with all the family involved to save money on hiring employees,” she says.

While earning her Ph.D. at the Columbia University Graduate School of Business, Tsoutsoura focused her dissertation research on the impact inheritance taxes have on family businesses in Europe. It is more difficult to study family firms in the U.S., Tsoutsoura says, because data on privately held businesses is scarce. One recently available source that allows observation of private firms’ data is controlled by the Internal Revenue Service, which only gives access to a limited number of researchers every two years. Tsoutsoura has applied, along with collaborators, to use its data for a project focusing on how the gig economy interacts with more traditional entrepreneurs.

Tsoutsoura believes the Smith Family Business Initiative will continue to generate groundbreaking research, new courses, and opportunities to interact with business owners, attract students and engage alumni. “For Cornell, it’s a great way for us to distinguish ourselves as a business school,” she says, “and make this a unique point on which the school provides insight and thought leadership.”

Excerpted from Faculty Spotlights, Ezra Magazine, May 2019. Written by Sherrie Negrea. 

Innovation in the Start-Up Nation

Reflection shared by Shiang-Wan Chin ’19

This past winter break of 2018 I attended the TAVtech Fellowship in Tel Aviv, Israel. The TAVtech Fellowship is a selective, four-week educational program based in Tel Aviv. Through an intensive curriculum and wealth of cultural and professional experiences, Fellows are able to broaden their understanding of technology development in a global setting. Fellows have the opportunity to meet with Israel’s top entrepreneurs, venture capitalists, and successful business leaders to gain perspective from some of the Start-Up Nation’s most talented individuals.

Upon the return from Israel, I am committed to sharing my experience and what I learned. Through this exchange of promoting cross-cultural collaboration through technology, I learned three concepts during my time in the Start-Up Nation:

1. Hutzpah – This is a concept that permeates throughout the nation. Israelis are very direct, and they have no shame in getting any task done. For example, while waiting in line to pay for my groceries, I was cut in line by a mother and her infant daughter. She casually tipped over the baby’s stroller to get in front of me to pay!

2. Nationalism – Since all Israelis are required to serve in the military (3 years for males and 2 years for females), everyone has a strong sense of pride for their country. In addition, military ranking is more highly regarded than traditional college degrees.

3. Highly Technical – People in Israel are specialized in two complex technologies, blockchain, and cybersecurity. As such, they don’t have great customer service skills or brands and if they do, it’s not highly publicized. For example, did you know Waze is an Israeli founded company?

This experience allowed me to build on my classes at Cornell to pursue my aspirations in entrepreneurship. This experience came full circle this past month during the Cornell Digital Agriculture Hackathon sponsored by Microsoft, Cargill, and many more, where my team and I won first place for social impact! I fused my background at Deloitte, undergraduate agriculture economics degree from UC Davis, technical skills learned in Tel Aviv, and systems engineering to create farmVal. My team and I are taking a unique approach to agricultural credit evaluation. We leverage big data and our machine learning model to consider indicators such as agronomic performance, experience, growth potential, and sustainability to create a credit profile for farmers.


At the 2019 Entrepreneurship at Cornell Celebration, Shiang-Wan Chin ’19 and his farmVal team won first place in the Cornell Big Idea Competition

This experience studying abroad to learn practical skills to complement what I am learning here in the classroom and it would not have been possible without the generous support of the Smith Family Business Initiative at Cornell University.

Shiang-Wan Chin ’19 was the recipient of a $500 SFBI grant that helped make the trip to Isreal possible. As of April, Shiang shares that he has talked to his family about joining their family’s business, Happy Lemon

Startups and Family-owned Business: Siblings?

Consider this, most companies around the world are controlled by their founding families, including more than half of all public corporations in Europe, and more than two-thirds of those in Asia. Even in the United States, where ownership dispersion is at its highest, founding families exercise a significant degree of control over more than half of all public corporations.

Like siblings, startups and family-owned businesses have more in common than you might think.  For one thing, the success of each is extremely dependent upon relationships.

“Relationships are key and a true engine to entrepreneurship because all founders need others working with them to succeed,” said Daniel G. Van Der Vliet, the Executive Director of the Smith Family Business Initiative (SFBI) at Cornell University.


“Nearly 48% of all entrepreneurs came from a family business – they learned how to run a business first hand, at home. In addition, nearly 85% of all entrepreneurs engaged their family in some meaningful way in the first three years of business,” Van Der Vliet continued.


“I was 14 when I started working in the family business,” said Adriano Campos, MBA ’19. “At age 19, while pursuing my undergraduate degree, I started working at General Electrics in Brazil.  It was there that I noticed that people make the company. I came to Cornell to because of its high rankings, the number of investment courses, and the emphasis on family business. It was here that I starting thinking about succession planning.”

Adriano Campos, MBA ’19 – Adriano is a second generation of Fundimig, a 33-year old foundry specializing in cast iron parts for automotive and agriculture industry. His family also owns Collortex, paint stores founded by his mother. Adriano co-founded AB Campos, a group of franchise stores in Brazil.

As family members become eligible to come into the business, there needs to be a process for managing those changes, explained Van Der Vliet. “30% of family businesses make it to the second generation, 12% make it to the third generation, and less than 4% make it past the fourth generation. As businesses go through and succeed from generation to generation, they start to become a little more complex,” said Van Der Vliet.

Christina Chen, MBA ’19, was born into a large, complex, family-owned conglomerate. Her role, and that of her siblings was assigned, by her father, to fill a specific niche.


“Among my most valuable experiences at Cornell, was attending a [SBFI sponsored] Women ’s Round Table in NYC, followed by taking a Women’s Leadership course. [These experiences] helped me resolve how to talk about biases in society which may overlap with family pressures about what role a daughter may play in the company,” said Chen. Bridging her MBA studies with the family hospitality business, Chen is now starting a consulting company focused on efficient hotel operations.

Christina Chen, MBA ’19 – Born and raised in Los Angeles, Christina’s family business is the Xianglu Dragon Group which owns and operates several subsidiaries in: petrochemicals, resin, chemical fibers, real estate, and hotels in Asia and the United States.


“Like all entrepreneurs, family business owners need to innovate, change, and stay current,” said Ben Rashbaum, MBA ’19, who is a current member of eLab and founder of Strauss.  His startup will modernize his family’s life insurance brokerage business by making it easy for people to purchase life insurance online. 

Ben Rashbaum, MBA ’19 –  Is a third generation Cornellian and the fifth generation to enter the family’s life insurance brokerage business – The Strauss Agency. While at Cornell, Ben participated in eLab, a year long course that helped him develop his new business idea which he hopes to take back to his family business – or launch his own new business.

Margarita Tsoutsoura, the John and Dyan Smith Professor of Management and Family Business at the Samuel Curtis Johnson Graduate School of Management joined Cornell in 2018.  In addition to  several on-going research projects studying family firms and privately held firms, she teaches NBA 6720 Managing Family and Privately Held Firms

 “The course provides students with exposure to the unique finance, governance, and management issues faced by family firms, and ways in which these issues can be addressed,” said Tsoutsoura.  “As an MBA elective, it is designed for students who may be considering working for, or who are already involved in, family firms and closely held companies. In some cases, the student’s career will place them in a position to do business with family firms, consult to them, invest in them, work with them in private wealth management, mergers, and acquisitions, banking, consulting, etc.”


“What is important to understand, is that entrepreneurship and family business are not mutually exclusive. The role of family in developing entrepreneurs, from start-up through each level of growth, is well researched. As well, any future generation of a family business needs to be thinking about how to constantly be an agent for change and adaptation to keep the enterprise successful and growing.”

Written by Debra O. Eichten, excerpted from ESHIP Magazine – Spring 2019 

Who is Mentoring Who?

On Friday, March 8, the Smith Family Business Initiative hosted the Sam Seltzer ’48 Mentors Forum, at the Cornell Tech campus in New York City. With 18 mentors and 16 current students and young alumni in attendance, we had an amazing collection of talent, diversity, and curiosity in one place, for one day.

The Sam Seltzer ’48 Mentors Forum provided current Cornell students and young alumni from a family business with the opportunity to engage, one on one, with alumni, Cornell Family Business Scholars, advisors and family business leaders. Students were able to select their own agendas and specific areas for exploration during the time they spent with each mentor. Jessica Green, ’15, of Cowbell Brewing, was impressed with the assembly of mentors and mentees; “It was an honor to mentor alongside such accomplished and esteemed professionals, and to interact with such passionate, interested and intelligent students.”

The Sam Seltzer ’48 Mentors Forum served several purposes. First, it gathered a wealth of knowledge, allowing students to explore and delve into many areas of curiosity. Second, it exposed students to the benefits of seeking outside advice. Too often, families look inward for answers and fail to engage external expertise. Finally, it strengthened our family business network of alumni, students and business leaders. Making these connections, many that will extend beyond today, provides access to leading experts from across industries and backgrounds.

Mentoring is a two-way street. The mentors who volunteered to spend their day giving back, did so because they understand the value of mentoring and coaching. For the mentor, it is not uncommon that they discover just as much about themselves as they do about the mentees during the exchange. Angie Sabel, Managing Director of Abbot Downing, shared, “There were times, many, that I felt I was the mentee during my 1:1 sessions where I was learning from their inspiration and energy. I truly value days like your recent Forum where there is a lively exchange of ideas and sharing of experiences.” 

For the mentee, most walked away with fresh perspectives and new relationships. Jacob Schwarz, MBA ’17, shared after the forum, “I received some fantastic advice, and will definitely be in touch with the folks I spoke to today. As I mentioned, it could not have come at a better time for me, as my mom is looking to start formal succession talks next week.”  Lounes Mazouz, MMH ’19 also conveyed his gratitude, “I have learned more than I could have ever imagined. Counting all the incredible takeaways would be impossible. However, I hope to keep alive my relationship with very valuable mentors and new friendships.”

A special thank you is on order for Sam Seltzer ’48, and Jason Fein SHA BS ’85, MPS ’91. Their support made the day possible. The 2019 Mentors Forum was truly memorable and impactful, for both mentees and mentors.

Some additional images of the Mentors Forum can be found here. 

Changing the Narrative

P2830716.jpgThe Smith Family Business Initiative hosted a roundtable led by some of the leading women across family businesses in and around New York as well as students of the Johnson School of Management. The roundtable was designed to celebrate the advancing female leadership in family enterprises as well as discuss compelling issues that continue to plague the journey of capable women leaders aspiring to scale new horizons. The roundtable was a splendid amalgamation of perspectives of women of diverse professional and academic backgrounds, age groups and sensibilities. A plethora of topics were touched upon ranging from implicit glass ceilings in family enterprises, issues around inheritance and mentorship. The overarching intent, however, was to encourage this changed narrative with women increasingly occupying key positions in the C suites of both private as well as public enterprises.

Historically, in many nations around the world, the conversation around inheritance of the family business and often the family fortune was restricted to the male off-springs. The women at the table admitted that their previous generation exhibited some inherent biases towards their male counterparts while they were given the leeway to “explore other professions” often implying a barrier to entry in the family business. This phenomenon gave rise to an implicit glass ceiling at the entry level in family enterprises for women. Many women leaders at the table felt that the gender stereotyping and disapproval is more intense in predominantly male drive industries like manufacturing and construction. The obvious outcome of this bias is the additional liability for women to prove their worth to their parents to earn their rightful seat at the table. The young blood at the table, although agreed with some of these historically derogatory trends, admitted that a wave of change is already underway. Women across the world are out to smash the glass ceiling through perseverance and confidence in every sector.

In many interviews, women are often asked how they manage to maintain a work life balance, but somehow men are never asked this question. Women are burdened with the unnecessary expectations to compromise their professional life to draw a balance in their personal life. But the distinction in family businesses between personal and professional lives is even more blurred so women across the world are using different tactics to counter these expectations. Women are increasing involving their families in conversations about their family businesses, especially when they are the only ones involved in the family enterprise in nuclear families.

Another critical topic discussed at the conference was whether parents can be effective mentors at family business. The unanimous conclusion at the table was to differentiate between parenting and mentoring. While parenting can mean providing general guidance to inheritors in paving their learning curve in a family enterprise, mentoring requires a more structured and objective approach. A commonplace conflict in family businesses is the tug of war between traditional methods of running the business versus the disruptive strategies newer generations bring. It is critical for the next generation women entrepreneurs to embrace some traditions to maintain efficient continuity and mutuality of respect with parents, but it is also critical for them to nurture their own style of working and effective outside mentorship can enable this aspect of small governance in family enterprises.

Overall, the experience of being at the table with successful and engaged women from the family business world was unmatched. Their professional tenacity and yearn to overcome every gender barrier and emerge as leaders worthy of emulation is remarkable. With roundtables like these, schools like Johnson are incubating next generation leaders of family enterprises across the world.

Surabhi Chaturvedi is a 2019 MBA Candidate in the Johnson Graduate School of Management. She represents the second generation in her family’s business, one of the leading Caterpillar dealers in India.

Family Legacy: Privilege or Burden?

P2830846Held in M&T Bank headquarters in New York City, the Women and Family’s Business Roundtable was an intimate session with a group of 30 women in the various stages of their family business – running it, exited in, thinking of entering it and so forth. What united the entire group was the privilege and probably burden, of being part of a business legacy.

The morning opened with welcome remarks from Kimberly Eddleston, ’95, Cornell Family Business Scholar, Professor of Entrepreneurship, D’Amore-McKim School of Business, Northeastern University and Daniela Scur, Postdoctoral research fellow, MIT Sloan School of Management. Both of them touched on the challenges and difficulties that as a female faced in family business succession, and how can one overcome that. Each participant chimed in on their own experiences, and how each of them came into the business in their own way and the extra effort they had to put in, just to prove their capability to manage or run the business.

The second session was moderated by Margarita Tsoutsoura, Cornell University, and Stefanie Kasselakis Kyles, Vassilaros & Sons Coffee, and they discussed how in family businesses, the lines between work and family were often blurred. The daily operations and problems at work were often brought up at the family dinner table, as recalled by another participant, Surabhi Chaturvedi, MBA 19’. This allowed the next generation to develop a keen sense of what running a business meant, at a very young age. However, working with family had some drawbacks too, as shared by Stefanie. She mentioned how everyone in her family called her about the business, at all hours, to share their opinions, despite not being directly involved.

During lunch, Niki Russ Federman, from Russ & Daughters shared her own personal story of how she came to enter her family business, started by her grandfather with simply just a pushcart. Everyone’s story is truly different, and hers was one of self-discovery and meandering paths before she finally came back into the business. Russ & Daughters is one of my favorite restaurants in the city, and to hear the legacy and heritage from her perspective is truly like reliving a piece of New York City history. She said – “I’m so glad that my mother had the foresight to save her part of the business so that it gave me an opportunity to return when I wanted to.” That truly left an impression on me, that her mother gave her a chance to come back to the business when Niki was ready. Whether we admit it or not, we truly are products of our families, parents and their efforts.

After lunch, Alvina Lo, Chief Wealth Strategist from Wilmington Trust discussed her experience in advising clients on setting up trusts and foundations. It was truly interesting to hear perspectives from various spectrums: with a structured and formal approach to encourage the next generation (as shared by Kelsey, the 4th generation in her family business); to a more informal way, as told by Chelsey Kingsley, CEO of Kingsley Made, by simply having conversations with her children and instilling in them a sense of ownership through seeing furniture manufactured by the company around Ithaca.

The last session of the afternoon was led by Kimberly Eddleston, Northeastern University and Niki Russ Federman, CEO and Owner, Russ & Daughters, who discussed how female leaders impacted the business differently. It was clear that females had made strides in the corporate environment over the past decade, yet so far from having an equal number of females in the boardroom, and as senior executives. The participants also brought up how being in a family business could possibly be advantageous for females to advance professionally, as opposed to being in the traditional big corporate environment, as being in a smaller environment required each individual to be more flexible with all kinds of roles and allowed individuals to take on more responsibility.

Overall, I found the entire day to be extremely invigorating, and it was really interesting and insightful to hear so many different perspectives on the changing role of females in family businesses today. In Asia, where I’m from, many family businesses still are figuring out their governance structure, and how to successfully transition from one generation to the next. Listening to these women in the roundtable, who manage family and business so well, has been very encouraging, for my own personal journey forward in figuring out how to balance and integrate both professionally, and personally.

Jade Neo is a 2019 MMH Candidate at Cornell University, as well as a 2019 MBA Candidate at CEIBS in China. Her family’s business, Hai Yong Engineering, started by her father, is in the construction and real estate business in Singapore.