Freakonomics Poll: Should You Give Your Kids the Company?

That’s the question we asked in our latest podcast and hour-long Freakonomics Radio special “The Church of Scionology.” You can download/subscribe at iTunes, get the RSS feed, or read the transcript here.

We posed this question to some true American scions: Dick Yuengling of Yuengling beer — a fifth-generation CEO — would answer yes. Two of his daughters work at the family brewery right now, and one will likely succeed him in running it. On the other hand, musician Peter Buffett — son of Warren — would answer differently.

What about you? Hypothetical or in real-life, what would you do with your business when you retire?

Would you pass your business to your son or daughter to own and operate?

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  1. Tree says:

    Who says the goal of someone handing their company down to their children is the *companies* success? What if the goal is to help their children (and grandchildren, etc) succeed?

    Recently you showed an article comparing the success of companies that were handed off to children of the founders. Where’s the one comparing the success of the children based on whether of not they had a company handed to them?

    Well-loved. Like or Dislike: Thumb up 8 Thumb down 0
  2. Andy says:

    Disappointed you didn’t give an option that promoted meritocracy as a viable succession plan.

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  3. Gary in Wisconsin says:

    I had a friend, who has since died, and he was a big buyer of businesses. He told me one of his key rules – Buy from the third generation. Grandpa started a good idea, and it grew. His sons typically took it over, but were not as motivated or as smart as grandpa. Then the grandkids wanted in on the “gravy train”, and were typically pampered and did not know or care about running a business, but they did know how to spend money. They had the toys that grandpa did not have, the big houses, expensive cars.

    When he bought from the third generation, he figured if the product or service was still solid, he could clean up the management mess. Oh, and he always got it for a good price, as the grandkids were so busy fighting over the scraps that were left, they did not negotiate well, nor did they know how to negotiate…

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  4. John says:

    There’s a radical difference between the two trades involved with the Yuengling and Buffett fortunes.

    The Yuenglings are upholding an old craft that goes back thousands of years.

    Buffett just makes money, which isn’t really much of craft when you get down to it.

    It’s worth considering whether the heritability of wealth arises from the nature of the business. Look at great sports families, which often easily pass along the family to the next generation (especially look at the NHL).

    I think the love of a skill, of a craft, goes a long way toward convincing the next generation to continue the family fortune.

    Money, of and for itself, isn’t much of a craft.

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