The Church of ‘Scionology’

Season 6, Episode 18 On this week’s episode of Freakonomics Radio: if you’ve built a successful business — be it a bakery, a carmaker or a newspaper — who continues the legacy when you retire? For many Fortune 500 companies, the answer is obvious: one (or more) of your children take the helm. But let’s get beyond the nepotism and silver spoons, […]

The Church of Scionology

Season 1, Episode 1

About one-third of the companies in the Fortune 500 are family-controlled firms. Isn't that amazing? Isn't that fantastic?

You know the story. Some incredibly hard-working person starts a business – maybe a bakery or a brewery, a carmaker or a newspaper – and, against all odds, the business doesn’t just succeed; it flourishes. But someday, it's inevitable that the founder will retire (or die). So who takes over then?

That’s easy: the founder’s son or daughter. The scion of the family. Who better to protect and grow the family brand?

Makes sense, doesn’t it? Who could possibly work harder than someone whose name is on the building?

The family firm is a way of life. And it’s a nice story. But we’ve got a big, hungry economy here, people. “Nice” doesn’t necessarily generate jobs; "nice" doesn't increase productivity or spur innovation. So when it comes to putting the family scion in charge of a company, here’s what we wanted to know: what do the numbers say?