Professor Ajay Bhalla of the Cass Business School said: “James Murdoch’s resignation as chairman of BSKYB should come as no surprise. At this point, James Murdoch has first and foremost an obligation to preserve the Murdoch family’s wealth and reputation.
“Family objectives for wealth, status and power for present and future generations play a vital role in family-owned firms. However, this varies depending on the type of family firm. There are two types of family firms which are publicly owned. One where the family not only has the controlling stake but is also deeply involved in managing the business. The other is where the family may or may not have the controlling stake but is not involved in the business.
“So far the Murdoch’s have opted to be in the first category. What we are seeing now is a shift towards the Murdoch family taking a back seat in managing the businesses, and becoming the second type of family firm. In the current situation, the family has to maximize its wealth which has been tied in the businesses it controls. In the near future, we are likely to see the family opting for private rather public ownership - all in the name of family and the next generation.”
