Family harmony is key to survival in business
Muscat, January 16, 2011
The most successful family firms are those in which there is a good balance between professional management, responsible business ownership and a harmonious family dynamic, a recent PwC survey has revealed.
At a briefing in Muscat this week, PwC revealed further key findings at the Oman launch of PwC's Annual Global Family Business Survey.
The survey aimed to find out how family businesses are coping with the economic downturn, what problems they are facing, and how they are preparing for the future.
“Generally the family businesses in the Middle East have been less vulnerable to the economic downturn since most of them, over time, built considerable reserves and also have been conservative in their business strategies,” said Amin Nasser, PwC Middle East family business leader.
“However the financial institutions in the Middle East have been demanding increased transparency and formalised ownership governance as well as management structures in respect of the family businesses. Consequently we are likely to see a decrease in 'name lending' by the financial institutions.”
“The most persistent problem and the biggest challenge for family businesses is the issue of succession.” added Nasser.
Although more than a quarter of the family businesses in the PwC survey are expected to change hands during the next five years, almost half of these companies do not have a succession plan. Families in the Middle East have not yet fully adapted the modern global corporate culture. In particular there seems to be a reluctance to giving up boardroom control and comply with the strict requirements of transparency and corporate governance.
The importance of PwC’s Annual Survey is of significant local relevance, given the fact that there are in excess of 60 family-owned businesses in Oman, he said.
“The objective was to consider the findings of this global PwC survey and how they apply specifically to family businesses in Oman,” added Kenneth Macfarlane, PwC Oman country senior partner.-TradeArabia News Service