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FUTURE PLANNING A


t a time when substantial sums of money are invested in education and initiatives to engender a global entrepreneurial culture among the next generation, the simplest and


most cost-effective laboratory is often overlooked. For decades family businesses have been relegated to the shady corners of entrepreneurship, with analogies to bad soap operas and the fall associated with infamous dysfunctional dynasties. Family businesses certainly have very high failure rates, with 30 per cent in Australia surviving to the second generation and just 15 per cent to the third generation. The businesses are scrutinized for these high failure rates, often attributed to tension and discord combined with nepotism and conflicts. However, the positive experiences of family


firms create an environment ripe in entrepreneurial opportunities. The clichés about business meetings dominating mealtimes and the obsession about business and the subsequent lack of a work-life balance all create ripe conditions to nurture entrepreneurial attitudes towards life. This happens as the young apprentices learn to assess risk and develop a respect for money and hard work. As entrepreneurial attitudes remain high on business and social agendas, family businesses are experiencing a renaissance. Despite their high failure rates, the family businesses that do survive outperform non- family businesses during recessions. The characteristics promoting the survival and flourishing of family firms – deferred gratification, loyalty, veneration of elders – are all consistent with cultural values maintained across Asian societies, and serve to reinforce the DNA of business success.


Women promoting philanthropy The changing nature of the business environment is reflected in the composition and activities within family firms. There is a quiet revolution occurring in the increasing role of women in business. The increased opportunities, combined with girls outperforming their male counterparts in education, have led to a more skilled talent pool for family firms. The traditionally held view that daughters were ineligible for heading family businesses has been challenged by the presence of women in senior leadership roles across multinational firms. As more women take the helm of family businesses, there is evidence to suggest that female-run family businesses perform better than those under male stewardship. The traditional role of women in family firms has


been to support the public persona of their husbands in pioneering the business. Internally the women are crucial cogs, taking on accounting roles, personnel issues, operations and management. The hidden position of women in family firms is also their strength, as they are able to exert their power using emotional work techniques. This may well include negotiating among family members, cajoling and bridge-building to keep the business and the family intact. The role of a buffer, often adopted by a mother, is critical to the


survival of any business, and is a particular characteristic associated with family business by virtue of the emotional foundations within the family. The other role routinely allocated to women in family


firms is now commonly known as a philanthropic arm, previously described as the social welfare role. As businesses recognize the need to embrace and demonstrate a more ethical approach, philanthropy along with corporate social responsibility have become buzzwords. Philanthropy is integral to the operations of family firms, who often have deep ties with their local communities. Respect and tradition are cultivated as deeply as business performance. The involvement of daughters, sisters and mothers in philanthropic activities can provide a seat on the board, and this in turn creates a legitimate route through which women become part of the board-based decision-making process, creating greater empowerment and advancement for women. The situation is win-win – diverse boards are found to be


far more productive and beneficial for the performance of the company. Philanthropy is deeply ingrained in the activities of family firms, and is so closely aligned to the reputation of the family behind the business that it is often on a par with the activities of the business.


“As more women take the helm of family businesses, there is evidence to suggest that female-run family businesses perform better than those under male stewardship”


Redistributing roles As the ethical dimension of businesses become even more integrated into the operations and culture of family businesses, the traditionally described female roles will become increasingly important. Social and economic empowerment of women across Asian cultures, combined with higher educational qualifications and external career opportunities, have certainly meant the roles at the head of the table are more likely to be distributed between women and men. Examination of the dynamics between fathers and daughters highlights a more enabling and far less confrontational relationship than between fathers and sons. The increasing presence of daughters in family businesses helps to defuse the tensions undermining their survival rates. Family businesses will face new challenges as Asian


economies grow, but they are also better equipped with resources drawn from the family pool. Family firms fill an indispensable role in incubating the next generation of entrepreneurs.


Dr Shaheena Janjuha-Jivraj is a senior lecturer in the Henley Business School of the University of Reading in the UK, and author of Successional Issues in Asian Family Firms. She was previously a senior lecturer in business and management at the Brunel University Business School in the US. She was named Professions Woman of the Future at the 2006 Woman of the Future awards.


FAMILY OFFICE: ASIA TOMORROW 81


OPERATIONS


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