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THE VISION The family strength


UK research shows employees are happiest in family businesses. Zinzan Cunningham looks at how this research might inform family businesses in Asia.


N


ew research into the relationship between employees and managers finds that employees are happiest in family-run businesses compared to those in other firms.


The Institute for Family Business (IFB) Research


Foundation with UCG report – produced by Cass, Warwick and Birmingham Business Schools – finds that people working in family-owned and family- managed businesses are more satisfied with their jobs, giving these firms an advantage when recruiting and retaining staff. The United Kingdom’s three million family


businesses currently employ over nine million people and constitute 40% of total private sector employment. The report, ‘Family Business People Capital’, finds


that employees in family businesses: ƒ are more likely to regard their managers as good at responding to suggestions and allowing them to influence final decisions ƒ are more likely to report managers can be relied on to keep their promises and treat employees fairly


China family business suffer under the second generation


The 2013 Family Business Report released by Forbes China suggests the second generation of family businesses in China are inferior to the first generation.


“The disparity is extremely noticeable this year,” said Zhou Jiangong, editor-in-chief of Forbes China. “But, looking globally, the less satisfactory performance of the second generation is quite normal. The younger generation is not as strong as their predecessors in terms of entrepreneurship.”


He stressed that timing was a large factor ofg ther findings: many family businesses formed in the 1980s as China’s economy began encouraging some private ownership and control were passing on control during the downturn of the GFC.


34 FAMILY OFFICE: THE FUTURE


ƒ report greater job satisfaction with regard to the sense of achievement they get from their work, the scope they have for using their initiative and the amount of influence they have over their jobs ƒ report greater loyalty to their business ƒ are more satisfied with their job security. Mark Hastings, IFB with UCG director general, says


family businesses are the backbone of the UK economy and have a distinct competitive advantage. “The research indicates that motivating employees


is not just a matter of reward,” says Mr Hastings. “It is closely linked with inclusive decision making and having a clear set of values and shared objectives between managers and employees. It is clear that the strong family values and connections in family firms make a real and positive difference for employees.” The report also identified a number of areas where


family businesses need to improve. The study found that family businesses were less likely to have formal HR structures in place and tended to offer fewer training opportunities.


Room for improvement ƒ Owner-managed family businesses provide less training for employees than non-family owned businesses. ƒ Family businesses report lower financial performance and have fewer of the HR best ƒ Family businesses are less likely than non-family owned businesses to have an HR strategy to improve people capital. There was also a difference between owner-managed


businesses and those firms that were only owner- governed – with employees reporting more positively when managed directly by the business owner. Professor Nick Bacon, Cass Business School, part of


City University London, says the ‘family business’ model has clear advantages when it comes to managing and motivating employees, even when they lack the formal HR structures one might expect to see in place. “However,” says Professor Bacon, “when owners step


back from managing business directly, and became governing owners, the lack of formal HR structures becomes more of a problem.


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