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Business Times - 11 Jan 2011
COMMENTARY
A to Z of a family business
The dynamics of this form of business institution need sensitive handling and understanding to ensure its longevity
By ROGER LOO, Director, Marketing & Business Advisory Group and NG BAO CHERN, Consultant, BDO Consultants Pte Ltd
THERE is an old Chinese saying that the wealth of a family is not likely to last more than three generations. That this is at least partially true is evident from business bureau statistics the world over that show it's not uncommon for family-run businesses to start floundering in the third or fourth generation.
Part of the problem could be the perceived "monarchical" business framework, where passing the reins of ownership and management is based on blood rather than merit. While family businesses drive the social-economics and wealth creation of the Singapore economy, there is little research being done in the area of sustaining the competitiveness of family businesses in the face of globalisation all around the world.
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