Tuesday 10 March 2009

Family businesses in strong position to survive downturn

Family businesses are well placed to weather the economic crisis, a Barclays executive said yesterday.

1 comment:

Guanyu said...

Family businesses in strong position to survive downturn

By MICHELLE YEO
10 March 2009

Family businesses are well placed to weather the economic crisis, a Barclays executive said yesterday.

They have competitive advantages, such as long-term generational thinking, compared with listed peers that tend to focus on short-term goals and quarterly reports, said Didier von Daeniken, chief executive of Barclays Wealth Asia-Pacific.

He was speaking at a news briefing on the findings of a study titled Family Business: In Safe Hands?

The study polled more than 2,300 high net worth individuals, of whom almost 300 were members within a family business.

Mr. von Daeniken said that in the current downturn, such businesses can tap the family network and wealth to ensure smooth cash flow, credit and, as a result, survival.

Also speaking yesterday was Randel Carlock, founding director of the Wendel International Centre for Family Enterprise at Insead (Europe and Asia).

He said there is better alignment of ownership and management in businesses in which family members share goals.

The global study found that Singapore family business owners place strong emphasis on family relationships and, as a result, are less motivated by money.

Enjoyment from making money was cited as the least important motivation for creating and protecting wealth (28 per cent).

A strong network and clear shared objectives among family members are viewed as key factors that can help family businesses endure the slowdown.

For Singapore family business respondents in the survey, the strong family support network is the biggest advantage of the family business model (55 per cent), while a sense of shared values and ethos comes second (45 per cent).

The ability to think long term is also a big advantage for family businesses in Asia, the survey found.

However, as emphasised by Prof Carlock, it is important in the current economic climate to ensure that family businesses have clear succession plans, which suggests a need for more educational opportunities in Singapore so that family businesses can develop the next generation.

With a long-term focus, steady leadership, a strong identity, a vision shared by a close network of family members and clear succession plans, Singapore family businesses will be in a better position to navigate the economic storm, the study report said.