Family businesses better

CHENNAI: As businesses struggle to create revenues, the family business model remains more robust in the face of an economic slowdown and the Eurozone crisis. "By operating a different management style focused on long-term investment, family businesses are outperforming public companies, thus proving to be very successful," a recent report by Credit Suisse Research Institute and Ernst & Young revealed.
The research is based on a survey of members of the Family Business Network International (FBN-I) from across 33 countries. Around 21% of the survey respondents are from emerging markets in Asia Pacific, Eastern Europe and Latin America, while 79% are from developed markets mostly Europe. The report dwells on the attributes of listed and non-listed, small and large and young and old family businesses, and considers the contemporary macro issues as well as the structural ones faced by family businesses, such as sustainability and governance and the human capital challenges of succession and talent management.
"The family business model -centred on a longer-term focus, cohesion and awareness of sustainability issues, and an emphasis on the importance of product quality - is not only proving to be a vital engine of economic activity, but also the antidote to some of the structural failings uncovered by the financial crisis," Michael O'Sullivan, head, portfolio strategy and thematic research, Credit Suisse Private Banking said.
The survey findings also show that family businesses are keen to expand and develop new ideas and all the respondents have expansion plans in place. New products and services, along with increasing market share, are the main focal points for the businesses, while more than 50% of respondents also plan to expand into new countries.