Family businesses in Bangladesh are reaching higher levels than the international average despite facing challenges in such areas as skills, efficiency, innovation, domestic competition, soaring prices of energy and raw materials.
Speakers at a session on "Challenges and Opportunities of Family Business" made the comments while appreciating the local family businesses Square Group, Transcom Group, ACI Group, Rahimafrooz Group, and Apex Group for setting encouraging examples in this regard.
A report by McKinsey & Company on family-owned businesses notes that family businesses are now stronger, more vital, and more important than ever before, with an estimated share of 70 percent to 90 percent of global gross domestic product.
Around one-third of Fortune Global 500 companies are either founder-controlled or family-controlled entities, which are 40 percent of all major listed companies in Europe, says the report.
Family businesses are especially important in emerging countries, where 60 percent of private-sector companies with revenues of $1 billion or more are family businesses, according to the findings of the report.
Families run 85 percent of businesses in Southeast Asia, 75 percent in Latin America and 67percent in the Middle East.
With growth in emerging regions and countries, McKinsey expects the influence of family businesses to expand as more such businesses will become leading companies in the next 15 years.
In the Bangladesh context, the country will need to explore ways of ensuring that it flourishes optimally, said Golam Mainuddin, chairman of British American Tobacco Company.
Mainuddin, who is also vice-president of the Metropolitan Chamber of Commerce and Industry (MCCI), held out an assurance of MCCI's continued commitment to developing family businesses and taking the overall business environment of the country to newer heights.
Issues such as owners' deaths, successors' indifference and involvement of spouses of next-generation family members could often determine the fate of a family business, Dr Girish Bagale, Chairperson at Pravin Dalal School of Entrepreneurship and Family Business Management, Narsee Monjee Institute of Management Studies, Mumbai, said in his keynote presentation.
Bagale also pointed out that most family businesses did not survive beyond the third generation.
To ensure success, family businesses require a thorough understanding of the complexities involved and sets of strategies that are different from non-family businesses, he elaborated.
Bagale also recommended having clear succession plans and advisory boards for ensuring the best performance of family businesses.
Siddhartha Biswas, vice-president of Dun and Bradstreet South Asia, said Bangladesh needed to diversify its industries and reduce its heavy dependence on the apparel sector in order to maintain its recent success.
The speakers, at the discussion on Saturday at the MCCI Gulshan office, also addressed the issue of tough choices such as whether family businesses should be run by professionals or solely by family members, the degree of control the next generation is allowed by the previous generation, the ways in which next-generation family members could be optimally trained in managing the business.
The MCCI, in collaboration with Dun and Bradstreet South Asia Middle East Ltd, organised the event. The session was chaired by Golam Mainuddin.