Navigating the family business

It is estimated that 99.5 percent of businesses in the country are micro, small and medium enterprises, with many of them being family-run.

- FRANCIS J. KONG

These enterprises contribute significantly to economic growth, generating employment and fostering entrepreneurship across various sectors.

However, running a family business presents a unique set of challenges that differ significantly from those faced by large publicly listed companies. Below are some key dynamics and common challenges that define family-owned businesses:

1. The role of emotions

Emotions play a significant role in family businesses, influencing decision-making and sometimes leading to conflict. Family members bring personal feelings, long-standing rivalries and past grievances into business operations, which can affect objectivity.

Business decisions are often emotionally charged, prioritizing family loyalty over logic or professional expertise. This emotional involvement can make conflicts deeply personal, sometimes persisting for generations and affecting the company's overall health.

2. Centralized decision-making

In family businesses, decision-making tends to be centralized, often in the hands of the founder or a senior family member. While this can streamline processes and enable quick responses, it can also stifle innovation and limit growth if the decision-maker is resistant to new ideas or approaches.

The lack of a structured management hierarchy may result in key decisions being influenced by seniority in the family rather than merit or experience.

3. Blurring of personal and business finances