By Burnett Munthali
I have been wondering for quite some time now why some families are always successful in what they do even if the bread winner in that particular family grows too old to work or dies. I discussed this issue with a friend and in particular I referred to the Asian community living in Malawi. He said to me that the Asian community does well in their family business because they train they children well in their life long career.
I decided to find out more on this subject hoping I would get a different response. I spoke to Muhammad, an Indian boy aged 10 so he could tell me what he knows about business in their family. I was amazed to hear that the family started raining him in business at the age of 8 years, precisely, that is when he was in standard 4. The Asian community in Malawi is well known for doing business that can survive for a lifetime.
There’s one prominent family of Pakistani origin that came to Malawi in 1901 and are still living here. They have established themselves all this while from their grandparents, parents and now the children are still doing business very successfully.
Family business
First, Family businesses have the advantage of a shared history and a sense of trust that can help them navigate difficult situations. However, it’s important for family business owners to set clear boundaries between work and family life to avoid conflicts and ensure the business’s success.
Second, in a family business, the relationships are already solidified, which can promote cohesion and camaraderie behind-the-scenes (though not always). In addition, families often exhibit lenience and acceptance of each other’s personality quirks, which is advantageous in managing workplace conflicts and obstacles.
We’ve rounded up eight tips to ensure your family business, or the one you may be working for, endures through the generations. Communicate. Evolve. Set boundaries. Practice good governance. Recruit from the outside. Treat employees like family. Make it optional. Plan for the future.
Third, essential to all business organisations, trust is a unique and very evident in most successful family-owned and -run firms. Because trust is a given, with inherent trust among family members, the business’s leadership can talk, discuss, and disagree more openly and freely .
Fourth, family businesses outperform others because they take a long-term perspective and reinvest in the business. Leaders of outperforming FOBs cite their long-term perspective as one of the top three reasons for their success, alongside the ability to innovate and to expand into new markets and regions.
Fifth, family-owned businesses employ 60% of the US workforce and create 78% of all new jobs. Family businesses generate 64% of America’s Gross Domestic Product (GDP).
Sixth, What are the key factors that influence the longevity and success of family businesses? According to reports, three key characteristics help to sustain their success: a strong entrepreneurial orientation across the generations; family connection and attachment to the business; and ambitious next-generation leadership.
Family has a role in entrepreneurship development. In fact, family members act as positive educational models, which can contribute to starting a business and successful management (Steier, 2003; Arregle et al., 2007), through knowledge and values that are handed down to the children become their human and social capital.
Finally, family businesses outperform other non family businesses for various reasons. Their long-term orientation and patient capitalism helps them assign greater significance to long-term gains compared to short-term returns. Long-term orientation of family business facilitates radical innovations which require longer time horizons to fruitify and earn profits.
