A surprising reason for this respect in PricewaterhouseCoopers East Africa’s
Most Respected Companies Survey this year, is that East Africa’s business
leaders respect companies that are well-managed family businesses.
Let’s all hail the family controlled business (FCB), for they dominate
the world – well, the corporate world at least. The figures for FCBs are
both daunting and surprising, showing remarkable consistency across markets
and territories , including our East African region. Between 75% and 90% of
all businesses are FCBs; they employ around 75% of all workers; and they represent
the fastest growing segment of the corporate world. All great news you might
think . Until that is you look at the other statistics which are equally robust
and consistent:– that only one in three FCBs survive to the second generation
and only one in six reach the third generation. We undoubtedly have some excellent
FCBs in our region so there should be no automatic thoughts of impending doom.
But these stats cannot be ignored. This article seeks answers to two questions:-
what is it that that gives rise to this corporate bloodbath amongst FCBs?, and
how can FCB’s in our region position themselves so that they do not add
to these grim statistics?
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