Family Business Survey 2012: Middle East
PwC Family Business Survey 2012 |
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What did 1,952 family business owners and managers in over 30 countries tell us was critical to owning and operating a successful family business? |
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Scaling up |
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The next frontier for more and more family businesses is overseas: 67% of respondents had some level of international sales in 2012. By 2017, that number will jump to 74%. |
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Skills |
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Family businesses face a significant challenge in finding the skilled outside talent they need to grow: 64% of them are planning to bring in non-family management in 2012. |
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Succession |
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While four in ten respondents will pass on both ownership and management to the next generation, fully 25% intend to pass on their shares but bring in professional managers, citing the next generation’s lack of skills. |
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Download the Survey |
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Read our report on what family businesses in 2012 are thinking and planning as they look to compete in an increasingly global marketplace. |
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Family businesses are thriving globally, and even more so locally
An impressive 83% of Middle Eastern family firms have seen growth in sales in the last year, compared with 65% globally. Only 9% of respondents in our region saw a reduction in sales in the last year, as against 19% overall.
Family businesses in our region are ambitious and planning for growth
23% of Middle Eastern businesses plan to grow quickly and aggressively in the next five years, nearly double the comparable number for the survey as a whole. A further 69% in our region expect steady growth, and only 2% expect to contract.
Globally, the economy is the key external challenge, but not in the Middle East
All businesses face difficulties in the current climate, but family firms in the Middle East are significantly less concerned about this in 2012 than they were in 2010, with the number dropping from 71% to 45% this year. The top three external issues identified by global respondents are market conditions (54%), competition (27%), and government policy and regulation (26%). In the Middle East the top three, by contrast, are government policy and regulation (46%), market conditions (45%), and competition (32%).
The ‘war for talent’ is still waging – both generally and in the Middle East
Attracting appropriately skilled staff, and then retaining them, are as much a concern for Middle Eastern family firms as for those in the rest of the world – the numbers are 55% and 43% for the Middle East, and 58% and 46% globally. Across the world, a number of respondents observed that family businesses can struggle to attract the most talented employees because the career path at a listed multinational is often clearer, and these companies can offer high-fliers the prospect of an equity stake and share-related bonus schemes. There are also specific issues in the Middle East, centring on problems with hiring skilled workers from overseas, and difficulties with the visa system.
Family firms feel under-valued in general – but not in the Middle East
At a global level family firms feel that the economic contribution they make is overlooked or underrated by their own governments. Middle Eastern firms are by far the most positive in this respect, with a 34% net agreement that their governments value them (compared, for example, to disagreement levels of 31% in the USA, 42% in the UK, and 48% in France). This may reflect the significant political influence large family firms wield in our region, and the fact that they often have access to decision-makers at the very highest level. All the same, family firms in the Middle East do believe there’s more their governments could do to help them.
Quotes
Anonymous
“My grandchildren are our soldiers for tomorrow – We must give them the tools to help them fight the battle”
Anonymous
"We want our family boardrooms to be dynamic and not end up discussing family issues"
Anonymous
“Some families may be ready to withstand the storms of the economic crisis but more likely to collapse at the first dispute among family members”
Anonymous
“Sibling rivalry, as well as irreconcilable differences in vision, often leads to splitting up of the family businesses”
Anonymous
“Mentoring and developing the next generation family members is crucial to the success of the family business”
Anonymous
“It is important to learn from your mistakes – you have to lose money to make money.”
Anonymous
“The best time to plan for the future is when the family is harmonious”
