Succession and conflict resolution

About the Survey
 
About the PwC Family Business Survey 2012
We’ve talked to almost 2,000 respondents, large and small, around the world, from both developed and emerging markets, across a broad range of industries. We found remarkable similarities among the diversity.
Scaling Up
 
Scaling Up
The next frontier for more and more family businesses is overseas expansion: 67% of respondents had some level of international sales in 2012. By 2017, that number will jump to 74%.
Skills
 
Skills
Recruiting and retaining the right talent is a challenge for family businesses: 64% of them are planning to bring in non-family management in 2012.
Succession
 
Succession
While 4 in 10 respondents will pass on ownership and management to the next generation, 25% will pass on ownership but bring in professional managers,citing the next generations lack of skills as an issue.
Territory insights
 
Territory insights
While our survey revealed striking similarities among all family businesses, we found -- as might be expected, given the vastly different regional economic conditions around the world -- some significant variations in outlook and habits.
Download
 
Download the Survey
Read our report on what family businesses in 2012 are thinking and planning as they look to compete in an increasingly global marketplace.
 

Succession: The critical issue

Transitioning a family business from one generation to the next can be a challenging time.

The passing on of a business can augur a time of reinvention, renewal and strength… or one of destructive imbalances, especially if the succeeding family members lack the skills to take the business on -- or if, as is often the case, there are unresolved conflicts that could upset the stability of the on-going enterprise.

Fortunately, 8 in 10 respondents told us that they have at least one conflict procedure or mechanism in place, and a quarter have already made provisions for a third-party mediator.

The very essence of a family firm -- its strength as well as its potential vulnerability -- is that the business is in some way embedded in the family structure. This year’s survey underscores that the way the family handles the moment of transition – and the years leading up to it – can make or break the firm’s future success.

Own, manage, float or sell?

Significantly, although just over 40 per cent of family businesses told us they intend to pass ownership and management to the next generation, more than half of those were unsure whether the next generation would have the requisite skills (or enthusiasm) to do this successfully.

Others were more than unsure. Fully one quarter (25 per cent) intend to pass on their shares but bring in professional managers, citing the next generation’s lack of skills as the main reason. Another 17 per cent have decided they will sell, or float, their family business outright when the time comes.

Overall our survey revealed strong trends among family businesses around the world -- some of which underscore their fundamental similarities in the face of this critical issue, and some of which reflect larger regional and cultural differences.

Dive into the details

Benchmark your company
Helping you to understand how you compare

How do your challenges, strengths and resilience compare to those of your peers across the world? We've got the qualitative and quantitative data from our large-scale survey of 1,952 family businesses across over 30 countries. We've used this knowledge to create a benchmarking tool that will not only help you see where you are, relative to your peers, but help you set a strategic course for where you want to go. Benchmark your company

What family businesses told us

Australia
 
“Exit strategies out of our businesses [is a unique challenge for family businesses], whether it would be passed down in succession or the business would be wound up, there are not many in-betweens for family businesses.”
Belgium
 
“Family businesses need a good succession plan, … and to take time to make clear agreements.”
Middle East
 
“Mentoring and developing the next generation family members is crucial to the success of the family business”