In all countries including Qatar, there are many famous family companies and it is very evident that they are playing an important, active and effective role in developing the corporate industry, support the society and the national economy.
Family companies normally started by the mere first ignition by one person, who starts the business he likes and keeps on developing and guarding it for long time. At a certain stage, during the process, other family members may join forces with this pioneer entrepreneur and give him support and necessary impetus to keep the family business rolling on and growing to high ranks.
The leadership of the pioneer entrepreneur continues even after other family members join in “what is known” in the family business and this continuation is due to many factors including the charisma of the first entrepreneur. It is almost an established fact that family companies depend on the leadership of a single dynamic and business-oriented entrepreneur, perhaps with the assistance of relatives and children when they grow up.
However, certain problems could come up particularly from the siblings who are the second or third generation. This is because newcomers, most likely, may not follow the leadership stylestructure of the founding parent or grandfather.
After the expansion of the family business and its continuation for years, the family business could face more complex and new challenges from internal or external sources. This is normal for all businesses everywhere. However, this situation could take or invite the newcomers to adopt a different leadership style.
With particular reference to family companies business, many studies have revealed that there is noticeable difference between what is known as “necessity–based” entrepreneurship and “opportunity–based” entrepreneurial activity. The first type is represented by the founder because other employment opportunities for him were limited or unavailable at that time. On the other hand, the second type is represented by the new generations who join the business after acquiring necessary educational qualifications. The education, professional qualifications and external exposure obtained by the new generation normally focus on a new type of leadership. A new-look for the business, as we know, is the natural process in all instances and this is how a business is developing.
The old guard, in case they are still involved in the management, may resist the change or move and this could jeopardise the interest of the family business. It is a matter of generational differences or cultural differences. No worries, nor panic and wisdom, from all parties, is needed in such instances.
To overcome such difficulties we advise that family companies should be institutionalised through adopting certain rules to bring a new structure for the company. Institutionalisation of the business will definitely help in creating the wise leadership of the company away from “personalisation” and the “I ego”.
However, all such steps for a new start are in need of close understanding and cooperation among family members. The old classical views and the newcomers with their new look are to look for matching scenarios. Many families have worked very hard and they survived by over-stepping this period. Others, are keenly advised to follow suit. The matter may take time, but it is of vital importance for the survival of the family company. On the other hand, certain incentives and encouragement from different sources are required to boost institutionalisation of family companies. However, this should always come from within the family company owners.
Dr AbdelGadir Warsama Ghalib is a Legal Counsel. Email: AWARSAMA@WARSAMALC.COM
Dr AbdelGadir Warsama Ghalib
