Family ties the missing link in business study
With their growing presence around the world, Asian businesses could fast become a rich resource for postgraduate-education case studies. One aspect certainly worth studying is businesses being run by successive generations.
An opportunity to gather thoughts on this subject came up recently at the Sustainability of Chinese Entrepreneurial and Family Businesses Roundtable, held by the Hong Kong University of Science and Technology’s Tanoto Center for Asian Family Business and Entrepreneurship Studies, together with the World Economic Forum Beijing Representative Office.
The line-up of speakers from well-known companies such as Lee Kum Kee, Far East Holding Group, Orient Overseas Container Line and the Chevalier Group showed the pervasive influence of family links on long-established businesses. Research into the type of culture and values that sustain these businesses could yield interesting insights for postgraduate study.
Worldwide, family businesses make up a big slice of the economic pie. In Hong Kong, almost 70 per cent of listed firms are family-owned, according to Professor Roger King, director of the Tanoto Center. He acknowledged, however, that despite the economic power they exert, family businesses have yet to receive the proper academic attention they deserve.
Succession planning is an area that remains largely unexplored. In this respect, King said, family businesses in Hong Kong are more mature than in the mainland as many have already gone through three or four generations. Up-and-coming mainland Chinese enterprises may profit from the lessons learnt by their business counterparts in Hong Kong, as well as the entire Asia region.
Another interesting research topic is the tendency for Chinese entrepreneurs to pass the company reins on to their children, instead of outside talent. Two very prominent examples are those of Li Ka-shing’s son Victor being set to inherit the vast Cheung Kong empire, while Francis Lui, the eldest son of self-made tycoon Lui Che-woo, is proudly running the Galaxy resort in Macau.
But how do rich tycoons decide that it is safe to pass their businesses on to their children? And which ones? Do the children have to be trained or inculcated with certain business concepts and values from an early age?
Given the prevalence of such businesses, and per the stated goal of the Tanoto Center, a host of research areas await for the benefit of our future generations.