The Wisdom of Family Firms: sind Familienunternehmen besser gegen die Finanzkrise gewappnet?

Der folgende Beitrag von Dr. Pablo Hafner ist in der Huffington Post vom 23. November 2011 erschienen  www.huffingtonpost.com.

The Wisdom of Family Firms: Lessons learned from the financial crisis 

While large public corporations were taking severe financial hits since 2008, family firms were affected to a lesser degree and, indeed, we can even say that family-owned businesses are in a better position than their larger publicly traded counterparts to face the future right now.

At the outset of the financial crisis, most people thought that large public corporations would be prepared to withstand the blow. But they were wrong. Rather, it was the very special characteristics of firms run by one or various families that enabled these family firms to ride out the storm. Here are the reasons for their success:

  1. As opposed to large public corporations, owner families have non-economic goals in addition to financial objectives. It is precisely such social, family- and community-oriented goals that make these firms well-prepared to survive long periods of crisis. The priorities of keeping the firm in family hands, as well as the strong link with the company’s local community, its social commitment to that local community, and the high reputation of the owner family in that community are factors responsible for keeping these firms alive. Regardless of the size of its business, a firm without non-economic goals will succumb when hit by its first strong crisis
  2. Given their strong local ties, family firms are not only committed to increasing shareholder value, but even more importantly, to adding value to the entire community. The growing tendency to gauge corporate return in terms of short-term objectives, coupled with a lack of long-term vision, has had terrible effects on the development of the economy. In contrast, successful family firms have a corporate governance system whose main objective is the creation of value for the entire corporate community, understood as shareholders, suppliers, customers, and employees. In this way, they avoid catastrophes such as those that have occurred in recent years where the money-making of a few, pushed by short-term interests, has endangered the prosperity of many.
  3. Family capital, also called patient capital, is not subject to the daily scrutiny of financial markets nor is it submitted to strong pressure on the part of shareholders to yield positive quarterly results. The owner families have long-term objectives where market fluctuations have very little effect on their strategies. Thus, family firms can withstand losses over the financial course while keeping their strategies intact.
  4. Successful family firms have been able to integrate the entire organisation – shareholders, directors, management and employees – into their economic and non-economic goals, and they are particularly interested in keeping the family values alive for generations.

Observing the best examples, it would seem simple to deduce that corporate survival depends on the capacity to establish socially responsible objectives, and that such goals should guide shareholders when it comes to conducting their business. Being socially responsible implies not only setting up some non-economic goals over and above financial goals, but also reflects the manner in which such goals should be met and the ways that those responsible for the achievements of the firm should be rewarded.

Surviving or not surviving this crisis has depended to a large extent on the capacity of the board of directors of such companies to create value for the entire community instead of reaping benefits solely for shareholders and senior management. Therefore, we should ask ourselves why the big multinationals, many of them formerly successful family firms, have stopped paying attention to these four points followed by successful family-owned businesses, and have caused such destruction of economic and social value as a consequence of the global financial crisis.

Finally, European regulatory bodies that today adopt new, last minute control measures to avoid a second recession, have, in the family firms, a crucially important fountain of knowledge that they must use when the time comes to develop much more effective corporate governance guidelines.

Dr. Pablo Hafner, Entrepreneur, consultant, academic, writer and commentator on politics, society and the economy. President of Hafner & Partners.

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