Recently a research shows that the Family-controlled firms now make up 19% of the companies in the Fortune Global 500, which tracks the world’s largest firms by sales. It seems that there is a huge success the family company has reached, and more importantly, a majority number of investors would like to believe these companies can provide them a more stable return of profit.
In my opinion, the family-controlled firms can show a obvious advantage that they usually have an excellent operation culture which is really essential to keep both employees and customers’ loyalty. The nature relationship between family members can bond the managers together and make a easier environment to reach a consensus.
However, there are still many issues we should realize in terms of a family firm. First of all, because of the difficulty to distinguish the ownership clearly ( most family firms have a few different major share holders in one family), there is a high risk that the company may be destroyed by squabbles in between the managers. Furthermore, it is believed that there is no potential issue that is more toxic than the transition from one generation of a family to the next. On the one hand, their children may not have the interests or abilities to join the family business, and handle the business problems, which could put company founder in a huge dilemma. On the other hand, the investors and shareholders possibly lack confidence to the next generation.
Materials from: http://www.economist.com/news/business/21629385-companies-controlled-founding-families-remain-surprisingly-important-and-look-set-stay