What is good for your family firm is good for you!

PhotoWhat is good for your family firm is good for you, but the other way around is not true,” said Sheikh Sultan Al Qassemi in the Guest Lecture Series hosted by Prof. Rodrigo Basco. “Family is about emotions and how to manage them for continuity.”

In the interactive session, titled “The Experience from Two Generations,” Sheikh Sultan Sooud Al-Qassemi and his nephew, Sheikh Saud Majid Al Qassimi, emphasized the importance of emotional intelligence and strategic dialogue when communicating with family members in a professional arena.

Drawing on their own experiences, the guest lecturers explained the importance for new-generation family business members to listen and to learn but to not directly confront the generation in charge. Finding alternative solutions to convince family members to implement family and/or business changes is the best way to strategically manage family businesses in the Arab world. The lesson they transmitted was “adapt your strategies to the cultural context of the Arab world. Respect tradition without confrontation, but look for opportunities to introduce changes necessary to keep your family united and the business working.” “The key to cohesion and efficiency,” Sheikh Sultan Sooud Al-Qassemi said, “is understanding the essence of those you’re working with.”

Saud Al Qassemi spoke about the uncertainty he experienced after graduating from university. He had assumed that he would be included within his family business after merely a few months of training. “I was wrong,” he said with a laugh. “When I asked my uncle if I could join, he simply said no.” Instead, Saud Al Qassimi spent the next couple years learning and gaining experience working in numerous banks in the United Arab Emirates and Singapore. It was only after having spent a considerable amount of time abroad that he joined his family’s business.

However, his experience, extensive as it might have seemed, was not enough to prepare him for working alongside his family. “I found out that working in a bank is a completely different experience,” he said. “Working in a family business is something else entirely. I don’t think it’s something you can actually prepare for.”

Photo 3Sheikh Sultan Sooud Al-Qassemi and Sheikh Saud Majid Al Qassimi’s session is one of the initiatives headed by Dr. Rodrigo Basco, Chairholder of the Sheikh Saoud bin Khalid bin Khalid Al Qassimi Chair in Family Business, aiming to disseminate new knowledge to the student community and to further develop the future leaders of family businesses in the UAE, GCC, and MENA regions.

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Contextualizing Family Firms in the Arab World

 

Logo Rodrigo fondo transparente1st International Academic Conference

7th and 8th March 2018

 Call for papers:  “Contextualizing Family Firms in the Arab World”

Arab family firms cannot be fully understood without considering the context in which families and firms exist. While contexts determine organizational behavior (Johns, 2006), the footprints of family firms recursively manifest themselves in regional socio-economic contexts (Basco, 2015). Therefore, to fully understand the Arab family firm phenomenon, scholars must go beyond its boundaries by recognizing and exploring the multiple embeddedness of family firms in general. We must consider the micro-context of the family, the meso-context of the industry, and the macro-context of the country/region, all of which are characterized by paradoxes of conflict and peace, stability and instability, certainty and uncertainty, and modernity and tradition (Basco, 2017).

In the Arab World, socio-economic activities have traditionally been embedded in kinship relationships in Bedouin, rural, and urban societies. Families are the dominant institutions through which individuals transmit their culture, legacy, religion, expectations, and traditions and interact in society (Barakat, 1993) by creating their own identity. In this context, Arab families act as a filter absorbing changes caused by contemporary economies, social and economic globalization forces, societal conflicts, political transformations, the influence of the recent colonial past, and cultural pressures from Western and Eastern cultures.

Even though the family business field has gained external legitimacy (Chrisman, Chua, & Steier, 2003; Perez Rodriguez & Basco, 2011), the lack of an overall family business theory is mainly due to the shortage of studies integrating contextual dimensions. A theory of family firms “must explain and predict not only the interaction between family and business systems at the individual and family firm levels but also the interaction between family firms and the environment at the aggregate level” (Basco, 2015, p. 260). In this sense, contextualizing the family firm in the Arab World could help clarify firm familiness (Gomez-Mejia, Cruz, Berrone, & De Castro, 2011; Habbershon & Williams, 1999), which focuses on the effect family has on firm behavior and performance, and regional familiness (Stough, Welter, Block, Wennberg, & Basco, 2015), which focuses on the family firm’s effect on regional development.

The aim of this conference is to advance previous efforts to contextualize the family firm phenomenon in different institutional and cultural environments (e.g., Gupta, Levenburg, Moore, Motwani, & Schwarz, 2008), particularly in the Arab World (e.g., Bizri, 2016; Fahed-Sreih & Djoundourian, 2006; Welsh & Raven, 2006).

We invite submissions to the conference titled “Conceptualizing Family Firms in the Arab World.” The purpose of the conference is to gather researchers who are investigating the family firm phenomenon in the Arab World. We expect that contextualizing family firms in the Arab World will shed new light on the nuances of family firms in terms of their phenomenological perspectives and theoretical development.

Submission Guidelines and deadline

We encourage scholars, especially PhD students and young researchers, whose research focuses directly or indirectly on family businesses in the Arab World to submit their works in progress at different stages. Abstract submission should be one document with a cover page (title, author’s name, affiliation, email) and a two-page abstract (topic of research, theories, method, results, contributions)

Abstract submission should be sent electronically to rbasco@aus.edu

Deadline Abstract by 30/11/2017

Authors Notification by 31/12/2017

Final papers (final submission) by 31/01/2018

 

Conference Highlights

Travel Research Grants

The Sheikh Saoud bin Khalid bin Khalid Al-Qassimi Chair in Family Business offers six scholarships for PhD students from the Arab World to travel to and attend the conference. Potential candidates who would like to apply for a travel/accommodation grant should send their application letter and CV with their abstract submission by 30/11/2017.

Career Academy

We have designed a special event for PhD students and young scholars called the Career Academy Workshop to discuss the challenges of developing an academic career in the Arab World. Topics will include matters related to earning a PhD, building an academic career, publishing research, and building local and international networks.

Special Issue

In collaboration with Journal Family Business Strategy, papers presented at the conference will be eligible for a special topic section, “Contextualizing Family Firms in the Arab World.”

Registration

There is no registration fee.

Tentative Program 

Academic Conference: 7th of March, 2018 – Keynote speakers – Plenary sessions

Business Family Conference: 8th of March, 2018 – Keynote speakers and panel sessions

Venue

American University of Sharjah, Sharjah, United Arab Emirates

Organizers

Rodrigo Basco (American University of Sharjah), Alreem Al Ammari (American University of Sharjah), and Farida El Agamy (Tharawat Family Business Forum)

 

 Aus logo (colour)                                                             JFBS

  TFBF Logo - original - 2017                                Sheraa

References

Barakat, H. (1993). The Arab World. Society, culture, and state. Berkeley, California: University of California Press.

Basco, R. (2015). Family business and regional development-A theoretical model of regional familiness. Journal of Family Business Strategy, 6(4), 259–271.

Basco, R. (2017). The multiple embeddedness of family firms in Arab World. In S. Basly, P.-L. Saunier, & A. Marouane (Eds.), Family Businesses in the Arab World – Governance, Strategy, and Financing (p. forthcoming).

Bizri, R. (2016). Succession in the family business: drivers and pathways. International Journal of Entrepreneurial Behavior & Research, 22(1), 133–154.

Chrisman, J. J., Chua, J. H., & Steier, L. P. (2003). An introduction to theories of family business. Journal of Business Venturing, 18(4), 441–448.

Fahed-Sreih, J., & Djoundourian, S. (2006). Determinants of longevity and success in Lebanese family businesses: An exploratory study. Family Business Review, 19(3), 225–234.

Gomez-Mejia, L. R., Cruz, C., Berrone, P., & De Castro, J. (2011). The Bind that Ties: Socioemotional Wealth Preservation in Family Firms. Academy of Management Annals, 5(1), 653–707.

Gupta, V., Levenburg, N., Moore, L., Motwani, J., & Schwarz, T. V. (2008). Culturally-sensitive models of family business in Germanic Europe. Hyderabad, India: ICFA University Press.

Habbershon, T. G., & Williams, M. L. (1999). A Resource-Based Framework for Assessing the Strategic Advantages of Family Firms. Family Business Review, 12(1), 1–25.

Johns, G. (2006). The Essential Impact of Context on Organizational Behavior. Academy of Management Review, 31(2), 386–408.

Perez Rodriguez, M. J., & Basco, R. (2011). The cognitive legitimacy of the family business field. Family Business Review, 24(4).

Stough, R., Welter, F., Block, J., Wennberg, K., & Basco, R. (2015). Family business and regional science: “Bridging the gap.” Journal of Family Business Strategy, 6(4), 208–218.

Welsh, D. H. B., & Raven, P. (2006). Family business in the Middle East: An exploratory study of retail management in Kuwait and Lebanon. Family Business Review, 19(1), 29–48.

The Dark Side of Family Capitalism

By Rodrigo Basco, Ph. DDark Side

Is the family business an important player in local development and growth?

The answer is YES. Let’s look at some numbers. The backbone of the German economy is made up of a diversified and comprehensive group of companies: “German Mittelstand FIRMS”. This group includes small and medium companies, mostly family businesses, which generate more than 50% of the total production of the German economy, employing 60% of the workforce. These companies give jobs to four-fifths of trainees (young people who will become the workforce in the future) in their factories and offices, which contribute to Germany’s lowest youth unemployment rate in Europe (7.9 % versus 22.8 % in the European Union). They are also responsible for more than 20 % of German exports. The Mittelstand model might be a model to imitate, but the model should not be understood without the historical economic and social (German) perspective. However, the model itself is facing a new challenge: ‘complacent’. A new generation of owners and managers (even politicians) is assuming leadership positions. The new generation grew in a different context than previous one (very different context). Can the new generation overcome ‘the complacent inertia’?

But the answer can also be NO. Family capitalism has its dark side too, and may slow down the regional economic development in the long term depending on the types of relationships and interactions between the regional family business productive structure and the rest of the actors within and outside the region. For example, the negative side emerges when a small group of families is able to control a significant portion of the economic resources and manipulate public authorities to obtain economic benefits or privileges through specific form of public-private organizations and/or private ownership structures such as pyramidal ownership. Or when the company’s objective is to get political rents by using the coercive power of government institutions to their advantages, for example, by limiting competition in the market, creating monopolies and promoting business contracts among other practices that limit and deteriorate regional long-term economic growth.

Perhaps the answer is IT DEPENDS. In order to become an agent of economic and social development, companies must serve to their own nature: they have to make money by developing products or services in order to exploit opportunities. This may promote economic development. When the company’s goal is distorted, there is a number of consequences: 1) the economic and social connection with its environment is broken; the company, once productive, becomes an extractive institution of wealth (as in case of large mining conglomerates in Chile, with an economy that depends on mineral export without any significant forward productive linkages); 2) the business is no longer efficient, and becomes a burden subsidized firm by taxing middle classes (as is in case of the bailouts in the U.S. and Europe to support the speculative imbalances in banking and other questionable practices of big corporations); 3) or it ceases to be innovative to become an archaic assembly of the past, without any added value (like the phone assemblers in Argentina, which import over 90% of materials and technology from abroad with little domestic value added).

The family business may have a tendency to undermine its own participation in the economy by encouraging practices that limit economic development: political favouritism, succession to unfit heirs, chronic practices to keep the family lifestyle intact, among others. The extreme cases of the decline of family capitalism can be found in some Arab countries, managed by families like Mubarak and other business empires created around it and supported by the Western economies (as well wealthy families). Or in Latin America, where family capitalism is the conquest of political power by itself and using business protegees to monitor public and private resources to sustain for the same idea (power and wealth for a few). Argentina is a paradigmatic case for family businesses in which the goal is to succeed as the next president or governor.

The family business, as an economic and social agent, is neither good nor bad by itself for the economic development of a region. But the way in which this player is related to other economic and social players and the characteristics of the historical-cultural and historical-institutional environment represents the conditions on which the importance of the family business is based in an economy.

Maybe, the most general research question that emerges with theoretical and practical roots is: how and to what extent family firms are able to participate in the wealth creation or wealth destruction at regional level. Needless to say, how and to what extent family firms are responsible for economic growth and development.

Call for Papers
Journal of Family Business Strategy
Special Issue

“Family Business and Regional Development”

Submission Deadline: September 15, 2014

For submission  click Here – Family Business & Regional Development

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