Family businesses in Bangladesh have been growing at a rate higher than the international average despite facing many challenges, speakers said yesterday.
The challenges they pointed out are a gap in skills and efficiency, absence of innovation and rising prices of energy and raw materials.
The comments came at a discussion on “Challenges and Opportunities of Family Business” organised by the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) in collaboration with the Dun & Bradstreet South Asia Middle East at the chamber’s Gulshan office.
The discussion focused on succession plans and family constitutions and challenges and opportunities family-run businesses faced.
Golam Mainuddin, vice president of the MCCI, chaired the session where the keynote presentation was delivered by Associate Prof Girish Bagale of Mumbai’s Pravin Dalal School of Entrepreneurship & Family Business Management.
Family-owned businesses dominate economies of most of the countries in sectors ranging from retail trade, small scale industry and services.
According to the Pravin Dalal School’s website, family managed businesses employ half of the world’s workforce and generate well over half of the world’s gross domestic product.
With time, the contribution of family businesses has gone beyond simply paying taxes and employing people.
Most of the business families face unique management challenges because of the difference in the attitude and aspiration of family members. As new generations join the business, it is an enormous challenge to keep the family and business together.
Bagale said issues such as the owner’s death, a lack of interest on the part of the successors and the involvement of spouses of next-generation family members could often determine the sustainability of a family business.
He also pointed out that most family businesses did not survive beyond the third generation.
“In order to ensure success, family businesses require a thorough understanding of the complexities involved and different sets of strategies than non-family businesses,” he said.
He recommended having clear succession plans and advisory boards for ensuring the best performance of family businesses.
Mainuddin of the MCCI praised local family businesses like Square Group, Transcom Group, ACI, Rahimafrooz Group and Apex Group for setting fine examples.
Siddhartha Biswas, vice president & head of Dun & Bradstreet South Asia Middle East, hailed Bangladesh’s impressive economic growth. However, he said it would have to ensure diversification of other industries and reduce dependence on garments to maintain the success.
Among others, members of the boards of directors, managing directors, senior officials of different family-businesses and other organisations and former presidents of the MCCI attended the event.