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Forums Home > International Management > Ask an Expert > Family companies and culture

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International Management Debbie Nicol Joined: August 2012 Posts: 10 Location:	Posted: September 17, 2012 9:48 AM What is the impact of culture on family companies going to IPO? In your culture is it seen to be a mark of failure or success? What cultural values if any impact that? It was a very interesting question I heard this morning here in Dubai radio today, where we are now hitting the third generational level of companies. Not only are economic factors a part of this decision, but also the Arab culture has family units at the heart of its culture. Is the restructure of a company, and the opening of it to complete transparency a threat to the family unit and indeed the strength of the cultural belief? What experience do you have with this – would love to hear…
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International Management Ven2012 Joined: September 2012 Posts: 7 Location:	Posted: September 17, 2012 12:27 PM RE: Family companies and culture Not sure if I am qualified to talk about it being a threat to the family unit or cultural belief. However, I have worked overseas for several companies as well as smaller family owned companies. One of the issues that you face in particular with family owned companies is that decisions are made for benefit of family members as opposed to the benefit of the company. Having said this, it isn't an issue as long as those two interests are directly aligned..but if yous see a divergence of the two it can potentially have disastrous consequences. Nepotism, at least in American companies, can destroy moral and disincentive individuals from aspiring to excel for fear of not having anywhere to climb because they don't have the correct name.. Perhaps there is a realization happening in those companies you are referring to..where they need to be completely transparent, but are afraid it might undermine the existing norm. Especially if they go public and the public and new shareholders demand results and want the best talent as opposed to the next in line of family. Would love your feedback on this Debbie. Very interesting topic.
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International Management Debbie Nicol Joined: August 2012 Posts: 10 Location:	Posted: September 19, 2012 10:18 AM RE: Family companies and culture Hi Ven2012! Thanks for the reply! I love your word 'alignment' - to me that is what business is about, and when I see failure looming it can normally come down to a 'disconnect' of some sort - may be disconnect of leader to self, disconnect of leader and others, disconnect of people to business, or even business to values, business plan and local culture. I think we're in agreeance that wherever you are in the world, it is not healthy to have misalignment. As you've worked overseas, do you have any examples of where the disconnect was evident between cultures within the team? I was at one stage leading a change for a number of years, and after much initial success, discovered that the leader was agreeing to 'across the board policy change' yet was reversing them for people in the team of his own nationality. And that company was attempting not only to be multi-national, but expand from a family-based to an international company! A certain recipe for failure! Can anyone else share some insights and stories - let's really flesh out families, culture and nepotism in business...quite interesting! best deb
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International Management Ven2012 Joined: September 2012 Posts: 7 Location:	Posted: September 21, 2012 10:23 AM RE: Family companies and culture Hello Debbie, I couldn't agree more.. misalignment isn't healthy..even for my back after those long international flights. The example I have is working for a large conglomerate who, even in overseas offices, employed mostly host nation employees. So it would be like a UAE company starting a business in Canada and employing only individuals from the UAE. Even more challenging is that the couple of individuals they do hire (primarily to act as a communication tool) are expected to think/do and act like everyone else. Because the predominance of employees are dispatched from corporate, there isn't even an effort to reach across social boundaries to respect both sides. The end result is far worse than a handful of employees being frustrated. This attitude comes across in how they treat potential customers and as a result they find themselves not being able to do business because of the large cultural disconnect. Frustrating...yes... easy to fix... absolutely not.. worth the try to see if I can make a difference.. absolutely!
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International Management Debbie Nicol Joined: August 2012 Posts: 10 Location:	Posted: September 23, 2012 1:28 PM RE: Family companies and culture HI VEn2012 I've read your reply with interest, especially the statement: Even more challenging is that the couple of individuals they do hire (primarily to act as a communication tool) are expected to think/do and act like everyone else - ugh! This opens another very interesting point....if you overheard the local team members speaking about the legacy you left behind, of the tenure you spent overseas, what would they likely be saying? best deb
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