Dec 4, 2012

Thailand - Succession a weak spot of family firms

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Two-thirds of family-owned businesses around the world have seen their sales grow in the past year and expect an even more ambitious trend over the next five years, a PwC survey says.

But the recruitment of skilled staff and the perennial problem of planning for succession will remain key challenges facing family businesses over the long term despite the buoyant prospects.

Sira Intarakumthornchai, CEO of PwC Thailand, said Thai family businesses need to be more proactive and put in place proper succession planning.

"Despite the economic slowdown, family businesses are thriving worldwide," he said.

In Thailand, family businesses have played a key role in driving the economy for decades. It's a "resilient" model for the 21st century as its structure offers significant advantages and benefits, he added. In order to keep their companies thriving and relevant, family businesses need to transform themselves and quickly acknowledge the traits essential for them to succeed.

They should be willing to reinvent themselves, not automatically appointing relatives to employment. They should have a focus on succession and openness to seeking outside help.

"Without these steps, family businesses stand to lose out on the benefits to be had from the forthcoming launch of the Asean Economic Community (AEC) in 2016," said Mr Sira.

Asean countries are embarking on a framework to strengthen their political and security affairs, social and cultural ties, as well as the regional economy.

The Asean Free Trade Area (Afta) started the region's economic development, followed by the Asean Framework Agreement on Services and the Asean Investment Area, all leading toward the AEC which is to allow easier and freer mobility in five areas: investment, services, goods, skilled labour and capital.

PwC annually publishes a global Family Business Survey, covering almost 2,000 family business executives in over 30 countries from both developed and emerging markets, representing sectors from manufacturing to retail, automotive to construction.

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