Viability of Family Business In Egypt

According to international reports, 90% of the companies in the Middle East are family companies that contribute 80% of the national income and institute about 75% of the private sector's activity and employ 70% of the labor force. However, family businesses in the Middle East and Egypt are companies in all countries of the world […]

According to international reports, 90% of the companies in the Middle East are family companies that contribute 80% of the national income and institute about 75% of the private sector's activity and employ 70% of the labor force. However, family businesses in the Middle East and Egypt are companies in all countries of the world agreeing that the continuity and development is confined to the life of the founder as the start of opportunities to continue and performance rates decrease with the next generations of the family , where international data indicate that out of every 100 businessmen, there are 30 businessmen continue their work after death, while the seventy The other two disappear their actions with the death of the entrepreneur, yet the companies that will be able to continue until the fourth generation and the fifth, the proportion of not more than 3% of companies that survived after the death of the founder, which made the developed countries are aware of the risk of not continuing the family businesses on their economies, and began to research the reasons for non-continuation of family businesses and risks to the economy and its assistance To continue to ensure the continued growth of its economy with many assistance, including the reduction of taxes and participation in the cost of support programs for the continuation of family businesses and others.

The difficulty in continuity is due to the nature of family businesses, especially the overlap between family, management and ownership, which is one of the distinguishing features of family businesses, which is one of the main reasons for creating intergenerational tension. This affects the continuity of the family and the business at the same time. In the inability to continue from the second generation of the family, but in the elimination of family relations by benefit, and pointed out that the family companies that have retained the continuity of the third and fourth generation is the one that succeeded in preserving the family and the company which is interested in early stages of the constitution of the family work is clear and details of all relations and policies and mechanisms to ensure the reduction of tension in all stages of continuity or exit and distribution of rewards, and pointed out that there is no model of a single labor constitution applicable to all companies, each company determines the constitution of its work according to the nature of activity Family circumstances and the abilities of successful generations of the family and their willingness to run the activity with their own knowledge or with the help of assistants from abroad. The accumulated experience of the family companies indicates that the continuation of the company for the fourth and fifth generations is a joint responsibility of the founders and the children. Successful generations.

Moreover, It is noted that the family company does not witness differences in the first generation stage because of the sole decision-making of the founder while the tension begins to make decisions starting from the second generation and the next generations of children and grandchildren, where the differences increase as the family expands and expanded the requirements of its members from the company represented in requests for participation in management The higher jobs, profits and so on. Thus, the problems of family businesses decrease and their chances of survival increase as the family expands and increases profits and production.

Recommendation

1. Tensions will decrease whenever the founder of the company or the board of directors of the family to develop the charter of family work early, stressing the need to note that the decision to continue the company is not born of the moment, but needs preparations and rehabilitation for a period of not less than 15 years before the next generations overlap in the decisions of the company, And that the rules for rehabilitation of the transition and resolution of the causes of tension should be transparent and clear. And that there is a family council looking for family problems and another administration interested in running the company away from family concerns and problems. Also, that family businesses are also vulnerable to corruption, illegal practices, fraud and deception, especially in the absence of accurate systems of internal control from owners.

2. To encourage the development of legislation in the laws and legislation governing the establishment and management of Egyptian companies in terms of construction and management in general and family businesses in particular.

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