Family Business in the World

In the European Union, family enterprises represent, depending on the country, 60–90% of economic activities and are responsible for two thirds of GDP and workplaces. In the mid-1990s, in the USA, family firms were over 90% of the total and produced more than half of the goods and services; moreover, a third of the “Fortune 500” enterprises (i.e. the largest and richest enterprises in the country) were controlled by one family or by the founder family that took part in the business management. But the most important thing is that these enterprises tended to create better outcomes and advance more rapidly than the average of the executively managed competitors (non-family members). Besides Europe, also in the developing countries, family enterprises give a valuable contribution to economic development, because their cultural, political and economic situation isn’t mature for industrial structures of managerial type. In fact, in many of those areas, Africa, Middle East, most of Southern Asia and South America, family firms are the hope for economic start-up, seeing that they add safety and human resources. So, both West and East seem more inclined to a “community” idea of enterprise, biologically identified with the entrepreneur and his family as the main source of the resources needed by the business. We find it in the idea, widespread within the enterprise, of “paternalism”, which refers to the creation of a “community of workers” internal to the enterprise and inside which the relations between capital and labour are shaped by reproducing the typical structures of pre-industrial societies. After all, the setting in force in Europe outlines a close and long-time relationship between enterprise and family. A direct consequence is “familism”, that is the involvement, at every level of the enterprise’s activity, of family members, to whom resources, power and responsibilities are assigned on the basis of kinship criteria. On the other hand, also in the Japanese model of production organization, feudal rules of loyalty and sense of belonging are faithfully reproduced within the enterprise. Hence, family isn’t an exclusively biological unit, but it points out the group of “those who contribute to the economic wealth of the group itself”, because collective interest is laid upon the individual one, talking either about families of enterprises or of the whole country. In this chapter we specifically analyze both Western and Eastern countries, Germany and UK, and Lebanon. Viewing these countries, we notice that although a few dimensional differences exist in the organizational structures and in the governance of the main family-led enterprises, in the end the contribution they give to national income seems to show a certain conformity, i.e. they add a valuable contribution to the richness of the nation.