Family business are businesses that are created from their founding fathers of that era, if may evolve from small businesses into big enterprises. Family business is playing a very important part in the economy of Malaysia; the reason is that more than half of the Gross Domestic Product of Malaysia is from the family businesses that are conducted in Malaysia.
For example The Genting group and The Berjaya group are two of the most famous family businesses that are conducted in Malaysia. The following are the issues and challenges that are faced by family businesses in Malaysia. The first challenge and issue that affects family businesses in Malaysia is succession planning which is choosing the next successor for the business after the current successor retires or passed away. Choosing a successor is one of the biggest challenges and is often faced by family businesses in Malaysia. Choosing a successor is hard because there are many factors that need to be considered before delegating him or her to be the successor of the family business.
The first factor is of course the capability of the potential successor, to see whether he or she is up to standard andable to handle the responsibility that is about to be passed onto to see whether they qualify for the position.
The second factor is that the potential successor must have certain amount of knowledge about the business and must know every part of operation of the business in details. The potential successor must also have very good management skills and have a good relationship with everyone involved in the business in order to have smoother process when sharing business ideas. The second challenge and issue that affects the family businesses in Malaysia is family disputes which is the harmony between family members and also within the business. The reason why it is one of the challenges and issues is because some of the family members or people involved in the business are always jealous of each other, or they are angry because of the decisions made which they are unfair, which will then results in political issues happening in the business which can greatly affect the outcome of the business, and sometimes it may be serious until it can tear down the whole business.
So that is why it is very hard to keep the family and business at harmony all the time. However, if they are able to do so, it will help improve the communications between family members and also people involved in the business so that they can share out their feelings and the conflicts more openly so that the conflict can be solved in a way that will benefit the family and the business. The third challenge and issue that affects the family businesses in Malaysia is professionalism which is capability of keeping the family business up and running for a long term.
This is a very hard challenge for all the family businesses out there in Malaysia because it has many factors to look at in order to keep the family business in one piece, because family businesses often faced with conflicts between one another sometimes because of the informal business structure, like there are no roles given formally which then allows everyone can step into each other territory in the business structure which is also known as invading other’s personal workspace. The other reason is because of the non-systematic work which is caused by bad operation control which can greatly impact the operation of the family business. However, if management is in good control and the organizational structure is complete and the objective and goals is the same and shared by everyone, the efficiency of the family business will sure improve a lot. Staff training can also improve the professionalism of the family business.
The fourth challenge and issue that affects the family businesses in Malaysia is leadership which is basically the compass for the direction of the family business. It is very hard for family business to have good leadership because it involves leading, involving, and also motivating the people in the family business so that they share the same goal. So, if the leader of the family business is strong, then the chance of the business to succeed will surely be very high. The first thing is that the good leader must have the stamina and the passion to lead. Besides that, the leader must have a wide knowledge of the economy and also the industry itself so that he or she can direct a most beneficial way for the family business to approach and also giving a sense of common purpose. Lastly, the leader must have power to control the people in the family business and tell them what is the plan and what they need to do. The last challenge and issue that affects the family businesses in Malaysia is fair compensation which also includes fair treatment to the people involved in the family business.
The reason why this is a common issue in family business is because that the family members always tend to treat their own family member better and they also make bias decision most of the time. The most common problem is the payment and the salary of the people in family business. People who are the family member often get better pay which then the other people will feel cheated and mistreated at the same time. Then they will feel alienated by the family members of the family business, which will then greatly affect the earning capability of the business. Although there are quite some challenges and issues faced by family business in Malaysia, but if those family businesses can overcome the challenges and issues that are stated above, then their family business will surely be stable and run for a long time.
2. http://www.businessnewsdaily.com/862-family-business-challenges.html 3. http://www.freemalaysiatoday.com/category/opinion/2012/02/02/asias-family-businesses-face-new-challenges/ 4. http://familybusiness.about.com/od/managementandoperations/a/commonthreats.htm 5. http://www.isb.edu/FamilyBusiness/File/challengesfacedbyindian.pdf
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Family Business. (2016, Nov 02). Retrieved from https://studymoose.com/family-business-essay