Bahraini family Business

  • Just as families are the building blocks of a stable society, so are family businesses important in building a stable economy.
  • A family enterprise is by its very nature more inclined than other types of corporations to re-invest in itself to support and perpetuate wealth in future generations.
  • There are many misconceptions about family business. Perhaps the most pervasive is the “mom and pop” image that the very word, “family business,” engenders.
  • Broadly, family business has been defined as a business that is owned and managed (i.e., controlled) by one or more family members, however the economists defined family firms as: …organizations where two or more extended family members influence the direction of the business through the exercise of kinship ties, management roles, or ownership rights.
  • Families operate as interactive social systems; their members are both interrelated and interdependent. Any change in one part of the system affects other parts, including the business system.
  • Decisions by any one member affect all the other members. So any business decision has an impact on the family, and any family decision has an impact on the business. These are not two separate entities; these are integrated, balanced systems whether in large, multigenerational family businesses or small family businesses with four and five employees.
  • The 1990s have brought a multitude of business trends, all primarily designed for business survival and improvement. These trends have implications for family firms. Some trends support the strengths inherent in family firms, while others present challenges and opportunities to discover different ways to operate.
  • The concept of reengineering has been applied in many ways to many organizations, but they have been aimed primarily at making companies more competitive. If family firms have not yet looked at ways to cut costs by radically redesigning their operation procedures, they may be in jeopardy of losing whatever competitive advantages they enjoy.
  • Some form of active Family Council will be necessary for this business to survive in the future.
  • Government should start implementing new rules and regulation that will free the family business from the strict conditions of the usual Limited liability and public companies.
  • 7% of Bahrain Family Business Still runs by the founders of the business and only 40.2% are of the second generation of the family.
  • 7% of business has less than 2 of the founding members still involved in the business. This leads us to believe that they must still be young companies, still in the hands of the owner.
  • Only 1.4% of Bahraini Family Business belong to the third generation.
  • 5% of Bahraini Family Business who started the business after finishing secondary school. This tells us that companies are still managed by high school educated owners.
  • 7%. of The Parents who owns the business would like for their children to work in the family business, The tendency is to let them make up their own minds. And 62.9% of the second generation regret having worked in the family business.

Dr. Yousef H Mashal

CEO of Mashal Group wll

Board member of the Arab Center for the development of the Arab Family Business