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Lessons from History. Families in Business? First, Families in Society... if you want to endure

Lessons from History: Families in Business? First, Families in Society if you want to endure, by Paloma Fernández Pérez, Universitat de Barcelona,

In recent business history books and articles about longevity and endurance of large family businesses in the world I have demonstrated that the oldest and largest family firms and groups are  in Japan and Germany, two countries that were devastated by world wars. Also, I have demonstrated with new historical databases and hundreds of new case studies, that some of the countries never negatively affected by a world war, where peace has been the rule, like Switzerland, do not occupy the first ranks in the lists of the oldest surviving family businesses of the world. Is this not a paradox? We have always been told at school that businesses flourish in times of peace and are destroyed and suffer in times of crisis and war. So, why German and Japanese companies, particularly in the beverages industries (and more in particular, in alcoholic industries) and in the chemical industries have endured for centuries, in countries literally destroyed by bombs and the killing of millions of people, while many other families in business have disappeared in countries where there has never been a war or serious economic crisis? My hypothesis, and my latest research provides data to support it, is that there is an intimate, close link, between families and their societies that explain that despite destruction the link, the ties, help the business recover and expand. In countries where families in business perform activities that are perceived by society, and all political parties, in a general positive way, they are stronger than in countries where families in business are perceived as speculative, not transparent, not solidarious with workers and society. Germany and Japan have had a historical tradition of having, for instance, educational systems in which managers, owners, and workers, have received the same education according to their capacity and their performance. Excellence, meritocracy, are acknowledged regardless social origin. On the other hand, there are in these two countries traditions of organized, respected, rules of the game as regards work and labour relations. It is very rare to hear about general strikes in Germany or Japan, in part, for these two reasons. On the other hand, historically in times of crisis and war German and Japanese owners and managers have helped with their personal wealth their workers until recovery has allowed reconstruction of factories and sales, and often workers accepted in these two countries after the two world wars relatively low salaries and labour conditions to help the management overcome difficulties. Merit, respect, clear and respected rules of the game, seem to have been key in understanding the solid ties that, despite exceptions, exist in international perspective in Germany and Japan between families in business and their workers. A lesson from History we all should keep in mind when we talk about how to plan for survival and succession of family businesses. My claim is that it is important, when elaborating plans of succession for families in business, to study the outside world, and not just the education and values of the next generation of family owners. Society can be best friend, or best enemy, for the continuation and expansion of family firms, depending on how close and empathetic family businesses are regarding their workers and their environment.
For references:
Paloma Fernández Pérez (2012) La última globalización y el renacer de los grandes negocios familiares en el mundo. Bogotá, Cátedra Corona/Uniandes
Paloma Fernández Pérez and Andrea Lluch, coords. (forthcoming) Un siglo de cambios. Grandes familias empresarias en América Latina y España en el siglo XX.
Paloma Fernández Pérez and Andrea Colli, eds. (2013) The Endurance of Family Businesses. A Global Overview.
Paloma Fernández works in the Departament d 'Història i Institucions  Econòmiques,,Facultat Economía i Empresa, Universitat de Barcelona
Diagonal 690
08034 Barcelona
Tel 34 934024477
Coordinator, The Network of Interdisciplinary Research in Family Firms

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