With the Asian gaming industry boasting a number of family owned companies, Dr Brian To examines the many problems that can arise when business and family collides.
By Professor Dr Brian To
The family spat brought to our attention recently by the Prime Minister of Singapore, Lee Hsien Loong, is a reminder yet again that in Southeast Asia more than 90% of all companies, both public and private, are family controlled or family operated.
While this particular dispute between Mr Lee and his siblings was over the potential demolition of their father’s home, the case has in fact drawn attention both nationally and globally that all isn’t well in the land of family business throughout Asia.
Family affairs continue to dominate the headlines, be it families working together in Shanghai or in Hong Kong.
Certainly among families where power and wealth is heavily controlled and centralized by prominent players, trust can easily be identified as being absent in most manoeuvres and disputes. This is not restricted to Asia.
The White House, for example, has seen a constant revolving door of people and positions over the past summer in what is a time of continued hyper-competition. One can’t help but be reminded that in business – and particularly in family business – trust and productivity always goes hand in hand.
The growth of mistrust within organizations influenced or controlled by families will only contribute to a corporation’s decline and possible eventual demise. Consider in recent times the developments at Samsung or even the relationships between North Korea and South Korea or Great Britain and France in the Brexit initiative. The eventual consequence for continued mistrust is ruined relationships that may not be repairable for generations.
In the study of family wealth, it’s interesting to note that, according to Forbes, Hong Kong can boast 67 billionaires in US dollar terms this year, while multimillionaires number more than 59,000. This might mean that family affairs and disputes will become even more public and prevalent than ever over the next decade as baby boomers begin to retire and family businesses are handed over to the next generation.
Whilst these emerging family disputes create more clients for mediation and arbitration agencies, it may be helpful to recognize that family disputes typically arise from an inability to separate the business from the personal lives of family members. And although mediation can often be helpful, unless common goals and an understanding of the forward-looking growth strategy of the business is agreed upon, unnecessary and extensive conflicts can prevail quite often for decades.
Emotions and nepotism can also run very high within a business, despite our insistence that nothing said or done is personal or prejudicial. In fact, the reality is that in every family affair it is always personal.
Think carefully as you strategize your company for this next year. Ensure you’re being competitive but have considered inclusion of family members, as well as their thoughts and feelings.
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