Family Businesses: Challenges & Success

οικογενειακές επιχειρήσεις

Family businesses are an important part of both the Greek and the global economy. Of course, like most types of businesses, family businesses have both positive and negative aspects. They are accompanied by a unique set of challenges, especially when it comes to managing relationships between family members.

Challenges in Family Business Management

Having a family member as an employer – or being an employer of a family member – creates a complex dynamic. It’s quite difficult but important to go home and take off the shoes of the business relationship and put on those of the personal one.

Meritocracy is a given and necessary for any kind of business. In a family business, the line between personal and professional life is often blurred and achieving meritocracy is often a feat. This can lead to conflicts when family issues interfere with business decisions and vice versa. For example, a disagreement over a family issue can spill over into the workplace. This affects business relationships and business operations.

Differential Treatment Problems and Impacts

Differential treatment due to kinship is also a common issue faced by family businesses. The treatment can be more favorable but also more restrictive. An environment where there is no equal treatment and common lines of assessment can create tensions. Tensions that affect the company’s employees and therefore the performance and overall performance.

Within the family there are certain communication patterns that work effectively. This effectiveness does not necessarily work in the company context. For example, a parent may find it difficult to transition from the role of caregiver to a stricter role in the office. Conversely, children may find it difficult to see their parents as professional leaders rather than parental figures.

Conflict resolution can be particularly challenging. Moral dilemmas, conflicts, emotions and logic can easily clash. Family members may find it difficult to separate emotions from business decisions.

Advantages of Family Businesses

Family-Business Family-Business Of course, creating a family business, especially in Greece, has many advantages. Family businesses often have a longer-term perspective compared to non-family businesses. This vision can lead to a more sustainable decision making. Family businesses tend to have a strong, deeply rooted culture and values that guide their operations. This can foster a sense of loyalty and commitment among employees.

The close-knit nature of family businesses can make them more flexible and resilient in the face of challenges. Family members are often willing to go the extra mile to ensure the success of the business.

Tips for Successful Management

But how can the success of a family business be ensured?

The one and only Inspirational Transformational Speaker & Coach Marina Chereti, at the Women Do Business spring event, shared three tips.

  1. Anticipation and planning. It is important to develop solid business plans with clear goals, market analysis and financial projections. In family businesses, however, family-related projections must be considered. For example, if a family conflict arises, if one family member decides to leave or if another wants to join.
  2. Organizational chart. In order to be able to avoid tensions, a meritocracy must be established. Clear roles, responsibilities and the powers that come with each role should be given.
  3. Succession plan. Succession planning is one of the most critical aspects of a family business. A well thought out succession plan ensures a smooth transition of leadership and helps prevent power struggles. Many businesses fall apart when it comes time for succession. There are many times when the first generation does not allow the next to take the reins completely. Other times it is not clear which of the siblings has the role of being in charge.

Statistics on Family Businesses in Greece

  • Lifetime: Only 3 out of 10 family businesses pass from the first to the second generation and only 1 out of 3 to the third generation.
  • Contribution to national GDP: Family businesses in Greece contribute about 60% of the country’s GDP.
  • Employment: About 80% of private sector jobs in Greece are created by family businesses.
  • Succession: 50% of family businesses in Greece have no formal succession plan, leading to instability and potential problems when founders retire.
  • Growth: Family businesses in Greece are often more conservative in investment and growth due to the risks associated with maintaining control and family ownership.
  • Impact of the crisis: in the financial crisis, 75% of family businesses in Greece said they suffered severe losses, but 65% reported that strong family values helped them to survive.
  • Innovation: 85% of family businesses invest in innovation, compared to 57% of non-family businesses.
  • Employee Loyalty: employees in family businesses show higher levels of loyalty and commitment, with rates 30% higher than in non-family businesses.
  • Social Responsibility: 70% of family businesses are actively involved in social responsibility activities, compared to 50% of non-family businesses.

family business statisticsFamily businesses play a unique role in the business world, characterized by a mix of personal and professional dynamics. The advantages are quite important for the success and development of a family business. It is therefore important to take appropriate measures from its creation.

Article writer: Katerina Faili

Translated by: Nectaria Lambropoulou

Article Editor: Sofia Dialiatsi

Recent Articles

Scroll to Top
Skip to content