problem in the family business
Author: Hector
Although its role in private sector business activity is very large but most family businesses do not last long because it failed in leadership succession and not able to handle internal conflicts as well.
In a conference on family businesses in Jakarta, Thursday, Director of the Jakarta Consulting Group AB Susanto of Indonesia explained that family businesses can survive until the third generation and only 24 percent until the fourth generation which is only five percent.
Recent survey by the Jakarta Consulting Group also showed that only three percent of the family company that was built in 1932-1943 who survived until now.
While the family business that was built in 1944-1955 and only two percent of family business that began in 1956-1967 only 10 percent survive.
Family company that was built in 1968-1979 and in 1980-1991 who survived until now each one as much as 24 percent.
Susanto explains the main problems faced by family businesses in maintaining business continuity is a conflict between family members, succession of leadership failures and problems in locating family members in business.
All three, he said, is a recurrent problem in the family business in addition to problems of management structure, distribution of compensation, competence, and the misalignment between the interests of families and businesses.