Entrepreneurship and Family Business

Question: Discuss about theEntrepreneurship and Family Business. Answer: Introduction Different types of business exist in the world. Some of the businesses are run by a single owner, double owners or by family business. At some part of the world, the family businesses are not being successful, whole in some part of the world, the family businesses were not able to perform as per the requirement of the market (Mohan, 2016). UAE has been a place that saw a tremendous growth among the family business (Ezziane, Mazzawi Leleux, 2013). The essay will look into the challenges and the advantages faced by the family businesses operating in the UAE it will look into the contribution of the family business for the economic growth of the country. Finally, the future of the family businesses will evaluated at the end. Issues Faced by the Family Businesses Even though the position of the family business is quite healthy in the market of UAE, the sector faces certain issues (Khazaeli Barrett, 2014). They cannot separate the ownership or the management, the owner has to handle it all. If the next generation were not capable enough to carry forward the business, the owner of the family business would face issues regarding the continuity of the business in the future (Shahid, Bodolica Spraggon, 2014). As the family members will be present in many important positions, it might give rise to issues related to professionalism. The roles and responsibilities might not be divided equally among family members. The business might get concentrated in one of the geographic locations. In addition to this, the number of employers would not grow and hence, there will be no de-risking plans (Martin Terc, 2016). The financial risk will be more because of the weak pension plans. The next generation of the family might not be interested in business. As a result, there will be issues with the succession of the business. Opportunities Faced by the Family Businesses When on one hand, the family succession in UAE are facing issues, there are better part of the business as well (Tipu Ryan, 2016). The decision-making process is quicker and lesser amount of fund will be utilized for making the decisions in the organization (Ibrahim Al Marri, 2015). In addition to this, there will be better trust among the employees in the organization and they will have shared vision (Bahrami, 2014). There will be flexibility among the members of the group (Martin Terc, 2016). When the company will be working with the family, the employees will be always ready to help the company (Tipu Ryan, 2016). The family businesses in UAE are performing well when compared with other parts of the world (Ibrahim Al Marri, 2015). A survey that has been carried out by PWC shows that the 79 percent of the families in the UAE experienced sales growth as compared to the 65 percent of the sales growth that has happened in the family businesses in other parts of the world (Khazaeli Barrett, 2014). Contribution of Family Businesses for Economic Growth Family businesses are an important part of the economic growth in the UAE. Family business have made their presence felt in a number of sectors like manufacturing sectors, retail, automotive, real estate and fashion. One of the studies has shown that family business take up to 90 percent of the business community in the UAE and their contribution is about 75-90 percent of the $500 billion trading activity (Mohan, 2016). They have more than $2 trillion of global wealth and family businesses have the capacity of employing more than 17 million employees in their companies. The DIFC Chief Economist, Nasser Said supported the fact by saying that the families hold the two-thirds of the boards of UAE and there is more than one family member in the boards. Analysis of Family Businesses in UAE The owner of a family business talked about the issues that they are facing while running a business. The director of Al Fardan Group, Osama Al Rahma spoke at the Family Business Forum of the Internal Audit Festival on his experience on family business (Ezziane, Mazzawi Leleux, 2013). According to him, the family businesses in the UAE are being able to survive mainly because they are facing a lack of governance. The Head of Corporate at Hadef and Partners in the UAE, Sameer Huda feels that the conditions of family business in UAE are no different from the rest of the world. We on one hand, some of the family businesses have been successful, while on the other hand, some could not have been able to go more than the second generation. The factors that should have helped the company to survive in the market are proper organizational governance, corporate planning, succession planning and corporate governance. A study evaluated forty-four businesses in the UAE, Palestinian Territories, Kuwait, Saudi Arabia, Oman,Lebanon and Jordan in spite of the recent improvements in the business operations, the businesses were facing issues with governance and succession for the business (Shahid, Bodolica Spraggon, 2014). Conclusions After going the scenario of the UAE and the conditions of the family business, it can be said that family business will prove fruitful for the economic growth of the country. The family businesses have advantages as well as issues. The people who are running the family businesses are suffering from problem with governance and issues with succession. The maximum time that the business is running is until the third generation. Some of the advantages that are faced by the organization are that they will get flexibility in the business and better relationship among the members. As the family is into the business, they will understand the problem and work accordingly. In spite of the difficulties faced by the family business, they are able to contribute for the economic growth of the country. Recommendations It can be recommended that the young people who are in the verge of entering the professional field should be taught about the importance of entrepreneurship. Once they will get to know the benefits that they can get from running a business of their own, they will be able to carry on the family business. References Bahrami, S. (2014). Entrepreneurship intentions and perceptions in the UAE: A study of moderating effects of gender, culture and family.International Journal of Small Business and Entrepreneurship Research,2(4), 37-50. Ezziane, Z., Mazzawi, E., Leleux, B. (2013). Entrepreneurship in family business: emerging storyline 2.International Journal of Trade, Economics and Finance,4(3), 164. Ibrahim, M. E., Al Marri, A. (2015). Role of gender and organizational support in work-family conflict for accountants in UAE.International Journal of Commerce and Management,25(2), 157-172. Khazaeli, M., Barrett, M. (2014). Case study: the al-Awadhi brothers: the story of two Emirati entrepreneurs.Governance in Immigrant Family Businesses: Enterprise, Ethnicity and Family Dynamics, 10. Martin, W., Terc, M. (2016, January). Family Business and Islamic Business Ethics. InUnited States Association for Small Business and Entrepreneurship. Conference Proceedings(p. FU1). United States Association for Small Business and Entrepreneurship. Mohan, D. (2016).Transforming UAE Family Businesses(1st ed.). Browne and Mohan. Shahid, A., Bodolica, V., Spraggon, M. (2014). Zayed Al Hussaini Group: The road ahead for the family business in the UAE.Emerald Emerging Markets Case Studies,4(1), 1-23. Tipu, S. A. A., Ryan, J. C. (2016). Predicting entrepreneurial intentions from work values: Implications for stimulating entrepreneurship in UAE national youth.Management Decision,54(3), 610-629.