Excluding State Economic Enterprises, 65-85 % of the companies belong to families throughout the world. It is known that 40% of the companies mentioned in Fortune 500 are family companies.
Family companies are the most common company type worldwide. But while some of the family companies succeed and survive through generations, some of them fall apart and dissappear. A succesful and permanent family company is defined as a company able to make the right projections and plans for the future and built up an institutional structure. ARGE guides family companies through their work to determine the strategies for the continuity of the company’s business and to built up an institutional structure.
Alarming signals both for business and family issues showing the necessity of a transformation for family companies are: recessions in the business areas where the company had been succeeding in competition, negative developments in quality and customer satisfaction, decrease in profits despite unchanged or increasing sales, continuous problems in cash flow, higher employee turnover, declining motivation and increasing tension among the employees. Problems within the family and negligence of their effect upon business, several divorces/re-marriages and health problems like ulcer and depression caused by stress among family members, using money to keep family relations alive, are the occurrences that sometimes take place. A successful and permanent family company is a company that is able to make the right projections and plans for the future through an institutional structure according to the possible outcome in the course of events.
ARGE groups the problems of family companies as follows: management of the company (establishment, development, maturation), relationships within the family (boss-owned company, partner brothers, consorsium of cousins) and partnership/ control structure (entreprenuer, businessman, work partner, handover of responsibilities).
Every family company is on some intersection point of the family and business axis and is moving from there to an other intersection point in time. On every point there are questions waiting for their answers.
It is very difficult and maybe even impossible for a company to go on developing if these questions are not answered. Strengthening of the family relations and the problem solving ability among the family members provide great advantage for family companies. Another method to overcome difficulties that family companies face is to determine policies and strategies that will prevent potential problems.
“Obviously unsuccesful family companies are avoiding problems and conflicts. Closing their eyes to the facts, they are missing the chance to enjoy learning lots of things together.”
These words belong to a leader of a succesful company and they summarize the most apparent characteristic of family companies.
Guiding the family companies through the process to solve their problems systematically and helping them to become companies of the future using the correct management methods, ARGE also provides the family to overcome lots of problems that will affect its unity in a negative way.
Quality Improvement Results
1. Production line loss decreases by 2%
2. 26% improvement is provided in terms of service delays
3. Total stocks decrease 4 times
4. Customer complaints decrease by 32%
5. Efficiency of new product development increase by 78%
6. The bad fate of Family Companies
7. 70 % of the family companies are not able to survive for the next generation
8. 50 % of them are not able to survive for the third generation
9. The average lifetime for a typical family company is 24 years