Nearly two thirds of all companies around the world are family-owned businesses. In her doctoral thesis, Marta Widz looked into which external factors influence the founder of a firm to turn it into a family firm and pass it on to the next generation.
Family firms are the most popular form of organisation: They represent around two-thirds of all companies worldwide, and create nearly 70 per cent of all jobs.
All owners of family companies must at some point in time wrestle with succession decisions: Should the company be passed on within the family, should the external CEO be hired, should it be sold or maybe even liquidated? Specific succession intentions are the turning point: if the founder is inclined towards intergenerational succession, this is exactly when a founder firm becomes a family firm.
In her doctoral thesis "When does a Founder Firm become a Family Firm: Institutional Antecedents to the Entrepreneurial Exit Options", Marta Widz examines the institutional aspects that shape the preferences of firms’ founders to pass on their firm to a successor from within their family.
Poland: free market economy for just over 25 years
Originally from Poland, Marta Widz has been – with a great curiosity, though from a distance – observing the quick transition of the Polish economy. With its short, 25-year history as a free market economy, Poland has not yet had a chance to create a powerful base of family businesses. A majority of businesses are now in the hands of the first generation who are approaching the pension age. This upcoming historical wave of first successions, many entrepreneurs will have to decide whether to make their firms family firms. In Western Europe, two out of five firm owners intend to pass the company on to the next generation. "In Poland the situation is different," says Marta Widz. "87 per cent of firm founders prefer a successor within the family."
Poland: future nation of family firms?
"When making their decisions, Polish firm founders are driven by aspects such as family values and parental altruism," says Marta Widz. "Subconsciously, they react to normative pressures in the form of expectations from their social and professional surroundings." Poland is a country with strong family values. This explains why nine out of ten firm founders want to pass on their companies onto a member of their family. With such a trend, in one generation there could be as many family firms in Poland as there are in any other Western European country, and in two generations Poland would substantially overtake its neighbours in the number of family businesses.
Source : <a href='http://www.freepik.com/free-photo/hands-holding-other-hands-wit-an-envelope_926643.htm'>Designed by Freepik</a>
XEDGlobal Programme Choices for Family Business
Harvard Business School- Families in Business
ISB Thomas Schmidheiny Centre For Family Enterprise - Family Business And Executive Education
ISB Thomas Schmidheiny Centre For Family Enterprise- Perpetuating The Family Enterprise
INSEAD Business School - The Family Enterprise Challenge