Viability Of Family Business In Egypt

Based on worldwide reports, 90% from the companies in the centre East are family firms that lead 80% from the national earnings and constitute about 75% from the private sector’s activity and rehearse 70% from the labor pressure. However, family companies in the centre East and Egypt are companies In most countries around the globe agree the continuation and development is limited towards the existence from the founder as the beginning of possibilities to carry on and gratifaction rates decrease using the next generations from the family, where worldwide data indicate that from every 100 businessmen, you will find 30 businessmen continue the work they do after dying, as the 70 Another two disappear their actions using the dying from the founder, the firms that Can continue before the 4th generation and also the fifth, the proportion of only 3% of firms that survived following the dying from the founder, which made the civilized world understand the chance of not ongoing the household companies on their own economies, and started to check out the causes of non-continuation of family companies and risks towards the economy and it is help continue to guarantee the ongoing development of its economy with lots of assistance, such as the decrease in taxes and participation in the price of support programs for that continuation of family companies yet others.

The problem in continuity is a result of the character of family companies, particularly the overlap between family, management and possession, which is among the distinguishing options that come with family companies, which is among the primary causes of creating intergenerational tension. This affects the continuity from the family and also the business simultaneously. Within the lack of ability to carry on in the second generation from the family, however in the removal of family relations by benefit, and noticed that the household firms that have hung on to the continuation from the third and 4th generation is the one which been successful in preserving the household and the organization that is interested in the beginning from the metabolic rate from the family jobs are obvious and information on all relations and policies and mechanisms to guarantee the decrease in tension in most stages of continuity or exit and distribution of rewards, and noticed that there’s no model of merely one labor metabolic rate relevant to any or all companies, each company determines the metabolic rate of their work based on the nature of activity Family conditions and also the abilities of successive generations from the family as well as their readiness to operate the game using their own understanding or with the aid of assistants from abroad. The accrued experience with the household companies signifies the continuation of the organization for that 4th and fifth generations is really a joint responsibility from the founders and also the children. Successive generations.

Furthermore, It’s noted the family company doesn’t witness variations within the first generation stage due to the sole decision-making from the founder as the tension starts to decide beginning in the second generation and subsequently generations of kids and grandchildren, in which the variations increase because the family expands and expanded the needs of their people from the organization symbolized in demands for participation in management The greater jobs, profits and so forth. Thus, the issues of family companies decrease as well as their likelihood of survival increase because the family expands and increases profits and production.


1- Tensions will decrease whenever the founding father of the organization or even the board of company directors from the family to build up the charter of family work early, stressing the necessity to observe that the choice to continue the organization isn’t born from the moment, but needs formulations and rehabilitation for not under fifteen years prior to the next generations overlap within the decisions of the organization, Which the guidelines for rehabilitation from the transition and backbone of what causes tension ought to be transparent and obvious. Which there’s a household council searching to see relatives problems and the other administration thinking about running the organization from family concerns and problems. Also, that family companies will also be susceptible to corruption, illegal practices, fraud and deceptiveness, especially even without the accurate systems of internal control from proprietors.

2- To inspire the introduction of legislation within the laws and regulations and legislation managing the establishment and control over Egyptian companies when it comes to construction and management generally and family companies particularly.

Show More

Related Articles