Family Business Overcoming Challenges

Nipun Dhaulta, Contributor

Surpassing the Challenges faced by Family Businesses in UAE and MENA region

The business share of family-owned businesses in UAE and MENA is the most. Having discussed the challenges faced by these family businesses to retain their existence, now is the turn to discuss strategies and planning which a family enterprise should perform to overcome the hurdles and repeatedly attain the undefeated position.

  • Communicating the similar values: Be diversified in your actions and united in your thoughts!

Business having a Conglomerate portfolio is not a challenge it is rather an opportunity to diversify the business and expand, although it becomes a challenge when the diversified business loses its vital essence. The family businesses should understand that despite having various members and various business lines the mission and vision of the business for each member should be the same. This would make the establishment of the business endeavor even more grounded and the fundamental motivation behind having families into business will be better off.

  • The Pressure of family business: to stay, to succeed, to maintain and carry on the legacy

It is often witnessed that rather than letting the more youthful ones pursue the career within the area of their very own interest, the upcoming generations are pressured to carry ahead the family business. The pressure gets more intensified when the individual is also anticipated to hold and even continuously enhance the image and profits of the companies. The pressure goes on and is passed on further and hence, along with the business, the pressure is likewise redirected as the legacy to the coming generations.

  • Substituting responsibility in place of pressure: Practice what you preach!

It is apparent that in each family whether engaged with business or not, the youngsters, intentionally or subconsciously emulate their seniors. The elder generation wanting the younger one to carry their family business ahead is a very compassionate want and so to speak would also be the desirable one from all perspectives. Saying that the newer generation should be left free to make choices and be carefree would not be correct, they might lose track of their career. Instead, the elderly members need to conduct themselves and business in a manner that inspires the next generation and also time to time direct them towards the same, this direction could be in terms of education, giving minor tasks regarding the business, seeking for their suggestions and always being open to innovation and newness. This will likewise strike a parity in the knowledge of the two ages as one has gigantic experience and other has outrageous potential.

  • Family Succession Planning: Everyone need not to be treated equally but fairly!

The most vital and ironically ignored strategy for a family business is ‘Succession Planning.’ The family business is a great institution which should be lead by the person who knows how to keep the two together instead of being led by someone who is closest to the owner.

o The owner should start thinking about the succession planning years before his retirement, and this should not be the last minute call.

o There needs to be a unanimous call taken with rest of the members, regarding the parameters of choosing the successor although the final call remains in the hand of the owner. This helps to maintain transparency and also does not end up discouraging the family members.

o The decision of choosing the successor should also be made well in time so that before retiring, the successor could be trained and work close-by the owner for instilling values and vision which is known only to by the owner.

o It is understood very well that handing over the business is a tough call, there are trust issues, the owner is bounded to familial ties and so on. Therefore the successor should be trained and well directed to handle the business, and owner must make sure that successor fulfills the requirements of being a capable successor and is not accused of nepotism leading to non-acceptance of the successor by family members and society.

o Also, succession planning not only means choosing the right successor but also selection related to other positions (managerial and executive) need to be made. All the members should be treated fairly (if not equally) by offering them positions, they are capable of handling and should be counted on for business-related decisions and executions.

  • Application of Corporate Governance: Business is a formal institution and should be conducted in the same manner!

The informal structure the business heads it towards failure. All family Businesses in the UAE and MENA region need to practice the formal organization structure. It is difficult for the owner to be in a relationship and be fair at the same time. Therefore corporate governance is important so that each member is treated fairly and business is not affected because of personal clashes.

o Every family business should have the corporate hierarchy instead of the family hierarchy so that the communication flow and decision making is not affected and members can freely exchange views and information regarding the business.

o There should be family offices and councils to address the disputes of family members and make sure that personal issues do not affect professionalism of the members.

o A standard code must be set which governs the rules and regulation for all the members of the family working together and family councils need to make sure that each member is made to follow those rules irrespective of his relation with the owner.

o Allocation of human resources in an organization should not be on the basis of familial ties but on the basis of his/her knowledge, experience, skills and attributes concerning the business.

Nipun Dhaulta, Contributor

I am a freelance writer from India working on a broad range of subjects and shaping them into my writings. I have a keen interest in reading and covering the fields of Literature, History, and World of Business. I completed my Master’s in Business Administration in 2016 with specialization in Marketing and Human Resource. I have co-authored a case study ‘Means and Ends in Cross Border Marketing: Ethical Dimensions of Promotional Activities of the Online Casino’ which was published in Prabandhan: Indian Journal of Management. Alongside I worked on a conference paper ‘Managerial Philosophy for the Business environment of Volatility, Uncertainty, Complexity and Ambiguity (VUCA)’ which was presented at Abeda Inamdar Senior College of Arts, Science & Commerce, Pune India and highly appreciated.
I am working as a Teaching and Research Assistant, and have contributed to blog articles related to education, innovation, entrepreneurship and crowdfunding for Astrolabs which is partnered with Google in Dubai. I can be contacted at