Family-controlled firms in Asia likely to prevail

Family-controlled firms in Asia likely to prevail

MANILA (Reuter): Family-controlled businesses in Asia are likely to prevail despite competition from multinational and publicly-held conglomerates, prominent Asian businessmen said yesterday.

"I believe that the family business is a dominant form of private enterprise...and will continue to grow and prosper in the future," Azman Hashim, chairman of the Arab-Malaysian group, said at a forum of Asian and Pacific businessmen.

He said many successful American businesses were still controlled by families.

Arab-Malaysian is Malaysia's biggest financial house. The group is family-owned, while its subsidiaries are mostly publicly held.

Azman said the perception of family-run businesses as inefficient and unprofessional was unfounded.

"As the business grows bigger, you have no choice but to run the business professionally. Otherwise you cannot grow. It is a natural evolution to get into professional management," he said.

Top-tiered professionals can either be hired or come from qualified family members.

Michael Tien, chairman of the textile giant G-2000 Group, said it should not be an issue as to whether the company is being run by outsiders or family members as long as it is run by competent and qualified individuals.

"After all is said and done, it depends on how good (a chief executive) you are," Tien said.

Manuel Pangilinan, managing director of First Pacific Co Ltd, said Asian family businesses have traditional strengths that help them succeed in their fields. The Salim family of Indonesia is the biggest shareholder of First Pacific.

He cited the wide network of relationships that give them excellent business intelligence, flexible contracting and geographic reach, good access to capital, strong entrepreneurial spirit, and considerable flexibility to move into new businesses and out of existing businesses.

Pangilinan, however, said issues of succession, vulnerability to family squabbles, and distinction between family interests and business interests might slow its growth.

"But weaknesses can be overcome with sound strategic planning and effort to professionalize the business," he said.