Thursday , June 20 2024

Generation gap a challenge for family businesses

The generation gap is the biggest challenge facing owners of family businesses in Vietnam, with differences in ideas between younger and older generations likely to hamper business growth, a survey has found.

Pham Dinh Doan, chairman of investment firm Phu Thai Holdings and the Vietnam Family Business Council, said that the generation gap could create obstacles for owners in planning a successor.

“Without a property transition plan, the family business could weaken during unexpected events,” he told a forum on family business Tuesday.

Nearly two-thirds of family businesses in the country report frequent conflicts, but do not focus on building trust between members, according to a survey by professional services firm PwC Vietnam of 36 family business owners.

It also found that 42% of current owners and their successors lack trust.

Tran Van Thang, assurance director at PwC Vietnam, said that leaders of family businesses, not only worked together like in a normal company but also shared a history, value and vision.

However, such components were often taken for granted, he added.

The lack of trust could lead to conflicts and business failures. 64% of respondents said that they often see conflicts in family business, higher than the global average of 30%.

Such challenges have been experienced by Vuu Le Quyen, CEO of footwear maker Biti’s.

“I was not an obedient child. I often challenged my parents and asked them why we had to do what we did,” she said.

As Quyen took over the business she changed the values of the company from “working out of fear” to being “happy to work.”

Creating an atmosphere for everyone to be heard is the key to ensuring a smooth operation, she added.

Kao Sieu Luc, CEO of ABC Bakery, said that forming a business was hard but ensuring the business lasted was even harder.

A family business cannot be considered successful until a suitable successor is found, he said.

“Convincing my child from abroad to return and take over the business is an art,” Luc said, adding that he had to show his child the bright path of running a business in Vietnam.

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