Family Business Conference to address major issues facing Family Companies

As globalisation gathers pace, family companies in the Gulf must adapt to dramatically changing market forces to survive and succeed.

Key issues to be addressed include: successfully managing the complex interactions of ownership, management and family dynamics; dealing with the difficult issue of succession; creating family councils; implementing a corporate governance policy and developing the next generation of leaders.

Among the major figures that will be speaking at the Family Company Management Conference in Dubai are:

- Mohammed Abudawood, Abudawood For Industry, KSA
- Khalid Kanoo, Kanoo Group, UAE
- Dr. Abdellatif Khemakhem, Saudi Binladin Group, KSA
- Mohammed A. Basamh, Basamh Trading Co., KSA
- Imad Kamal Sultan, W.J. Towell & Co, (L.L.C)

These companies alone represent some of the most advanced businesses in the Gulf, with world-class administration and management. Mr. Mohammed Abudawood will deliver the keynote address. As one of the region's most influential intellectual leaders, Mr. Abudawood will explain how companies can survive the transition - Restructuring Family Companies: Survival Of The Fittest.

Family Companies have experienced profound and qualitative changes in their evolution. Currently, family companies in the region are continuously dealing in two dimensions: responding to changes in the external environment and developing simultaneously the internal resources to improve the competitive edge of the firm, while paying a great deal of attention to their basic and underlying "culture".

The hallmark of the Arab GCC firms is "entrepreneurialism", whereby behaviours of the CEO are coupled with an organisational structure supporting such an outlook. Maintaining the balance between entrepreneurial activities and formal organisational structure is what most traditional merchant firms are engaged in.

Today we find that the organisational structure of most companies is "organic" rather than "mechanistic" whereby channels of communications are open with operating styles being allowed to vary. Decision making authority is becoming less based on family position and more on the expertise of the managers. Organisations are allowed to adapt to changing business circumstances with full participation of managers and frequently on the basis of group consensus. As such, family members "being the entrepreneur" are engaged mainly in furthering and communicating the main line goals and strategy of the organisation to line managers and the outside world.

Historically, most GCC companies acted essentially as intermediaries between foreign producers and local consumers. Many started as agencies for well known manufacturers and becoming importers of anything from watches to aircrafts.

Global economic turmoil spurred the GCC Governments to restructure and rationalise their economies. This in turn challenged family firms and created stresses that profoundly affected traditional organisation as they endeavored to adapt to the new environment.

Meteoric growth undermined many old systems of living and doing business. Family businesses had to change and learn "how to learn". Most did it through the rational "management of change". Others are still struggling in order to bring themselves more into line with the business standards of the rest of the world. Companies in the region are constantly striving to formulate the conceptual matrixes on which to base their future course.

Today the modern GCC company is increasingly adopting new organisation structures and replacing its hierarchies with networks, experimenting with benchmarking, empowering the lower tiers, avoiding excessive specialisation, putting more emphasis on training and offering greater employment stability, while at the same time retaining its core anchor of conservatism derived from its unique system and ecological reality.

The message is that the traditional family company in the GCC is in continuous internal change that is constantly eroding old practices. The process it used to arrive at a total strategy was usually fragmented, evolutionary, largely intuitive and employing more opportunistic and ad hoc systems rather than strictly formal ones.

The type of business, the managerial competence, the intensity of competition, the turbulence of the environment and different cultural conditions call for a posture that is coherent with this reality.