Issue 16

ERENET Profile Vol. IV, No. 4.
www.erenet.org
Pavla Odehnalová
Department of Business Economics
Faculty of Business and Administration, Masaryk University
Brno, Czech Republic
E-mail: 63229@mail.muni.cz
Abstract
FAMILY BUSINESS SURVEY 2008
This paper includes the results of the empiric research made by the Masaryk university in 2007 concerning the
„Competitiveness of companies“. Consequently the research was enlarged on the family business. Research mainly
concerned on the group of stakeholders as suppliers, consumers and employees. Results from this research were
compared with these gained from the research made in Western Europe and USA. Some findings concerning the
behavior of family business were the same, but there are also findings which differ from findings from foreign
research. This paper also tries to get the interpretation of different findings, and search the causes of these
differences.
Key words: family business, competitiveness, ownership, suppliers, consumers, employees
Introduction
Family business may be designated as the cornerstone of national economies. Before the World Wars
we can say that family business had very strong position in Czech Republic. As far as the diversification of the
industry is concerned we can mention especially textile industry, shoemaking trade, brewing industry, glass
industry and many others. All these types of industry were held by families. After the World War II everything
changed. In 1948 the communism era began and all of the private property was nationalized including the big
family business. In the 1989, Velvet revolution started new era of democracy. The main goal of economic
policy was transfer from nationalized property into the private property. The transformation process was
realized by the voucher privatization. The big nationalized companies went to the public in the form of private
property. Even if many politicians talk about termination of transformation process, it has been perceptible
until today. A large number of enterprises still face to many problems connected with the privatization.
By the end of the last century, at the early 90s many of small and medium businesses appeared. The
most of family firms followed the business that was created by its ancestors before the communism period.
Such beginnings were very hard especially for the family business. Practically no investment had been made in
this machinery over the previous fifty years. The family firms were also heavily in debt and their original
production programs were often scattered through many other state enterprises, with little chance of recovery.
Also, the prevailing economic and political conditions were volatile as a result of economic transformation
that had been taking place.
Such conditions formed family business completely different from the family business in other
European countries. The main problem in Czech Republic is the legal framework of family business which
could be useful but still does not exist. Family business is included as small and medium business with no
closer specification. Whatever consultant firms are still not interested in the family business. It brings many
problems to owners of the family firms.
Methodology
In last two years the Masaryk University made a research concerning the competitiveness of Czech
companies. Research was concerned on the basic sample of 432 companies. There were 91 companies in the
basic sample that was characterized as the family business. As the main definition of family business was taken
the definition by Sten, (2007, p. 172): “There needs to be at least two family members involved in order to
classify the business as family involvement.” The basic sample of companies was set up from the companies
with these characteristics:
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