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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: 34
ERENET Profile Vol. IV, No. 4. www.erenet.org • number of employees is 50-250 workers • join stock company, limited company • building industry, manufacturing industry The results presented in this research are the result of the primary analysis. After the primary analysis were found scores of differences between family and non-family business. The results of this primary analysis are compared with the results of the research made in the family business in Europe and USA. For the primary analysis was used the SPSS program and the main differences were identified by the cross tables. Results The results are divided into the categories internal factors of competitiveness, external factor of competitiveness, and relationship with stakeholders. Internal factor of competitiveness The main differences between family and non-family business within the Czech Republic were found in these categories: financial efficiency, the innovation of production, consumers care, and level of qualification of employees. Similar results can be found in the research made in the Europe and also in the USA. 15 Family business is focus especially on the product range and product design. Family business is also more then nonfamily business focused on the consumers care. Interesting result is also the lower qualification level of employees within family business. This can be caused by the high social responsibilities which are in the family business, what was proved by the American business survey in 2007. Financial efficiency The majority of the family business had better financial indicators then the non-family business. Within the financial indicators were monitored the return of assets and the rate of grow of assets. Graph 1: Financial efficiency Financial efficiency 60,00% 52,70% 50,00% 40,00% 30,00% 20,00% 46,00% 43,70% 39,60% Non-family business Percentual Family Business Percentual 10,00% 10,30% 7,70% 0,00% A B C Source: Processed by author 15 Making a difference. The Pricewaterhouse Coopers Family Business Survey 2007/2008 TYEE, L. N., Family to family, Family business study, Seattle university: Oregon, 2007 American business survey. Mass mutual. Kenesaw State University. Family Firm Institute.2007. 35
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