ILAN-I Inc.K.-2*

World-renowned management consulting company McKinsey & Company In its report on companies established and managed by families, it emphasized that family companies around the world are now becoming more important than ever, and dominates 90% of the global GDP. He said.

Fortune One-third of the companies listed as Global 500 Companies determined by the magazine are family-controlled companies, and among the major companies in Europe, this percentage is in the 40%.

According to the same study, the presence and dynamism of family companies are particularly prevalent in developing countries, with the proportion of family companies reaching 60% among private companies with turnovers of over US$1 billion. To be a little more specific, in Southeast Asia, it is 85%, in South America it is 75%, and in the Middle East it is 67%.

According to McKinsey's 2025 expectation, as developing countries continue to grow, the dominance and success of family companies will continue to grow.

While this is the case around the world, regardless of its size and number of employees, we have to accept that the management reputation of many family companies is not very high. Of course, retinues do not break the rule, and there are a lot of successful family companies, but in general, the existence of managerial problems in companies where the family is influential cannot be denied.

As a management consultant, the most accurate way to identify the management problems of family companies is to approach the business of family members in the company's decision-making position. When one asks oneself, "Is the company's interests important or my personal interests?", the company's future is largely determined by its sincere response. While the companies that put the company's interests above their own are successful, the managers who say, "How can I benefit from this?" are able to sacrifice their company for their short-term interests and drive their company to disaster with them.

According to the generally accepted belief, companies in culture where rules are pre-determined, which value people, labor, rights and law are considered "institutional", while companies where rules are absent, or where family members are arbitrarily enforced according to their interests, where everyone is assigned office due to their surnames or biological ties, where employees from outside the family are considered unreliable are defined as "family companies".

In our next article, we will continue our writing sequence by including good and bad examples that fit the definitions above.

Varol ÜNEL
vunel@inovakademi.com

*A.Ş.K. : Corporateization in Family Companies