Family-owned enterprises will remain a major pillar of Thailand's economy in years to come despite a substantially altered business environment, says the University of the Thai Chamber of Commerce (UTCC).
Prof Akachai Apisakkul, the dean of UTCC's business school, said family businesses will continue to make up 70-80% of the country's businesses in the long term provided that Thai culture remains the same.
"It's natural for Thais to set up family businesses. Eastern countries have a culture of living together and taking care of the family. This is different from the West," he said. "You can see that most successful Thai companies are family businesses."
Prof Akachai, who is also the director of UTCC's Family Business & SMEs Study Center, said family members tend to have more decision-making power and inspiration than do professional executives.
They love the business because it is their own and supports the ones they love, he said.
However, family enterprises must adjust and find ways to manage their operations to maintain competitiveness, especially once the Asean Economic Community (AEC) launches in 2016.
The AEC will provide opportunities for businesses to expand, especially in the agriculture, handicraft and spa sectors, said Prof Akachai.
UTCC has extensively studied the topic of family businesses and organised training in business management for 500-600 families.
Prof Yamato Sato of Keio University's business and commerce faculty said Japan has 50,000 family businesses including 4,000 that have been established for more than 200 years, 2,000 for more than 300 years and 21 for more than 1,000 years.
Some 40% of listed Japanese companies are family businesses.
Family-owned small and medium-sized enterprises are mostly in the alcohol, hotel, handicraft and food sectors.
Prof Sato said more family-owned business are expected to hire professionals to become chief executives, as inheritance tax is high at 50%.
The Japanese also place more importance on the survival of their businesses than relationships.
However, second-generation executives have received credit for contributing to an increase in revenue in recent years, as they have graduated from business schools and had experience working at other companies, said Prof Sato.
About the author
- Writer: Nanchanok Wongsamuth
Position: News Reporter