Doctoral candidate aims to help businesses keep it in the family

A Southern Cross University researcher is taking a close look at how Australian family enterprises can optimise their chances of retaining ownership of their business generation after generation.

Doctor of Business Administration (DBA) candidate Tony Scotland, who has 30 years’ management experience, aims to explore the keys to success behind third and fourth generation enterprises.

Mr Scotland said that family businesses were vital to the Australian and global economies.

“If you define a family business as an enterprise in which the family has greater than 50 percent control, then Wal Mart, BMW, News Corporation and the local deli all fall into this category,” said Mr Scotland.

“In Australia, research has shown that family businesses account for around 80 percent of all businesses and employ approximately three million people.

“As a significant, even dominant component of the Australian market, it is essential that we continue to expand our knowledge in this area.”

It is estimated that only a third of family enterprises survive to the second generation, while even less survive to the third.

Mr Scotland will be carrying out case studies on five Australian family enterprises in an attempt to identify the factors behind these figures and what can be done to improve them.

“When a family business collapses it is often not for lack of trade or inferior business practice but for preventable reasons such as family conflict or poor planning,” he said.

“My research will explore the role that issues like corporate governance and healthy family dynamics play in the success stories of this sector so that survival rates can be improved.”

The research will include a series of in-depth interviews to examine themes such as sibling rivalry, the role of central members of the family both bloodline and non-bloodline, and the differing challenges facing second and third generation family businesses.

The project is due to be completed at the end of 2009 and it is hoped the findings will make a significant contribution to the body of knowledge in this important field.

“When controlling family ownership is transferred to the next generation of the same family, there is minimal disruption to the operations and values of the business,” Mr Scotland said.

“Given the importance of family businesses in the Australian economy, supporting them to improve succession outcomes will be of benefit to the economic growth and employment opportunities of the future.”