Alright Good morning, everyone and welcome to the next virtual master class at Asia School of Business. I'm really excited because today, we're going to be talking about a topic that I think is salient for both Asia and 21st century businesses that are looking to scale up and we're focusing on specifically family businesses and how you can take your family business to the next level and.
Hopefully have strategies to both scale and you know help the family business last beyond multiple generations. So I'm joined with Prof Ambrose Ellie, who will introduce herself in a bit so I'm going to hand this over to her now.
Gabrielle Barnett
08:01:30 AM
I can't hear anything
Brian Sun
08:01:35 AM
I'm sorry, but the sound seems to be off
Jodie Manale
08:01:37 AM
Can't hear Prof.
Susan Mishra
08:01:40 AM
Can't hear
Karmen Koh
08:01:40 AM
same
Helena Cada
08:01:42 AM
Me too
Irvin Michael Salise
08:01:50 AM
Same
Jeshua Choong
08:01:53 AM
No audio
Richard Ii Liao
08:01:56 AM
same
Luís Fernando Tinoco
08:02:01 AM
same
Cindy Chua Enriquez
08:02:06 AM
same here
Irvin Michael Salise
08:02:08 AM
Hi liao
Fazila Hashim
08:02:29 AM
Thanks for letting us know - we'll sort it out
This is Kenya can you hear me now?
Rodrigo Rodriguez
08:02:55 AM
Yes
Luís Fernando Tinoco
08:02:55 AM
yes
Gabrielle Barnett
08:02:56 AM
Yes!
Jodie Manale
08:02:58 AM
Yes
Irvin Michael Salise
08:03:00 AM
OK, yes, so I was trying to introduce myself so I was saying that I have been here. It is be as assistant professor of Management and organization since August 2017. I'm originally from Italy and I received my Bachelor and master degrees in Management Engineering. So I'm an engineer by background that I moved to Lancaster University in 2006, is 16 to do my PhD in management with like a focus.
Fazila Hashim
08:03:45 AM
All good now?
On the family businesses. I was part of the Center for family business at Lancaster University after Lancaster. I moved for a quick while to Concordia University in Montreal, where he joined the family business group and after that. I was visiting at the MIT before joining against V in the 2017 but let me explain Watt made me really passionate about family firms.
Eloida Grace Sanchez
08:04:03 AM
yes
Irvin Michael Salise
08:04:09 AM
Yes
And especially about studying family firms and their dynamics. First of all. I'm Italian and in Italy family businesses represent almost 70% of the total businesses.
Fazila Hashim
08:04:20 AM
Thank you for your patience :-) Enjoy the webinar
Secondly, uhm, they also represent the 94% of the total workforce. I'm sure that you are aware of firms like Ferrero fears. Labasa all these firms are family firms. If you think about the annual family who owns feared but also Ferrari. Also, the U Ventus team, they annually family itself owns 10% of the Italian Stock Exchange second reason.
Uh why I got passionate about family, firms was because my father family is only runs a small business in Italy in Tuscany and so I'm pretty aware of the choice but also of the pains and the struggles that having a running a family be a family business implies.
Angela Alam
08:05:26 AM
Cant hear
And from a theoretical and academic point of view. I was really high thinks track and uh a surprise when during my Masters. I radar for Chandler book divisible and and the visible and is a book from 1977 and in the book helpful. Chandler was saying. That's basically family firms were relics of an earlier am here are an somehow with a destiny of like this appearance.
In favor of public companies, which were considered by Alfred Chandler superior to family firms, but actually 33 years later. Nowadays, we still observe alike family firms mainly I will say the most prominent business kind of worldwide actually family business make up to the 70% of the world's Co an provide many of the commodities and necessities of our life, so think about when you have to buy grocery you go to Walmart.
Angela Alam
08:06:12 AM
Still cant
Walmart is a family firm you buy your Phone from LG. LG is another family firm. You buy your card. At 4:40 is a family firm. You read your news or you get your news for the New York Times, another family firm.
Irvin Michael Salise
08:06:48 AM
Its might be ur connection prob..
Better before entering into details of like 2 day presentation. I first want to define family firms because when I generally. I said, and I talk to people and I say I'm very passionate about family, from the 1st question that they really they they ask is what are family businesses so there are 2 main definitions and these are basically theoretical definitions so conceptual definitions and are based on 2 different models. So the two circles model which was proposed by dancing and colleagues.
Irvin Michael Salise
08:07:01 AM
It*
Uh, which says basically family firms at the as the overlap of two things stance that are pretty separate each with its own norms values structures and basically family businesses lie at the intersection between the family system and the business system on the other end and we have another model, which is which was proposed by capturing that is which says family firms at the intersection of Tremaine Circle.
Angela Alam
08:07:35 AM
I tried and still cant
The family system or Tremaine Subsystem, the family system. The management system and the ownership system. As you can imagine. These definitions tend to be pretty. Conceptual then operationalizing and really identifying family firms in the reality as being in fact.
Fazila Hashim
08:07:55 AM
@Angela - have you tried checking your speakers? Sometimes it's on mute
Uh pretty pretty challenging also from researchers and scholars.
Keith Tay
08:08:08 AM
We have no problem with sound. Try refresh your browser.
I can tell you that scholars have more or less converged towards this definition of family businesses. So a family business must have somehow these characteristics or a family or a small numbers of families must own a significant share of the company so ownership is this is the first criterion so generally there's a percentage is at least 50% in a a privately held company in private companies.
And at least 30% in public companies so first criterion. We said ownership the second criteria is that the family or a family is need to be able or F somehow an intention to influence or a desire to influence important decisions in the infirm and especially the change on that are related to the choice of the leaders of the firm the chairman and CEO.
And the 3rd criterion is related to the intention to pass the business to future generations. So these families or the family must have the intention to shape the vision of the business in a way that is sustainable across multiple generations. So these are the 3 main criteria that define what a family businesses.
According to history criteria. I want you now to try to visualize to envision in your mind. The prototypical family business, or maybe a family business that you may know.
I'm pretty sure that you were mine will look like the following so uh generally small or micro enterprises like a bakery shop. Aurora florist at the end of the street were you have lived or maybe they shop where you go to with your friends or the coffee shop where you have coffee in the morning, so actually most family business are young and small.
That's absolutely true and that's always been the case and it will always be the case. So it's it's as it is the case that the vast majority of businesses around the world are smaller than micro enterprises.
At the same time, we have to keep in mind that family business represents 70% of all businesses worldwide and especially they are very prominent form of business here in Asia, where they represent between the 1890% of all Asian businesses.
Animal Asia, they represent the 70 uh 6067.2% of the National GDP, and imply the 65% of the total workforce.
So uh if on one and a is absolutely true to say into state that Muslim agreed agreed majority of family. Businesses are small enterprises on the other end is easily to miss tickling conclude that family business equals small business. This is actually not true. In fact, 35 to 40% of the fertile 500 firms, according to Miller and Liberation Miller 2005.
Here in Asia 52% of the Top 200 companies in all, Asia are family. Businesses so think about it at a family in edit it at a group and it had a family in India, or the whole family, owing LG Electronics in South Korea.
And especially Malaysia. This 74% of the national GDP is the worth of the Top 15 so not all only the Top 15 of Malaysian family's assets.
And you can think about like very large family conglomerate here in Malaysian so ugly. Anga owned by the Quack family from Malaysia and Singapore. SBI knowledge by Forbes as the 7th richest family in Asia or they chanting better art group on the by the lame family. This is a pretty large conglomerate with starting in the casino and the hospitality and real estate business.
And now is diversified across several different industries and actually in the book dynasty is we see that let it land is from Arbor University, they must race that basically you can write and history of capitalism just described.
Sing this family dynasty is and the histories of family businesses around the world, So what ha fridge handlers had in the beginning is actually wrong and probably family business will be a reality and agreed. We basically represent capitalism for.
Over over the time over the time and this will last maybe forever, So what what I want to say now is that surely having such big family business give you the idea that you're provided in it is a symptom of the fact that family business performed pretty well.
And in fact, research tend to say that family businesses on average perform better than there are no family counterparts and they also tend to survive longer there.
And then a non family firms.
Angela Alam
08:14:15 AM
Still.. it doesnt sound
But today, I'm not here to talk about the average performance or the average quality of family firms. But I'm here to talk about something that, according to my point of view is like more interesting, which is their variety. So the variance of family firms and this variance comes from different dimensions, so if you think if you go back to the tool system model and we think about the two components. The family and the business. We can have it originate it.
Coming from the 2 different domains so we can of course, it originate. It comes from the business. We can have large and small family firms. We can have different business model. We can have for profit non-profit or hybrid family firms more diversified or focus and then we also have contextual differences, so according to the environment in which this kind of these firms play that can be more innovative or more traditional or they cannot more traditional businesses regarding.
Angela Alam
08:15:15 AM
Im using my phone
Family uh the family system so it originate EA originates from this family system as well. So we can have enmeshed family that really do parent focus on the harmonian communication among family members and disengage families were basically family members live separate life and interaction is pretty limited. We can have a rigid families, which who have pretty rigid rules.
Flexible norms and values and more flexible families were these values and rules are more fluid and also contextual differences, which are related to culture, so cultural norms and logics institutional logics in the end influence al family works in this society as well.
Angela Alam
08:15:47 AM
I tried many times it still wont
And uh another dimensional bit originality is the intersection between that or circles. So basically family business can either prioritize family center goals or they can prioritize business related and financial goals, so as you can see here there are many dimensions of it originating.
Rafhanah Qasrina Ramli
08:16:03 AM
@Angela - are you listening with your earphones or through your speaker?
And watch, UM my quarters and I are to rising in a recent paper published in the Academy of management germ in the Academy of Management Review, which is the Top management Journal a worldwide is that maybe instead of comparing family Anna family firms.
Angela Alam
08:16:28 AM
Through a speaker now
Poopy will be more fruitful to **** with the on the variety and it originality of family firms to really understand our small businesses can evolve and become very strong and successful intrapreneurial family is.
Angela Alam
08:17:07 AM
And through headphones but neither of them works
And the premise in uh in this paper is that maybe we should shift the focus from studying small family firms or like from the stereotype of family firms that we have in mind related to the small and they micro businesses and talk more generally about business. Sewing family is so business so in 5 minutes are nothing else or nothing more than coalitions of Keene based decision makers so basically and family members who controlled the strategy.
And the future of at least 1 firm so in their in their portfolio that can have different assets and multiple firms. So the important thing is, is that we have a coalition of family members that can influence the strategic direction of these businesses and the 3rd the 3rd like assumptions that we make is that this business, so in families can be some out conceptualizers system of social relationships within the set with the Family Circle.
But also a behind the beyond the family circles, so among the family members, but also between the family members and external lectures and if we conceptualize business owning families in this weight and socialization so how embedded they are within the Summit Family Circle and outside so in the environment surrounding them can become and represent an important dimension of business only families.
So based on that we are proposing the following framework to characterize it originate E among business, or in family, which we called the business doing family landscape and especially we characterize business own families along 2 different dimension.
And then on the one hand, we have capitalist class socialization and we define capitalist class socialization as we said before a family family. Businesses are an important reality in the modern modern capitalism in the modern economy. And so related to this we conceptualize capitalist class socialization as our or the extent to which business or in families are embedded in the capitalist class and being embedded in the capitalist class.
Somehow, having internalize adding absorbed class specific knowledge class specific norms class specific values class specific logic. And so forth and I'll explain what this means in practice to you in a bit.
And regarding the other dimensions, so they already on the result axis you can say next generation socialization. So if only one and is very important to have family members socialize with external actors and with their capital, class appears on the other end is very important that family members socialize with each other and the next generation socialization is nothing more than the involvement or the extent.
The extent to which the next generation family members are involved, and have the power to influence the strategic direction of the business so in family and the assets that the business owing family owns.
Fazila Hashim
08:20:23 AM
@Angela - try changing the settings on your browser to allow audio and video - or try using another browser on your phone. We have tested on our phones and it works
OK related to this, I want to go through all the four boxes in the graph starting from the UM from like a small family firms so small family firms are characterized by low levels of next generation socialization, so generally. These are the Eddie founding stage and low capital is class authorization so they're not really embedded in the capitalist class and these are basically the traditional and Micron and small family firms that you have in mind. These are more sharp.
Small shops uh small like a bakery store so or small organizations that are on the generally by families and the first generation of this family.
Keith Tay
08:20:57 AM
Hi, by any chance we have access to the power point and/or presentation after the session?
So moving up along the capitalist class civilization dimension, we have rent your family's.
So rent your family is are ugly socialize within the capitalist class and this has been achieved somehow because they have reached it. The average scales so there. Venters average scales. They have they have accumulated a pretty significant amount of wealth. But at the same time they have low next generation socialization because they don't have a willing or able successor to take over.
The business and so these are generally causes a shift from managing families to financial family is so in this case. The family members become passive owners of the of the family assets. So who derive income from their capital, investment, rather than from running the business, or from salaries that come from the business and.
Nyayu Lathifah Tirdasari
08:22:13 AM
The connection is unstable in my loc. Can i have the power point?
Another thing is that here there is a shift in the focus from uh like the intrapreneurial action to the wealth preservation. So these are really wealth preservation focus families and there are 2 examples here, so the Royal family itself and what is recently happened with the area and my gamma. So did basically detachment from their detachment from the Royal family and what they will do with the suspects.
Fazila Hashim
08:22:42 AM
@Chiet Chun & Nyayu Lathifah - yes we aim to make these available, we will reach out to you once these are ready
Royal family brand so somehow they will receive some rants from the use of the Royal family, Saxon Royal family brand with.
Not being actively or involved in the Royal family businesses.
And another example is the Fleming family from Liechtensteiner, so they Fleming family used to own a pretty successful bank and large bank in Liechtenstein are but then they decided to solve to South or the business in 2000 because there was no willing successor to take over and what they did. They open the family officer to manage their wealth from like in the?
Basically, the sale of the original original bank and also the wealth of other from wealthy family is the Indiana Tech 7 of Liechtenstein.
Uh OK, Donna moving an along the next generation socialization axis. We have the long lived family firms. So these lonely family firms and generally have a low degree of socialization in the capital in the capitalist class, so generally in this case socialization. Of course, or is limited to localising geographical regional or to religious or ethnic clicks.
And uh at this family's are really focused on retaining the control into future generations, so into passing the business to the next generations. And the these businesses can be pretty successful and survive attacks to a continuous, incremental innovation that is generally driven imbedded in the family culture and driven by next generation members and we have some examples years from Italy. We have the variety family.
Uh established director was established in a 1526 uh and they basically manufactured guns. in Italy and you see that they have capped the traditional gun manufacturing processes, but continuously innovating. These processes to increase the technological sophistication of the guns that they produce. We have the ocean family in Japan or owns the oldest tree Arcana in the world.
Uh it's a like a dated so it was established in a 718 so and finally Erie. Malaysian we have the young family. The young family. We know they have like founded Royal Selangor in 1885 and they have been pretty successful and goes through like up and downs.
Over basically 2 centuries and uh even if they have been pretty consistent with the futuring process tradition. They have to continuously innovative marketing strategies of their company.
Nyayu Lathifah Tirdasari
08:26:16 AM
Thank you
Finally, the last boxes, we have intrapreneurial business family is so this business family is are really future and externally oriented and this has somehow allowed them to achieve basically first forcible to undertake a bold strategic actions was in terms of the diversification new market entry, but also achieves scale and success overtime, so they have been able to sustain their intrapreneurial vitality across multiple generations.
And evolve into very complex uh organizational structures and you have some some examples here in any family.
Going extra group we uh an which basically contains firms like a Fiat Ferrari. You ventos another firms, then we have the Cuke family that I mentioned before and they support Gipa Lange family in India, who owns a supportive Pallonji Group, which is a very diversified group that also owns some shares into that at a group.
At the question here, he is the which is the focus of the presentation today. Today is our small family firms can evolve and become intrapreneurial business families, so which can they evolutionary trajectories of family firms B to make this small family firms successfully evolve into very diversified businesses.
So they they answers are.
To fold that will say so. On the one hand and 2 folder inevitable. I would say so. On the one and a capitalist class. Socialization is somehow needed to make this evolution possible so interacting with social social capital class peers allow business so in family is to absorb knowledge and norms from the external environment and to shift their orientation from within the family style quotes.
Yeah, as a circle to the external environment and so uh and uh and so become more adaptable to changes and to the dynamics of the external environment on the other end, we see that next generation of family members and the integration of next generation. Family members into the digital making is related to the business going family's assets. Hello family firms to shift from an orientation toward the past to an orientation towards the future so to become a more forward looking.
And less attached to the maintenance of the past tradition and this is very important to adapt to changes that can occur in the environment and somehow to print if Lee put in place actions that can basically allow firms to adapt to these future changes.
However, it seems like a really easy in theory, but in practice. This is not that easy and especially capitalist classes socialization can bring about some challenges first of all to socialize with your capitalist class peers. You need to have access to this elite networks and 2X to the capitalist class and research suggests and provides evidence that this is actually pretty challenging.
For a business only family and especially they we specially tend to have a limited number of network success and tend to be excluded from the elite networks.
It also requires shifts in the norms and values of the business, or in family to embrace. The capitalist class values and norms and this is problematic, especially when there is a clash between the social class values and family values and this can lead family leaders to reject a new knowledge and knowledge coming from the external environment.
Another uh another challenge is that capital is class socialization requires somehow unbinding from like the enterprise and especially emotionally unbinding from the enterprise.
And this is very challenging because we know that a family members tend to derive part of their identities from the firm so there is a strong overlap between the family identity and the firm identity and so the touching from the business can be very hard for business owning families and finally, it requires also they use and the adoption of a family constitution to regulate family members involvement in the firms or are relying on.
I'm in the office to manage assets activities or also to you stress to preserve family wealth and many families are actually not familiar with this kind of vehicles and are unaware of like wealth management and planning practices.
So these are the main challenges ready to socialization that I'm presenting some solutions or some possibilities to overcome. These challenges so related done to the next generation pier socialization. We also find challenges here, so there is now is common with them. That only 12% of family firms or see the over the 3rd generation.
And uh also striking is the fact that only 50% of family companies worldwide have a successful plan in place. So basically business, or business so in families orange prepared to pass the business, or to make this assessor, Undertaker to give a chance and opportunity to successor to undertake the business.
And why this is the case so on the one hand it can depend of course on the successor, so the successor can not be a really able to take over the business so or the successor can be pretty dissatisfied or ever lack of motivation to take it over. But maybe even in the cases in which there is enabled a capable and demotivating successor, then we have problems related to the incumbents. So incumbent tend to be really attached to the business. They have this sense of control domination and sometimes.
And this creates driver listen competitions.
Uh in parent child relationship right and uh there's also strong beliefs in the existing incumbents that suspects are somehow need to replicate what they're doing need to abide by the values by the ideas and the norms that they have been abiding by so far. And so these somehow creates a sort of domination that makes impossible to their successors or to next generation members to bring in.
Into the family other perspectives and also create some sort of a lack of trust in the potential successors and annoy acceptance in the potential success or by both family and family members involved the into the business.
So then out over candies as you can see these problems are not really technical problems are more emotional problems. What we are suggesting is that professional advisors can really help family firms overcome. These challenges and become socialize or socialize with both capitalist class peers and also enable the involvement of next generation members and in particular, they have critical skills that are typically not post as by the family members.
They can also uh can give support somehow to apply the business and capitalist class principles to the family business can play a role in coaching next generation members and also they can somehow guide change management activities and can ensure a commitment by family members to the sustainability and continuity of the business across generation.
Haafiz Bin Nordin
08:34:43 AM
Hi!
But as a business owning families are also professional advisors or radiator genius and so you cannot like get and try to attract an advisor and think that a like whatever advice whoever is going to help you to socialize your business so in families in the capitalist class or to help you with next generation involvement. So Advisors are different, and there are 2 main kinds of the advisor who can serve different purposes or.
Can help you achieve a different kind of socialization so on the one hand? We have relational advisers so relational advisors are generate trustees. This trust is a uh do have long standing relationship and they're generally deeply embedded into the business only family is so they really know well with a family members are they dynamics into the business sewing family, and basically they also the personalities.
On the other end, we have Transactional Advisors Transactional Advisor are completely unaware of the family dynamics. Sometimes they don't even know who they family members are these are generally consultants who are higher for specific Mondays and for these specialized knowledge and competence is.
And what we are suggesting is that this choice of advisor is really crucial to enable either next generation socialization or capitalist class socialization.
An while Relational advisers, so who really knows the family members are indeed deeply embedded in the business so in family are well suited to facilitate somehow next generation socialization because they can somehow incorporate the different kinds of you create agreement and conversation between the family members on the other end, Transactional Advisors, who are well situated in the external environment.
And F capitalist class knowledge can really play a role in enabling capitalist class socialization or in disseminating I will say knowledge from the external environment field level knowledge and get business owing family is familiarized with capitalist class norms.
OK uh intern just to summarize how to use watch. I just presented uh. I want to use this as a kind of road map to think about the future. If you if you own or are if you own or run a small family forms or another kind or a different kind of business, so in family or you are a part of a different kind of business only family. I want to use the insights that I've just provided 2 creative sort of road map.
So to make you reflect about the evolution path that your firm or your business is going to go through.
So first of all think about where are you now so where are you like currently in the business so in family landscape so visualize your positioning so what's your level of next generation socialization. Our next generation members already involved. I do digital making of your firm or do you plan to get them involved into it and do you think that you are really involved into capitalist class that you have really absorb knowledge?
And norm, so from like capitalist class and external environment, so try now to visualize your position.
Jodie Manale
08:38:30 AM
Yes, I have to run now but would like to receive a copy of this webinar. Thank you. Very interesting!
The next step is what what's your next priority. So where do you want to get to to go next? Maybe you are already so the next generation is already involved in into the digital making or maybe you are really fully socialized into the capitalist class and you want to involve the next generation. Or maybe they are also think about the path or what's your next priority. So do you want to socialize with the capitalist class peers next or do you want next generation members?
To get involved into the children making.
According to you to your priority. I want to stimulate reflection on the following so if you are considering about socializing or you think that you really needed to get embedded into the capitalist class and socialize with the external and playing with the with basically agents from the external environment, then I want to ask you whether you're prepared and ready, somehow to emotionally detach from your firm.
Because you'll need to do that sooner or later.
Even if you want to socialize with the capitalist class peers Are you ready to run I or are you. Have you consider relying on institutional affiliation to access these a little networks, especially education and alumni circles can allow family members to socialize with social with the capitalist class peers. I already to rely an interact with transaction advisors to access these a little networks.
To rely or or as you started aura at you found in in advisor that can help you with the managing your hot wealth and wealth planning uh or another thing at you started like absorbing and observing what hard fielder specific best practices that you could adopt A?
Regarding the second option, so if you think that what what we've come next is the socialization of the next generation. Family members then relying on Relational advisers advisers to plan the succession process can be a good idea.
Uh or at least starting relying on advisor to coach both incumbents and successors and help them solve an address potential conflicts and potential tensions that can arise from the transition from one generation to the next.
And also one thing that you should not necessarily consider is the organizing the firm structure to be able to introduce new family members.
Is variable is also very important to train the successors so education? Can really plays an important role in making this assessor willing and able to take over the business.
I'll leave you with this framework and uh hopefully with uh some inputs, uh and food for thought.
Uh and especially I'll give you with some reflections regarding the potential trajectories along with your business so in family cannibals in the future and what is needed to make especially your small family firms evolve and become a successful intrapreneurial business family.
That's all for today. I hope that you enjoyed the presentation. I think that we have time for a couple of questions. So I would really welcome.
Thanks um what an insightful presentation. Thank you for Barbara Uhm, so before we take any questions. I wanted to kind of jump on the call just to introduce those who have not had any exposure to SB to some of our programs an offerings that we have coming up so Asby is partnership between MIT. Sloan and the central Bank of Malaysia. Full name is Asia School of Business.
In collaboration with MIT Sloan so as part of our programs. We have award winning visiting MIT. Faculty, who come to campus in one week intensified modules of the same course.
Alan Cheng
08:43:13 AM
Thank you so much for this wonderful class.
Is that they teach in Cambridge? Also all of our degreed programs including our two MBAs are Masters of central banking have an MIT immersion in Cambridge. All of our programs also have very action based curricula so very focused on what we call action learning or consulting style mini projects in various countries and companies around the world and we also have a very high level of diversity within our student body we have.
At least 30 uh countries among 5 continents are represented and also you've notice. Tom rose from Italy. Uhm so even among our faculty. I think we have over 10 countries represented at this point and we also have over 40% female students, among each of our classes that are on campus currently.
So we offer 2 different types of programs. The first type is a full-time residential MBA on that is a 20 month program. It includes 5 different projects among 5 countries throughout the world and it includes 4 weeks at the MIT Sloan, Cambridge, and camp in Cambridge, MA as well as study tricks to New York and China. We also offer an MBA for working professionals or MBA WP program.
This is a 22 month program that's in a modular format. So you can do this program, while keeping your job annual come to campus for a week, every 6 weeks or so and it also includes an action learning project component with your own company, as well as a distance learning component and it also includes 4 weeks at MIT in Cambridge.
We also have um a kind of a slide here with our action learning project. Co hosts so we work with over 100 corporate partners among 22 countries and counting. So um here, you can kind of see a sampling of that an up-to-date list will also be on our website and this includes everything from Fortune 500 project hosts to governments to startups.
So if you're interested in applying to any of our degree programs, either are full time or are working professionals MBA program. You can find the dates and deadlines here and I think there are actually a couple of Admette and applicants who are on the call so wanted to give a shout out to those as well. The last deadline is April 2nd for the full time program and the second deadline for the working professionals program.
We also have a couple of executive education offerings coming up so this year. We were very proud to announce that we have merged with the E Cliff Center for executive education along term executive education provider here in Malaysia and we're offering 2 leadership course is the first one open source leadership in March and the second on brain based leadership in April. So these are kind of a few day long courses so.
If you think that you might not be ready to do a full time MBA or the MBA WP. These are definitely great options to sign up for as well. So if you want kind of more courses like this definitely visit. Our website reach out to the admissions team at the email address listed here or download one of our program brochures at the link here.
Brian Sun
08:46:36 AM
Interesting seminar. Thank you for presenting!
So given this, I think it's time to go to a few questions. So I don't know if we have any questions of from the chats. Yet there were a few of you that actually submitted questions to us via the form. When you signed up so I have a couple of them that I'm going to kind of address with hombre here so.
The 1st question kind of comes to us, um an actually this has been a few people who have had questions along these lines so you. You mentioned that half of family. Businesses are not really involved in any succession planning so the other half that are you know say that you've identified that succession planning is really important kind of how do you go about that strategy and have you seen any sort of patterns in how the most successful businesses?
Approach succession planning.
OK, so first of all I also have to clarify that succession planning really depend on the level of the management so you can have succession planning for senior management. So I did very, very high level or successful planning for middle managers, or succession planning planning from CEO. The problem in family firms is that success on just doesn't involve only management, but it does involve also ownership so it's a pretty sensitive thing so it has 3 aspects.
Management ownership and all the emotional aspects that are related to that and they think is that as I as I explained earlier. They involvement of external actors can really help family firms deal with this because even when they have like a succession plan in place. Then there are reluctancy. From there is our reluctance from the accountant to really leave the business with this assessors and so, adding some sort of mediators that.
Tommy Sitorus
08:48:49 AM
Very interesting webinar, thank you
Really no well they sort of mediator, the training as well. Family members and can somehow ensure communication and the process to be smoove is a very lazy fundamental. Paso daryav server like a pretty successful succession processes where there are like a practitioners and advisors from the external environment, we who have like a long, long expertise in the infield absolutely.
Don't make sense uhm so I had another question uh come through in the initial form a kind of talking about the strength of intrafamily relationships. So you talk kind of about the strength of the family relationships with the rest of the capitalist class, but have you seen any sort of patterns in terms of how strong bow ties are within the family to how successful the businesses.
So uh actually in the literature says that there is a strong social time tires represent even a form of capital. So basically there is a really strong resources in some family that can allow families could be unique and over, complete non family firms. But on the other end is also true that somehow they can really obstacle firms and hamper adaptation and this happens, because, like a strong focus on the family.
Fazila Hashim
08:50:28 AM
We welcome questions - if you didn't submit questions when you initially registered, you may ask your question here in the chat. We'll try our best to answer your questions if we have time.
On the ties and on the family Armone somehow distracts. The family from what is happening in the external environment and this is somehow? Can yes as I said Hunter or adaptation? Of course because they cannot really see what the dynamics around them. If they are too focused inside the family and prioritize family center goals instead of financial and business goals, OK, so a good balance is general. It is there a recommended and this is the way we?
Car Menn Lee
08:50:47 AM
Can we have a copy of the presentation?
Why having a very strong and enmeshed family is very important but at the same time is very important this enmeshed family to be socialized into the external environment in the capitalist class, although talks or external perspectives absolutely OK, so this next question actually was sent to me in the context of someone one of our registrants from the Philippines is kind of working as the younger generation in a family business.
Fazila Hashim
08:51:38 AM
@Car Menn - we are working on making copies available afterwards, we will reach out to you once it is available.
Family farm but I think this question maybe could apply to a wide range of businesses I'm not sure if you'll have an insert ruise but her frustration was that you know she was kind of coming in with new ideas with a more modern business education but was receiving resistance from some of her older family members like you were talking about so the incumbents kind of having that resistance is there any advice but you might give 2.
People in the younger generation OK, so now. I want to talk about related to this question to a study that has been recently published in the administrative science quarterly which is a major management Journal and actually the reality regarding succession and Watt enables basically the successor to take over is pretty simple. But at the same time is pretty depressing so the authors basically found that being a 2 competent and being too ambitious.
Can somehow being negative thing so because the incumbent it becomes uh? Basically really competitive against the successor and uh and really interest basically to dominate the staff extra in a way that doesn't enable the success or 2 to take over so in this case is that for this. I'm talking to the success or now. Even when they are really capable. They have fresh ideas like trying to mediate.
And be consistent with the family tradition.
Azleen Waris
08:53:00 AM
please share presentation
And and can be a starting point, so innovate by using the tradition. Maybe can be a starting point to take over and like maybe maybe making them self or less, trapping in the eyes of the current incumbent OK.
Very good advice for those who bear who minus admitted that question uhm so this one actually was a very interesting. One uhm because you know a lot of these firms kind of have this dual like you said business and social ties? How do you manage conflict of interest within a family business or whatever you kind of see in a long conflict of interest lines so basically you see that the conflicts of interest.
Uh is Watt or basically the priority prioritization will say of either Family Center. So business center goals is what makes families pretty unique and uh of course, is the is a I will say level of complexity that is or a complexity that is like.
Much better how many meters exactly are much more complex than normal businesses because of like the dual goals and wide array or variety of School of goals that they need to manage sometimes, this goes gold can clash. Some other times. This goal can be aligned an where family firms cancel my alarm cancel our line financial and family center goals. This is the way in which they can flourish alignment between the 2 is a very important thing and try to find these kind of alignment is a long process.
The process of like learning how to manage complex a overtime and out manage priorities. But it is basically the key success factor for family firms.
Um and so our final question, um uh that is coming from kind of a pre registrant is how do you compensate family members involved in not involved with the business fairly?
Richard Ii Liao
08:55:01 AM
hello what are your objectives in having a successful family business
Yeah, So what I guess what have you seen along those lines of course. If there is a lot of literature that says, and stays and demonstrates that sometimes compensation towards family members is not as far as as it should be. But when there are Gerard is kind of struggles under or problems or problems than each effects like motivational non family employees and non family managers right because they say that they are compensated unequally and so they?
Musicali lose motivation.
Car Menn Lee
08:55:50 AM
@fazila, thanks for that!
What are the business any longer so basically uh first of all doing that so compensating them fairly and Secondly is also signaling that this is happening because sometimes you know like a non family members to take for granted that these unequal compensation or it is favoritism enabled ISM towards family members is in place, whereas communicating it and making explicit that this is not the case is very important also to ensure like a motivation.
And F word by both family and family members.
Awesome I'm so do we have any additional questions.
Who made a few seconds from the foreign?
Car Menn Lee
08:56:16 AM
yes
Alright so we do have one actually uhm.
How do you kind of prioritize your objectives in um having the successful family business?
So successful what do you first of all is very important to define what you mean by successful because success can be really related to the family and to pass over the business to next generation. So you can really be focused on the family and so you can just have some love for the family and make the business survive longer, so survival is a dimension of success.
Car Menn Lee
08:57:13 AM
will it be better to split the group of family business among the siblings after inheritance or keep it together and allow 1 sibling to lead the pack or equal share?
Nyayu Lathifah Tirdasari
08:57:29 AM
I've a question for ASB, does ASB provide phd programme?
Uh on the other end if you really want to focus on a performance so the business performance. The financial objectives of the firm then as I stated it's very important that you really try to observe and adapt to the external environment, so looking outside the family circles and trying to both adapt best practices, but still maintaining family equation and identity. I will say that should be a key priority in every family business.
So I have a another question actually that just came in um along the lines of would it be better to split maybe a grouper conglomerate of family businesses among siblings after inheritance or kind of keep it together and allow one sibling to leave the pack. What would be your advice on that.
Car Menn Lee
08:57:59 AM
no
Car Menn Lee
08:58:02 AM
in business
Car Menn Lee
08:58:04 AM
subs
Uh it really depends so it really depends so are you talking about wealth management only or is there like a business or some different subsidiaries involved so wealth management and wealth planning is a pretty challenging and tricky business. So it's really important to carefully consider out of business structures, so first of all the business also when you create this wealth management plans.
Sometimes, like creating trash so or using other kind of vehicles can sequestre somehow capital from the user. Uh in future generation to start new businesses. So it's also is very important to preserve wealth, but at the same time to preserve wealth in a way that will allow our next generation to use that capital, maybe to start a business or starting new businesses. So it really depends on what are the family objectives here and I'll do this in this case?
Siblings are involved into the business so in family business and asset management and I suppose. It also kind of depends on what this sub businesses in the business lines are as well.
Keith Tay
08:59:26 AM
Thank you so much for arranging and taking the time to answer questions!
OK, um, so I think that is, it in terms of the questions that have come in and we've also reached our time limit so thank you for everyone who submitted questions. Everyone who attended if you had a question that did not get answered. Feel free to reach out to us visit our website. If you need more information and we will be sharing. Both the recording of this presentation as well as the slides with you afterwards so.
Rachelle Salanga
08:59:50 AM
Thank you for the interesting webinar!
Thanks a crop umbrella thank you. Everyone uhm and we hope to see you at the next virtual lemon are thank you for having me here and if you have any questions, so you will have my email address on the presentation so please. Feel free to reach out to me.
Adrian Galido
08:59:54 AM
Thanks Prof!
Richard Ii Liao
08:59:57 AM
Thank you
Quossette Loquenario
09:00:20 AM
thank you!
Fazila Hashim
09:00:21 AM
Thank you for attending our webinar, and we hope to see you at the next one.
Fazila Hashim
09:00:39 AM
@Nyayu - not at the present moment, but we may soon :-)
Fazila Hashim
09:01:03 AM
If you have any questions please reach out to us at admissions@asb.edu.my