A business can be defined as an activity of engaging in trade for the sole purpose of making profits through sale of goods and services to customers. A business can also be defined as an enterprise that is involved to selling goods and services at a price with the core purpose of satisfying their customers and in the same way earn profit an increase wealth for the owners. There are different categories of businesses; for example we have a sole proprietor which is owned and controlled by one person. Then there is the partnership kind of business which is an association of two or more people who come up to start a business together with raising capital and running the business together with the sole purpose of making profits. Finally we have a company or a corporation where more than ten people may wish to start a business and register the business to make profits. There is no maximum number of owners for a company and the company acts under legal guidance with the constitution of the country where it is registered (Poza, 56).
A family business is a type of business enterprise which is owned and controlled by one or more members of the same family. The entrepreneurs are usually related by blood or marriage and thus the interest of the business is to make profits (Halkias, 12). The business is run and controlled by the whole family but may also be run by the person with the largest share holding in the country. The profits for the business are usually shared according to the number of shares each controlling interest or person has in the company. It’s known that the largest and most successive businesses are family owned and controlled, for example, Walmart in the United States and Samsung in Korea (Alderson, 23).
Family business in the Middle East
Family business in the Middle East are run and controlled by two or more members of the same or related families. The family forms the management team for the business and controls the operation of the business. Most of these family businesses were started long time ago and have been passed from generation to generation where control is under the family name (Barrett and Ken, 46). The success of most family owned businesses can be attributed to the fact that family members are loyal and very dedicated to the business where each stakeholder is concerned with the welfare of the business (Gasparski et al. 89). It’s known that almost 80% of the businesses in the Middle East are family owned who are thought to have started as entrepreneurs in the mid 1960 and have continued to expand over the years to modern large businesses that are taking the world by storm. For example Alghanim Industries is among the most successive businesses in the Middle East where it operates in more than 40 countries. The company is involved in diverse businesses mostly in the manufacturing, engineering, retailing and the insurance sector (Stewart et al, 65). Most family businesses are controlled by family members who have always had the upper hand in exercising control and management. A group of experts in management are appointed in family meeting to undertake the running of the business. Family business must understand the changing economic environment so as to adapt and continue making profits so as to remain in operations and grow just like any other business (Iqbal, 123).
Most family business although being so successive do not survive the third generation and this also applies to most firms in the Middle East where conflicts rise due to control of the business and may lead to collapse of the business (Gupta, 29). For the business to be successive and survive the third generation the parties involved in the complex fight for control for the business must be met through discussion and a balancing act reached at by all parties (Carlock and John,38) . Each family is unique in its own way and the identity of the family keeps being changed as the generations goes by where the younger generations wish to have control of the business without experience on how to run the business. The governance structure of the business keeps changing when business inheritance takes place where each leader comes up with a new strategy of how to run the business (Jamali and Yusuf, 59).
For a business to reap the ultimate price of making profit and being successive in its operation the entrepreneur must draw up a good business plan that will see the business grow and expand to greater levels in business. Its operations must be efficient so as to make profit that will cater for its expenses and expansion expenses. In the Middle East most successive businesses are family owned and controlled and this explains the booming of businesses in the area due to clear and strategic management in all areas of operation. The business owners are aware of some of the threats this businesses are likely to face in the near future and thus make clear plans of how to deal with them. Some of the challenges that family businesses face are discussed in family meeting where clear understanding and agreement are met by all the parties involved (Shams and David, 256).