THE ENTREPRENEURAL CLANS IN ASIA: The Addition, Multiplication,
Subtraction and Division of Family Conglomerates - Alvin Bilolo
Situation Analysis
The three entrepreneurial clans in
Asia gives us a lot of ideas and insights with what was happening in a usual
family conglomerates. There are indeed additions, multiplications,
subtractions, and divisions that are happening within those corporations. These
corporations should then be united in order to maintain the ownership of the
businesses that was established by their forefathers.
The Raiva siblings and their
spouses of Thailand, Tunku Abdullah and his royal brood of Malaysia, and the
three generation lineage of Indonesia’s Ibu Mutiara Djokosoetono ‘s stories
gives us an insight that indeed businesses were passed on to their next
generations in order to maintain ownership and control of the company. This is
also done since the name of the founder usually serves as a trademark of their
businesses in the long run. This is true for an instance since the successes of
their forefathers are usually associated with the success of the successors in
particular fields.
Problem Analysis
The usual problem for a family
conglomerate that is common with the three entrepreneurial clans in Asia is the
challenge of keeping the business alive and within the control of the members
of the family (their supposed to be successors). For once, businesses such as
the one tackled in this case were established to last for the benefit of next
generations. There is indeed a problem of transferring the management of the
business to their successors and keeping it alive and productive.
Another thing that is worth noting
here is the challenge of improving the current set up of the business, its
operations, managements, and products by its successors. Those successors
usually have a greater responsibility to meet the expectations of the public –
expectations that was set by the founders of their conglomerates.
Alternative Generation
The three families have different
strategies in transferring the businesses to their next generation. The Raivas
added more enterprise to their conglomerate by exploring different related
industries such as restaurant and bakery business. They have their focus in
business and they prosper what they know to improve the operations. They have
multiplied their business in a more concentrated manner and focus on their core
restaurant and bakery operations. They have eliminated those cost that will
tend to pull business operations and put more emphasis on effectiveness and
efficiency. They disseminate their businesses according to functions and
product lines. In this way, members of the family can freely choose as to what
department they are willing to handle. With this, they will have what they want
and will be able to focus on their line of interest.
The Melaware group on the other
hand adds enterprise using a shotgun approach. They are getting every opportunity
that came their way wherever they may be coming. Tunku Iskandar and Tunku
Yaacob expanded their respective empires through acquisitions and natural
growth. This opportunistic and aggressive approach bound them to some failed
projects. Nevertheless, this family conglomerate had the strategy of keeping
the ownership of their companies within by holding 80 percent of industry
groupings that they have. They were able to obtain additional capital by
selling 20 percent of their company to others, which will then benefit them as
a whole since new ideas may come up. In times of need, they may then
immediately buy the 20 percent minority stocks from others.
The conglomerate of Ibu Mutiara
which is ‘Blue Bird’ then straddles on the two extremes. This family really has
no focus on what business they want to stand on. Their businesses just lay on
common denominator which is wheels and whatever is attached to it. Growth is
then limited and not diverse. Because of the focus that they have, they prosper
and multiply a lot. Unlike the two families earlier, Ibu Mutiara ensures that
every member of the family will have a piece of the pie. Everyone will benefit
from the business. Though her three children are all professionals and need not
manage the business, she still pursues and even trains her grand children to
manage the business. She strives hard to transfer the ownership to her next
generations.
Decision Analysis
The entrepreneurial clans in Asia
are all successful in their own rights. However, to continually improve their
operations and businesses, as well as to transfer it to their next generations,
they should focus on their market and strength. They should not go beyond their
competency and should continue to transfer their vision and mission to next
generations. All members of the family should keep their focus and think of
ways to improve and prosper the business ideas that they have. With this,
family conglomerates will then be sustained for long period of time.
Action Analysis
At the end of every alternatives and
decisions enumerated above, family conglomerates will always be influenced
directly and indirectly by the charisma of patriarch and matriarch. This is the
first factor that may cause success or failure of the existence and transfer of
conglomerates. This will also be influenced by the education and professional
independence of the second generation, as well as proper briefing and transfer
of knowledge that they have to the next generations. It is very vital then that
all knowledge and techniques be transferred and honed. This will keep the business
going and will keep the ownership to the family for a long period of time. Everyone
should take personal accountability and should not take for granted the effort
and strategies set by our forefathers.
