According to an article from female.com, the family business has become a supporter of the economies of countries in Asia, including Indonesia. Family businesses do have good benefits in providing jobs for local people.
If the mirror in Indonesia, many companies are successful because of the central role of the family of its founders. Examples are Nyonya Meneer, Sidomuncul, Sari Ayu, Mustika Ratu, and others. These long-standing family corporations are proving resilient because they can maintain and grow their companies.
Well, for those of you who already have a business and thought to make it into a family business, please refer to the following facts about family business in Indonesia that can be used as a reference!
The Jakarta Consulting Group has conducted a survey of 87 middle-to-upper family companies spread across several cities in Indonesia. About a third of the respondents have a national market and another fifth have already penetrated the international market.
• Dynasty of Family
The majority of respondents stated that the family company was originally founded by a single fighter. The rest take partners who are still included in the close-circle family or immediate family earlier, ranging from husband/wife, relatives, to close friends associated with the aspects of trust (trust) and the similarity of vision.
• Family Expected to Become the Successor of Business
The majority of founders say they want their children to enter the company. The reason, because with such a high unemployment rate employment opportunities outside the family company should be recognized is still quite difficult. In addition, the typical family bonds of the eastern nations are relatively stronger in appeal in western countries.
• The Generation of Founders vs. Generation Success
The new generation tends to have different views because generally, the level of education is even higher. This is what if not communicated properly can trigger a serious conflict and hinder the process of succession.
• Inward looking vs outward looking
There are two interrelated views of the family business. The values emphasized in the family are generally inward looking, based on emotion, sharing, lifelong membership, and reluctance to change. While the values required in the business are outward looking or outward looking, task-based, not emotional, rewards based on merit, membership based on performance, and referring to change. In this alignment, the main key lies in the effort of coupling company values and family values.
• Family vs Business Interests
To avoid this conflict, family members need to define the role of deciding who does what, and if those roles change, it will have an impact on business and family. For example, the first child holds the manufacturing, the second child holds the logistics, the third child holds the distribution, the fourth child holds the marketing, and so on so that eventually the company becomes big with the value chain into one.
• Roles, Compensation, and Justice
The role is closely related to the compensation that must accommodate the principle of fairness. The principle of justice should also be applied in the distribution of income among family members. The key to all this is communication and openly revealing issues with all the main families as well as key people outside of family members. In addition, a management structure is required, especially in relation to the placement of family members in the organizational structure and the competencies it needs.
Speaking of leadership in the context of a family enterprise certainly does not escape the succession. Succession is the most crucial issue, especially if the company's control has started to move toward the second generation, let alone the third generation. Issues in succession include an unclear succession plan and conflict between replacement candidates. The key word is when will the company be inherited and to whom. Implicitly, communication is absolutely necessary here.
In addition to the family, companies also need to consider qualified professional employees in their fields to promote accountability in management, make decisions based on pure business valuation, and expand the network. With an increasing number of professionals in family firms, the family can concentrate energy on surveillance that ensures business sustainability. This is considering how many family companies fall in the new stage of survival. Good luck and success in your efforts!
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