Family businesses are everywhere, contributing as much as 90% of the world's economy, according to some estimates. But just like families everywhere, these businesses fight—and there isn't always a peacekeeping matriarch or sibling to make things right.
Roselyn Lekdee, economist at Wealth Insight, a wealth management researcher provider, said asking for outside help was more popular in Western companies than those in emerging markets like India or China.
"Wealth managers facilitate the growth of family firms in developed economies, and are increasingly playing a significant role in family businesses. However, demand for these services is limited in emerging countries: families in emerging countries prefer to limit the entry of outsiders, even as advisors, in their businesses," Lekdee said in a 2014 report titled "Insight Report: Running a Family Business."
Some companies in emerging economies have become more Western in their outlook — particularly in the most-developed emerging markets. For example, after more than 40 years at the helm of United Overseas Bank in Singapore, Wee Cho Yaw appointed a non-family chairman to replace him, instead of his son Wee Ee Cheong.
"The emerging countries offer small opportunity for succession-planning services, but demand is expected to grow over the forecast period from 2014 to 2018," WealthInsight reported.
Other challenges facing family firms include stringent taxation, particularly in Germany, the U.S. and the U.K., according to WealthInsight.
"A strict tax environment poses one of the biggest challenges for the family firms," Lekdee said.
