It has been estimated that over 90% of commercial activity in the Middle East is controlled by family businesses and there is some truth that the family conglomerates wield a great deal of power and influence in economic and political life in the Arab world.
More likely than not, the region’s energy riches have bolstered growth in these largely private, family-owned businesses. At the same time, some have benefited from their countries' restricted competition practices, privileged access to senior local officials through family connections and access to funding based on their family name. However, in the Middle East, just as elsewhere, family firms are more likely to take a longer term approach to running their businesses than non-family, quarterly results-focused firms, showing a readiness to invest capital with patience that can become a competitive advantage.
To achieve successful results when working with family conglomerates one must acknowledge that the organization is both deeply rooted into tradition as well as in culture and personal values. As the region moves further into the 21st century the results of succession planning yield (more often than not) the hiring of expatriate professionals into senior management that can both external expertise as well as subduing internal family politics whilst the family retains overall control and direction. This can both prove to be effective and provides subsequent opportunities for the Search industry.
Moving forward, the (Search) industry can look forward to further opportunities from the family conglomerates as the Middle East tries to diversify away from its dependency on oil and we see further investments in sectors such as tourism, retail, education, healthcare, construction, Real Estate and engineering.
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Exploring the dynamic intersection of family offices and private equity in Asia, William J. Farrell delves into the ever-expanding landscape of family-owned businesses while connecting how and when talent and leadership strategies may assist in support of their growing legacy.