Challenges Facing Family Companies in the Gulf Region

Abstract

Introduction In the 21st century, family businesses in all areas of the world face significant challenges and plentiful opportunities. The growth and survival of family firms depends on their ability to address these challenges, capitalize on their strengths, and take advantage of the opportunities facing them. Nowhere is this dictum truer than in the Gulf Region, where family companies are likely to experience dramatic changes to their environment in the next decade. The family with its extended kinship network is probably the central element of the Gulf Region socioeconomic system. The family household unit in the Gulf, the extended family, and the family’s close allies are the chief nurturers and arbiters of individuals’ values, attitudes, and beliefs. A person’s primary social and economic support comes from his or her nuclear and extended families. Social and business life revolves around the family. There is a strong cultural preference that business opportunities should be pursued, if possible, first within the family, and then with other ally families. More than in any other area of the world, in the Gulf, business is viewed as a way to enhance a family’s social standing rather than as an impersonal, wealth-generating, market-driven activity. Of course, many factors interrelate with the family element to create the distinctive features of the Gulf socioeconomic system. The patriarchal system of government; comfort with traditional, seniority-based leadership; social and economic protectionism; the importance of the oil industry; welfare-state economics; fast-paced ecoI N V I T E D C O M M E N T A R Y