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Women in Family
BusinessesChamber of Commerce-
Eastern Province- Saudi Arabia- October 19-20, 2011
Dr. Josiane Fahed-SreihAssociate Professor of Management
Director, Institute of Family and Entrepreneurial Business
Lebanese American UniversityMiddle East Coordinator for the Family Firm
Institute, USAFellow Status- Family Firm Institute- USA
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Outline
Women in Business in general- The Diversity Issue
Women on Boards of Directors Women as owners in their Family
Businesses Challenges of Family Businesses- Inheritance
Issues/- Gender Issues Values Ownership/Management/Family Recommendations
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Women in Business in General
Women are a minority in the workplace. In the US, Europe and the ME.
More and more women are entering the workplace
Statistically, the number is increasing year after year, However, the number of women in Leadership position, although increasing is still very limited.
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Statistically the % of Females in the Workplace (Men 54%vs. Women46%)
42%
44%
46%
48%
50%
52%
54%
%M/W
Men 54%Wom 46%
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Women Median Earnings
(Men 30132 vs. Women18996)
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
Men30132Wom18996
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Study at LAU
In a study I conducted at LAU, the average earnings of Males is higher than that of Females, however, as Females get higher educational levels, this difference gets smaller. Which basically shows that the more females get competitive, the lower the earning gap.
This study was published in the International Journal of Business and Emerging markets- Inderscience
publishers.
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Women on Boards of Directors
Women are under represented on Boards of Directors, they currently hold only 12% of Standard & Poor’s board seats.
Women either control or influence nearly all consumer purchases, so it is important to have their perspective represented on boards
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Research suggests…
Women executives outperform their male colleagues on skills such as:
being able to motivate others, promoting good communication, turning out high quality work, and being a good listener
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Research (Cont.)
The Hagberg Group performed in depth evaluations of 425 top executives in a variety of industries and each executive was rated by approximately 25 people.
Of the 52 skills assessed, women received higher ratings than men on 42 skills, though at times the differences were small.
All in all, studies such as these make one wonder why the glass ceiling continues to hamper the progress of women in business.
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Women as Entrepreneurs
Studies have shown that women entrepreneurs are more reliable than their male counterparts, and the UN has decided to allocate more funds to them.
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Challenges Facing Family Businesses
As related to Women
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Family Businesses
Family Businesses are considered pillars of economic growth and of all businesses.
In the US. 80% to 90% of the businesses are family businesses
In the Middle East, this percentage gets to 98% of businesses in general
Family Businesses in general employ 78% of all new job opportunities, and 65% of all paid salaries and 60% of all job opportunities, and 50% of GDP.
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Women in Family Businesses
More and more women play roles in family businesses
A recent study showed that more than 25% of family businesses are waiting for a women in the top management positions.
The same study conducted after 7 years showed that this percentage has gone up to 34%
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Women in Family Businesses (Cont.)
The number of women in family businesses has doubled
Family businesses headed by women are twice as productive as those headed by men.
Those studies have also shown that women have different leadership and management styles, which shows the success of family businesses lead and owned by women.
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Inheritance Issues
According to “Shari’a” the male gets two times the share of the female.
In Oriental cultures, the females are alienated from the family firm
In many families, the female gets only minor assets especially in very wealthy families and they influence females to sign off on their inheritance rights
In poor families , the male is the money provider and hence should inherit
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Gender Issues in Family Businesses
The problem of the In-lawsThey are alienated from the family firm, they get other assetsThey are in managerial positions only in the absence of males in the family or depending on their birth order.They are always encouraged to chose social work
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How can Families Work Together more Effectively ?
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StressesPredictable Unpredictable Patterns from previous generations
Governance Structures
Family Family Family Shareholder Board of Management Meetings Councils Retreats Meetings Directors Team
Empathy Trust Belongingness Shared Values Openness Respect Conflict Management
Skills Problem Solving Skills
Communication Factors
Family Cohesiveness
Successor Development
Estate Planning Operational Policies Improved Survival
Probability of Business
Results
FB
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Family Business System
Ownership
Family Business
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Family Business System
Roles & Expectations
Rules Goals Issues Governance
Structures
Ownership
Family Business
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Values
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Values
Definition and Purpose Basic Concepts and Beliefs Guide Decisions and Behavior Determine Right from Wrong Determine What Should be Done Determine How it Should be Done Determine Why Things are Done
We take for granted that we share the same values, but do we?
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To Transmit Values We Should
Name It: Make Explicit
Define It: Through Behavior
Tell It: Through Stories
Live It: By Daily Example
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Reciprocal Power of Values inFamily and in Business
Family Realm Business Realm
A Durable Value System that Benefits Both Realms
Improved Family Behavior
Family Pride
Founder(s) Beliefs
Sincerity and Genuineness in
Manifesting Values
Important and Practical Values
Exercised in the Business
Strength to Business
Source: Family Business Values: How to Assure a Legacy of Continuity and Success,
vol. 12 in the Family Business Leadership Series.
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Some Values Often Found inSuccessful Family Businesses
1. Accountability2. Adding value3. Collective good4. Valuing input and interaction (give and take5. Education and development6. Ethical conduct7. Focus on values and values education8. Fun9. Justice10. Meritocracy
11. Openness12. Practical Realism13. Risk-taking14. Self-reliance15. Servant leadership16. Social purpose17. Entrepreneurial spirit18. Stewardship19. Trust20. Valuing stakeholders
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Answers found by Long-lasting Family Firms to typical Challenges
Family: Keeping Family Cohesion
Ownership:Maintaining Committed
Shareholders
Business: Selecting Family
Managersand Board
Members
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Answers found by Long-lasting Family Firms to typical Challenges
Family: Keeping Family Cohesion
Ownership:Maintaining Committed
Shareholders
Business: Selecting Family
Managersand Board Members
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Selecting Family Managers and Board Members
A difficult issue, which if not properly addressed will lead to conflicts
Within the family
› Why her and not me?› Why their branch and not ours?…
Within the business - Risk of demotivation of non-family managers
- Risk of lower business performance
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Answers found by Families
No family in management, only on board (Haniel from Germany has been here for 100 years)
Only one family member: the CEO A few selected family managers, not
necessarily in the top jobs All family members can work in the
business in appropriate jobs (even in small jobs).
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Practices used for the Selection of Family Managers and Board Members
Family elders search for them and ask them to join
A committee advises family members on their careers and evaluates those who wish to join the business (for example: an HR specialist, a family member, a non-family manager)
Internships are encouraged
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Selection of Family Members: Examples of Pre-requisites
Graduate Studies
Outside Experience
Outside promotion for certain jobs
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Practices used for Careers of Family Members
Same criteria as non-family members. Have a Good Mentor (boss). Evaluation by non-family members on
the board. Career committee And of course a retirement age.
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Answers found by Long-Lasting Family Firms to Typical Challenges
Family: Keeping Family Cohesion
Ownership:Maintaining Committed
Shareholders
Business: Selecting Family
Managersand Board Members
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How to Maintain Committed Shareholders
Unhappy shareholders can sell their shares to a third party, ultimately leading to the sale of the family business
Keeping shareholders happy is an important task for any business leader, and of course for family business leaders
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Practices Used to Maintain Committed Shareholders
Information› Through holding general assemblies› Through providing a constant flow of
information Financial Care
› Paying out dividends regularly› Offering liquidity mechanisms (market for
shares)› When shareholders cannot get out, they are
looking for ways to get out› So it is better to find a mechanism to sell
shares› Diversification of Wealth through a family
office (also brings services to shareholders)
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More Practices to maintain Committed Shareholders
Training› Finance› Governance› Family Business Dynamics
Plant Visits, meeting with key managers Introductory weekend for future
shareholders Family Retreats and Family Events
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Answers found by Long-lasting family firms to typical Challenges
Family: Keeping Family Cohesion
Business: Selecting Family
Managersand Board Members
Ownership:Maintaining Committed
Shareholders
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Keeping Family Cohesion
The family element brings an element of over performance to businesses (several studies outlined this over performance to stock market companies)
However, when families are not well organized, or when cohesion is lost, they stop bringing value to the business
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Practices used to keep Family Cohesion
Organizing Family Meetings› 2 days including a plant visit, a party, a
business update, presentations by younger family members on their own businesses
› A week-end mixing work in plenary sessions, in small groups, and team-building games
› A memorable trip every three years Formalizing the “Rules of the Game” or
building Family Policies› Develop rules for ownership, management,
governance› Develop code of conduct for family members› Develop conflict resolution procedures for
handling conflict in the family
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Creating Family Cohesion
Reflecting on the Family Values and History
Setting up a philanthropic foundation Redefining the relationship between
the family and the Business Using a Fair Process in all decision
making
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Go Through the Process
Let the Process be fair- The Process is important in solving family business issues
Let them know the rule of the game ahead of time
Manage their expectations Create enlightened owners Inform Family Members permanently Separate between ownership and
management Establish an exit policy
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Recommendation
Nothing is given, it should be earned
You can work as a pioneer in your family and your family business
The sky is the limit!!
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Thank you for your attention
Contact Details: Dr. Josiane [email protected]@cyberia.net.lb; Mobile: 00 961 3 411 811