What is a Family Business?

Family businesses are those companies created and managed by a family.

What is a family business in practice?

In practice, a family business materializes in different ways, this must include the aspect of business succession.

In the professional context, a family business would be defined as: that company whose assets and governance are exercised by the members of one or more families; its strategic objective being the continuity of the company under the control of the next family generation.

Characteristics of family businesses

They have the majority voting capacity, which must reside in the members of the family that founded the company or in those who succeeded them by inheriting the assets, as well as its management.
Said majority of votes can be direct or indirect.
The family business must have at least one representative of the family or relative must participate in the management or government of the company.

Those listed companies, whose property is divided into shares and whose main shareholder has less than 50% of the voting rights. The definition of family business applies, if the person who founded or acquired the company, his relatives or descendants own at least 25% of the voting rights.

Although the family does not have the majority of the votes of the company, it must exercise; through its shareholding, a decisive influence on any decision-making of the company.

Examples of family businesses in Spain

Many important Spanish companies have their origins in having been created as family businesses. Over time, as the company grows, with the need for financing or lack of successors, in many cases they open their shareholding and management to professionals, external and unrelated to the family, and have ended up becoming non-family companies.

Companies known to all such as El Corte Inglés, Mercadona, Inditex or Banco Santander, were and some still are considered family businesses.

In Spain, more than 10 million workers are part of these companies that represent approximately 70% of the Gross Domestic Product. They are in sectors such as food, construction, real estate and commerce, at the head of almost all areas of the economy.

Strengths and weaknesses of a family business

• Strengths of the family business: Its strengths are the transmission of values ​​and the family culture to the work environment, as well as closeness to the client, flexibility and the ability to plan long-term goals. The family business is focused as a life project of several generations.
• Weaknesses of the family business: Regarding its weaknesses, the difficulty in obtaining financing, and more so when credit is restricted by the economic recession. Business families maintain a high aversion to risk because their own wealth is at stake. Its growth capacity may be limited. The absence of successors or adequate training in them can lead to the disappearance of the company. If these drawbacks are overcome, the family business becomes a great employment and future option for everyone, with a very good working environment.

Family businesses are the foundation of the world economy, contributing more than 50% of the countries' GDP, and more than 80 percent of students end up working in a family business, approximately 4 out of 5 students.

In Spain, the Family Business is one of the pillars of the economy, proof of this is the network of Family Business Chairs that most Spanish Universities have. On November 18, 2021, the Family Business Chair Bosch Aymerich of the International University of Catalonia organized a conference on Succession in Family Businesses, a fundamental aspect for its continuity. This chair directed by the lawyer and professor Jordi by Juan Casadevall is a reference in the academic field on this subject.

Unique family businesses

1-Walmart

Walmart, a family business founded by Sam Walton in 1962, has grown from a modest discount store to a global retail giant. With a history spanning more than six decades, Walmart stands out for its customer-centric approach and commitment to continuous innovation.

The company operates a wide range of services and products, including supermarkets, discount stores, financial services and e-commerce under various brands, such as Walmart and Sam's Club. What sets Walmart apart is its ability to offer low prices and a wide selection of products, supported by a focus on operational efficiency and advanced technology. As a leader in sustainability and corporate social responsibility, Walmart remains a dominant force in the global retail industry.

2-Volkswagen

Volkswagen AG, a family-owned business founded in 1937, has left an indelible mark on the global automotive industry. From humble beginnings to becoming one of the world's largest automobile manufacturers, Volkswagen has gone through times of growth, innovation and challenges.

With significant milestones such as the launch of the Volkswagen Golf in 1974, the company has stood out for its focus on innovation and sustainability, leading the development of advanced technologies and making significant investments in research and development.

Additionally, Volkswagen is distinguished by its commitment to quality and design excellence, cultivating a reputation for reliability and durability. Volkswagen AG is therefore a company rooted in tradition and innovation, which continues to be a leader in the global automotive industry.

3-Ford Motor Company

La Ford Motor Company, founded in 1903 by Henry Ford, is a leading example of a family business in the American automotive industry. From its beginnings in a small shop in Detroit, Ford revolutionized production with the moving assembly line, making automobiles accessible to the masses and transforming global manufacturing. Over the years, the company has diversified beyond automobile manufacturing, moving into trucks, commercial vehicles, financial services and propulsion technologies such as electric vehicles.

Despite challenges such as the oil crisis and international competition, Ford has managed to maintain a balance between tradition and innovation, standing out in the sector as a company that combines its family heritage with a commitment to sustainability and advanced technology. . This adaptability and fidelity to its roots keeps Ford relevant and respected globally.

4-Berkshire Hathaway

Berkshire Hathaway, originalmente una compañía textil del siglo XIX, se transformó en un coloso multinacional bajo la dirección de Warren Buffett desde 1965. Ahora, es un conglomerado que posee y gestiona una diversa gama de negocios, incluyendo seguros, ferrocarriles, y marcas reconocidas como GEICO y Duracell, además de tener inversiones significativas en grandes empresas como Apple y Coca-Cola.

A pesar de su escala global y diversificación, Berkshire Hathaway conserva las cualidades de una empresa familiar, con una estructura corporativa simple y una gestión descentralizada que permite a sus subsidiarias operar de manera independiente. Este enfoque refleja un compromiso con los valores tradicionales de inversión y gestión, destacando la habilidad de la empresa para mantener prácticas de negocio prudentes y una sólida ética de inversión, características que la distinguen en el panorama corporativo global.