Data Analysis
Descriptive statistics were used to analyze the data. As such, various features of the data were presented in their simplest forms and summaries to aid understanding of Qatari family-owned businesses. Alongside simple frequencies, percentage, and graphics analysis, a robust quantitative analysis was conducted to describe and present data in a meaningful manner such that, for instance, the researcher was able to identify emerging patterns.
It is imperative to recognize that descriptive statistics were not applied to draw any conclusions beyond what the results revealed from the analyzed data. Besides, no hypotheses were tested in this work. Hence, the data analysis technique used was simple a method to describe and present results.
The Qatari family-owned business survey consisted of 29 questions. There was also background information focusing on the number of years the business has been in operation; the sector; position, education, years with the business, and age of the respondent; the family generation running the family business. It also covered the family members (father, son, mother, daughters, cousins, etc.) involved; current geographical areas of operations; and the estimated annual revenue in Qatari riyal (millions) for the last three fiscal years. Additionally, the major topics of the study included the company structure; family governance; family-owned business management; challenges faced by family-owned businesses; the role of women in family-owned businesses; and solutions to the current and expected challenges.
Of the 30 family-owned businesses contacted for the survey, 25 completed the survey – reflecting a response rate of 83% percent. Data analysis, therefore, was based on the completed 25 survey results to draw patterns of Qatari family-owned businesses.
Results
Background Information
The survey focused on family-owned businesses from a wide range of industries, including retail and consumer products (28%); industrial and manufacturing (16%); technology (0%); real estate and construction (4%); professional services (lawyers, surveyors, accountants, consultants, etc.) (8%); financial services and insurance (8%); transportation (16%), tourism and hospitality (12%), medical or health (8%), and any other sectors specified by the respondents (none). Most Qatari family-owned businesses were concentrated in the retail and consumer products sector, but results indicated that no technology firm took part in the study.
These businesses can now be found across a variety of sectors, including professional services and medical or health services, which require specialized knowledge and much-qualified staff to run. They reflect the changing needs of the community and the availability of skills to meet such needs. However, there is no single Qatari family-owned company in the field of technology, according to the results of this study.
Number of Years in Operations
Respondents were also asked to specify the age or the number of years the family-owned business has been in operation. The ages of the companies ranged from 1 year to more than 51 years old. Majorities of the companies had been in operations between 21 years and 30 years (seven companies, but only one company in this survey had been in business for over 50 years. These results demonstrated one critical issue in family-owned businesses. That is, family-owned businesses are resilient to some extent, but majorities do not always last more than 50 years.
The Family Generation Running the Family Business
Family-owned businesses in Qatar were relatively young. There were no family-owned businesses in the survey, which were managed or run by a third or a fourth-generation family member. Second generations and first generations ran or managed majorities of Qatari family owned-businesses.
Previously, it was determined that one of the companies in the survey result has operated for more than 51 years, but this business was neither managed by the third nor the fourth generation, underscoring the point that Qatari family-owned businesses have not endured many generations. Findings also showed that majorities of the businesses were owned by their founders and the second generations. Fathers were heavily involved in the day-to-day running of the business.
Out of 25 businesses, only about five companies had operations outside Qatar and only one operated beyond the GCC, implying that their operations were mainly concentrated in the parent country, Qatar. Thus, the current primary market for these Qatari family-owned businesses was mainly in Qatar. It is however promising to note that some Qatari family-owned businesses were now striving for regional operations within the GCC and beyond.
Survey respondents were asked to note their position within the business, and responses were diverse. The highest percentage was recorded for business owners, who run their businesses, then 16% of the respondents were in the management category, and the rest 12% were employees. The research did not explore whether other more positions held by an individual, such as being a member of the board, a chief executive, a shareholder, or a chairman, all at the same time.
All respondents who took part in the survey were male. That is, there were no female participants. Of all the respondents, 64% had been in the family business for more than 11 years, 24% had been with the family business between six years and ten years, and 12% have worked in the family business between one year and five years.
Estimated Annual Revenue in Qatari riyal (millions) for the Last Three Fiscal Years
From the data collected on revenues estimated for the last three fiscal years, majorities of Qatari family-owned businesses appeared to be small businesses with relatively small annual turnovers, but the figures reflected their sustained operations for the last years. As these businesses would continue to grow over the years, their annual turnovers would also be expected to increase.
It is noteworthy that these figures were just estimates. However, one cannot deny the economic impact of Qatari family-owned business on the entire economy.
The Company Structure
Respondents were also asked about the structure of their companies. The questions explored under the company structure included the availability of a written vision, the composition of the board members, the capability of the business to meet its strategic objectives as planned, and the identification of specific areas that would facilitate the realization of strategic objectives or goals.
A Written Vision, Mission and/or Strategic Objectives or Plan
Majorities of the companies (92%) had some written plans, vision, mission, and/or strategic objectives to guide their operations. However, a small percentage (8%) lacked any guiding plans for the business, and in such cases, the founders were firmly in control of their ventures, implying that any plans existed within the minds of such founders.
Although some of these companies had clearly defined goals or plans, they rarely adhered to these plans. Besides, it was not clear how companies that did not have any strategic goals were managed for growth and success.
Members of the Board
In this survey, it was determined that all members of the board were male. That is, no woman was among the key decision-makers in the Qatari family-owned business. The absence of women among the members of the board could be attributed to a strict culture of Qatar that requires women to take domestic roles. It is also important to note that not all Qatari family-owned businesses had aboard. Only 84 percent of the companies had a board, while the rest (16 percent) did not have it.
Majorities of family-owned firms in Qatar start as controlling owner businesses in which one individual, usually the father, has all the voting control of the company and makes most of the fundamental decisions alone while the rest of the members are expected to execute such decisions. For relatively young family owned-companies, the board was mainly made up of close family members, cousins, friends of the founder, and/or business associates. This type of board generally was not influential and only supported strategic decisions made by the business owners. Hence, owners of Qatari family-owned businesses still dominated every aspect of their companies.
There were extremely few cases (8 percent) in which ‘outsiders’ or non-family members were a part of the board or held senior positions in the Qatari family-owned businesses. This showed that many family-owned businesses in Qatar were not just ready to consider outsiders for any decision-making roles or senior positions. Thus, having a family member on the business was more important than hiring outsiders to bring new insights into the business.
Areas that will facilitate the Achievement of Strategic Goals
Respondents were asked about specific areas they noted as vital for the realization of their organizational strategic goals. Majorities noted that technology (48 percent) would help their family-owned companies to attain strategic goals 36 percent cited finance, while 16% noted human capital. These findings reflected the desire of many family-owned businesses in Qatar to automate their operations and derive the related benefits. Additionally, respondents also noted the need for more financing and human capital to help them realize their organizational objectives.
Family Governance
Under family governance, the research questions explored issues related to the adequacy of the family governance structure in place that offers direction and control of the business and the effectiveness of the family business council. They also responded on the clarify of the stated functions and responsibilities of the board, any clear procedures for recruiting members of the board, established mechanisms to deal with conflicts between family members, and whether family member interests and business strategies were aligned.
Sufficient Family Governance Structure in Place
Respondents had diverse views regarding the sufficiency of their company’s governance structure in place to offer direction and control of the business. Of all the interviewed respondents, eight (32%) slightly agreed that they had sufficient family governance structure, seven (28%) agreed, three (12%) strongly agreed, another three (12%) slightly disagreed, two (8%) disagreed, and another two (8%) strongly disagreed. This implies that most Qatari family-owned businesses require an adequate family governance structure to provide direction for the management of the business.
Effectiveness of the Family Business Council
The study also focused on the effectiveness of the family business council about regular meetings, the role of family members, developing business strategies, and accounting for owners/family welfare. A family business council is considered as an essential forum where family members hold their meetings to discuss business and plans. It is also used to resolve any issues that may emerge.
All the family-owned businesses, which had a family business council agreed that it was effective, although to a varied extent. According to the respondents, 48 percent agreed, 32 percent strongly agreed, and 20 percent slightly agreed. More importantly, no single family-owned business undermined the importance of the family business council. The composition of the family business council mainly reflected family members. However, close cousins and in-laws were occasionally considered, but women were rarely a part of the business council.
Stated Functions and Responsibilities
There appeared to be a challenge with the clarity of functions and responsibilities of the board of directors among family-owned businesses in Qatar. Some respondents (72%), when asked about clearly stated functions and responsibilities of the board, they responded ‘no.’ The same percentage (72%) also observed that their family-owned firms did not have any clear procedures for recruiting and selecting members of the board.
On conflicts, nearly all family-owned firms (96%) in Qatar noted that they had established mechanisms to deal with conflicts between family members. The most crucial mechanisms in place for resolving family conflicts were mainly meetings or councils and the use of the board. Additionally, the family also discussed their business issues at home at any time. The study also demonstrated that family conflicts in the businesses occurred due to a lack of aligned interests of the family members and business strategies (76%).
Failure to communicate effectively was also a significant source of hindrances to handling family business conflicts. It is essential to recognize that a small percentage of Qatari family-owned businesses that did not have mechanisms in place did not mention how they resolved their conflicts. When respondents were asked about the use of external consultants, only 12 percent relied on external consultants to explore their business strategies and interests to avert conflicts.
Management, Succession Planning, and Transition to the Next Generation
The Business will continue under Family Ownership
When asked about the future continuity of the business, all respondents indicated that the business would continue under family ownership. This implies that Qatari family-owned businesses were not likely to be sold to outsiders or go public through IPO (initial public offering).
Participants were also asked to mention the reasons that motivated them to start, run, or join the family business. Many respondents (13 or 52 %) indicated growth of the family business as extremely important, shared family values for business was indicated with 12 percent (three respondents), and to acquire experience for later engagements was 20 % (5 respondents), and influence or pressure from other family members was noted among four respondents (16 %). Family members anticipated future growth and better opportunities, and they were willing to join family businesses to realize these dreams.
The results also showed that only 16% of the respondents were influenced to join family-owned businesses. This finding is interesting for subsequent generations because family-owned businesses in Qatar are more and more becoming attractive and could be alternative employers to many young people. However, values and the desire to ensure the success of the business were also equally important.
The professionalization of the Business
Respondents were also asked whether they had any plans to professionalize their family-owned businesses by hiring external managers, auditors, employees, and other staff. It however appeared that majorities (96 %) of Qatari family-owned businesses were not ready to hire any external staff to run their business. Although no clear reason was provided, it appeared that they did not wish to lose control of the business to outsiders.
Financial Performance
Qatari family-owned businesses continued to perform well to improve year-over-year financial results under current family managers. Hence, it appeared that there was no reason to change the management team or hire external staff.
Any Written Plan for the Transfer of Ownership to the Next Generation
As previously established, majorities (84 %) of the companies were under the management of the second generation. However, respondents indicated that not all companies had a clear written succession plan. Only 28% of the respondents indicated that they had a clear succession plan for the transfer of ownership to the next generation or when an inventible loss occurs to a major player in the family business, 72% did not have any plan.
The research further sought if the succession plan or transition plan identified the successor following the retirement of every member in the business. From the 28% (7 respondents) of the respondents who had a written succession plan, only three respondents indicated that their family-owned companies had identified the successor and family-owned businesses were expected to support the retired family members.
Women considered in the Succession Plan to Replace Retirees
All respondents indicated that their family-owned businesses did not have any consideration for women in their succession plan.
Family-owned Business Challenges
This section explored challenges faced by family-owned businesses in Qatar; related mechanisms of resolving them; and factors inhibiting the growth of family-owned businesses. Respondents had the opportunity to identify any listed challenges that they faced in their businesses, and the results were presented as follows.
Financial planning and strategy execution, succession or transition to the next generation plans, and conflicts between family members were the three major challenges facing Qatari family-owned businesses. Additionally, slowed growth was generally linked to competition among businesses.
Mechanisms Used to Resolve Family Conflicts
Respondents indicated that family council or meeting (33%) was the most preferred means of resolving family conflicts. Families that had a board also used it to resolve conflicts, but others opted for external consultants (26%) or legal processes (13%).
The Role of Women in the Business
Percentage of Women Employed
All the respondents indicated that their family-owned businesses had about one percent, female employees. Additionally, a similar percentage was also indicated for women in management and executive positions. Further, many companies did not have any clear gender equality programs in place to support the employment and promotion of women employees.
Solutions and Plans for the Firm
Respondents were also asked about potential solutions and plans for their companies from the given list. They indicated the addition of more capital to the business and expansion/internationalization. Although the intention for initial public offering (IPO) was also presented, all family-owned companies indicated that they were not sure about it.
Succession and Transition
Respondents indicated that succession and transition required prior planning to avoid wrangles. They observed that successful family-owned businesses were well managed with family members, and management challenges and family wrangles were better handled with the family business council to ensure the stability of the business and harmony among family members. This showed that family business prosperity and growth were more important for respondents, and all effective mechanisms were required to mitigate them.
Non-family members, including distant relatives, were not highly regarded for senior positions in Qatari family-owned businesses. Majorities (84%) rejected such ideas of having non-family members in influential senior positions, indicating that Qatari family-owned businesses were not ready for such practices.
Summary of the Findings
Results from the Qatari family-owned business survey showed a strong connection to the family business. The survey covered results in the major topics of the study, including the structure of the company; family governance; family-owned business management; challenges faced by family-owned businesses; the role of women in family-owned businesses; and solutions for the current and expected challenges.
Most of the surveyed Qatari family-owned businesses were managed or run by executives from the first and second generations. The age range of the businesses surveyed in this study was from 1 year to over 51 years, indicating that Qatari family-owned businesses were relatively young. Notably, all family-owned businesses surveyed were in Qatar, although a few cases had branches outside the country.
All businesses surveyed had a turnover of millions of riyal every year, suggesting that these family-owned businesses had significant impacts on the Qatari economy. The study showed that 92% of Qatari family-owned businesses had some form of written mission/vision or strategic plans, but these plans were rarely followed. The companies (84%) also had aboard, but the membership was mainly drawn from family members. No women were a part of the board across all companies surveyed.
On family governance, respondents had mixed reactions ranging from strongly agree to disagree. Family business councils or meetings (32%) were the most popular and considered effective for handling any issues affecting the business. On management, succession, planning, and transition to the next generation, all respondents indicated that their family-owned businesses would remain in the family, they (96%) were not ready to hire outsiders, and the growth of the family business was extremely. Results also showed that only a small percentage of Qatari family-owned businesses had any written plans for the transfer of ownership to the next generation.
More importantly, no surveyed Qatari family-owned businesses included any women in the succession plan. The survey results also showed that women were poorly represented in the companies (less than 1% employed), and they were hardly considered for senior positions. Additionally, only a few companies (12%) had some gender programs in place. Qatari family-owned businesses identified three significant challenges as financial planning and strategy execution, succession or transition to the next generation planning, and conflicts between family members.
The most preferred solutions to these challenges were the injection of capital and expansion of the businesses. Finally, succession and transition were still guarded within the family circle. Overall, it was suggested that Qatari family-owned businesses require long-term education on the best practices to ensure transition and viability to the subsequent generations.