02:37 (GMT +7) - Friday 22/11/2019

Business

Forum: Family businesses the core of the economy

Released at: 17:28, 25/06/2019

Forum: Family businesses the core of the economy

Photo: Ngoc Lan

Family endeavors given focus at Vietnam Family Business Forum 2019 in Hanoi on June 25.

by Ngoc Lan

Family businesses are the core factor of the economy in any country and in Vietnam the 100 largest family businesses contribute about 25 per cent of the country’s GDP, Dr. Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), told the Vietnam Family Business Forum 2019 in Hanoi on June 25.

Among the 50 best listed companies in Vietnam are many family businesses and some are even bluechips, such as Vingroup, Vietjet Air, Thanh Thanh Cong, and Kido. “Promoting the development of the family business sector is also promoting the country’s economy,” Dr. Loc said. “In order to transfer success to next generation, the head of the family business needs a vision, a specific plan.”

Many opinions confirm that it is difficult to find a common formula for the successful transfer of a family businesses because there are many objective and subjective factors, including markets and competition.

Mr. David Tay, Business Development Manager, PwC Malaysia and Vietnam, said its survey reveals that 80 per cent of family businesses expect revenue to increase in all areas, up to 69 per cent expect higher revenue, and 16 per cent expect their businesses to grow rapidly and strongly. “Enterprises operating in the first generation and second generation often see the turnover at its highest, but the trend gradually decreases from the third and fourth generations onwards,” he added.

Mr. Pham Dinh Doan, Chairman of the Vietnam Family Business Council, said that 95 per cent of Vietnamese enterprises are family businesses and the majority are led by the first generation or are intertwined to manage and operate between two generations. “Generations must have regular dialogue and feedback and teaching the next generation is also an important factor in a transfer,” he added.

Finally, to succeed in family business, Dr. Loc said that corporate governance is the decisive factor. “Professional management must be built in every family business, while family members are encouraged to participate in investment and corporate governance,” he told the gathering. “Recruiting family members must be done as strictly as recruiting outsiders for the business to develop.”

User comment (0)

Send comment