Complexity:
Family business often encourages creativity and the company becomes rich in terms of goals and objectives, but this complexity needs to be managed properly otherwise, it can create many problems in the business. These complexities often lead to draw-off of company's energy and resources as well.
Business Culture:
The culture at Zayed Al-Hussaini was informal and flexible. The major benefit of informal and flexible culture is the creation of adaptable environment, which directs the company towards efficiency and growth. On the contrary, the culture leads to high emotions that at times are not good for the decision-making in the business. In addition to that, the top management of the company is very resistant to change and they do not appreciate any change in the organizational culture.
Success and Failure Rates:
According to some statistics, the failure rate of a family business is often high as compare to the non-family business. Most of the time, family business does not last for long and eventually split because the family and business conflicts. This happens because most of the time, members failed to differentiate between family and business matters.
| Dimension | Strengths | Weaknesses |
| Infrastructure | Informal and flexible | Leads to improper management |
| Involvement by family | Shared values and high spirit | Difficult to differentiate business and family matters |
| Succession Planning | Later generation can be trained early. | Complexity in selecting the successor |
| Complexity | Build creativity | Creates confusion |
| Business culture | Innovative and adaptable | High resistance to change by founders |
| Success/ Failure rates | If successful, then business prospers greatly. | High failure rate in the family business |
Challenges in the Family business:
Managing emotions:
The first and foremost challenge which needs to be tackled in the family business is of controlling emotions by every family member. All members in the business should understand that involving family matters into the business will not only affect the business in terms of growth and profit but will also affect family relationships.
Informalities:
Family businesses often don't have a clear business vision and policies which can be a major cause of failure. In the case of Zayed Al-Hussaini, the company sets clear policies and vision about the business.
Confusing Roles:
Often, management and business roles in the family business are confusing as each person is playing multiple roles in the business. Therefore, business roles for each and every person should be clearly defined.
Succession Planning:
Most of the time, the senior members of the board do not decide about the succession of a business. They do not have any plans of handing over business to the next generation. As in the case of Zayed Al-Hussaini group, the owner Zayed has not decided properly about the successor of the business and didn't discuss it with other members of the board as it created a lot of conflicts and clashes between the members in the family especially Majid and Fatima get seriously upset with Zayed's decision about making Ahmed the General Manager of the company.
Control on day to day operations:
Sometimes, it becomes very difficult for the senior members to control the next generation as they are often non serious-or simply not interested in the family business. In addition to that, they often show less interest in day to day activities and operations of the business.
Nepotism:
Often the senior members or the founder of the company felt obliged to hire someone from the family for the top management position. They often have to overlook individuals that are even better than the family members. If the company forcefully chooses to select a family member for the management position who may not be suitable, then it would give nothing but loss and problems to the business.
Three Circle Model:
A business is known to be a family business when the ownership and management of the company are in the hands of the family. One can define a family business in terms of three elements which are family, ownership and business. The three circle model identifies the dependence of family, business and ownership on each other. If the main roles in each of the circle have been identified then it becomes easier to identify the inter-dependence of one circle to other........................................
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