Some SR 15 billion of family companies are frozen due to disputes between family members after the death of founders, said an expert.
Sami Tysir Sulaiman, in a lecture organized by the Eastern Province Chamber of Commerce and Industry, said 98 percent of the companies operating in the Gulf Cooperation Council (GCC) are family-owned firms.
The volume of investments of family businesses in the Kingdom exceeds SR 250 billion. Forty-five family companies fall within the biggest 100 companies in the Kingdom. Revenues of these companies touched SR 120 billion in 2003, and they employ nearly 200,000 people, he said, adding that their share to the gross domestic product (GDP) ranges between 22 percent to 30 percent.
Referring to reasons of failure of family business, the expert said they could be attributed to the weakness of the spirit of leadership in the absence of the founder, expansion of investments beyond the capabilities of the family members, differences among members due to varying visions, leakage of competent family members due to lack of incentives compared to labor market, interference of family dimension with investment outlook and favoritism among relatives.
