Hong Kong’s family firms struggle to merge tradition with young ambition
Family-run companies could face messy breakups if succession handled badly, consultancy says
Traditional family businesses dominate Hong Kong and mainland China’s economy – but fewer members of the younger generation seem willing to take up the mantle, putting many firms’ futures in doubt.
Family controlled businesses now make up approximately 60 per cent of both Hong Kong and the mainland’s GDP, experts say. About 3 million private enterprises on the mainland are also facing succession, according to a 2014 report from the Chinese Academy of Social Sciences.
Yet a survey last year by Shanghai Jiao Tong University showed that more than 80 per cent of the next generation are unwilling to join the family business.
“Some tycoons are now using professional managers outside of the family to run their enterprises,” said Michael Chan Yue-kwong, honorary chairman of the Legacy Academy institution dedicated to studying family firms and succession. “Even many of the local property tycoons might not have their own children managing the business.”
Chan, whose institution provides consulting services to family firms, said that transgenerational differences are creating family conflicts and posing challenges towards family business succession.
“Families always put the emphasis on the successor, ignoring the interests of other siblings. You need to ensure that their interests are also looked after,” said Chan, who was the former chairman of Cafe de Coral Holdings Limited.
