Academic journal article European Research Studies

Specifics of the Development of Family Businesses in the Czech Republic

Academic journal article European Research Studies

Specifics of the Development of Family Businesses in the Czech Republic

Article excerpt

1. Introduction

Throughout the world much attention is paid to family enterprises as they have a major impact on the global economy. Family enterprises can be found in more or less all fields of the world economy, and have a major impact on the rate of employment, added value, investment and capital formation (Allouche et al. 2008). Well-known global brands are family enterprises. The Global Family Business Index (3) includes the 500 biggest global family businesses. This index provides clear proof of their economic power. The revenue of the top five companies amounts to 1,070.2 billion $ and the companies employ 3,585,986 employees--see Table 1.

Globally, family enterprise is a field of study taught at universities--e.g. the Center for Family Enterprise and Ownership at Jonkoping International Business School in Sweden, the University of Jyvaskyla, School of Business and Economics in Finland, the European Business School in Germany, the Family Business Centre in Switzerland, the Cambridge Institute for Family Enterprise, and the IMD in Lausanne offers an MBA for owners of family businesses, etc. In 1984 Barbara Hollander (1939-1993) started Family Firm Institute, Inc. in Los Angeles with the mission to be most influential global network of thought-leaders in the field of family enterprise. Professionals, teachers and scientists, as well as owners of family businesses from more than 88 countries from around the world (nearly half of all nations) belong to the FFI. Together they represent the oldest and most prestigious multidisciplinary professional association of family enterprise in the world. In 1997 the Federation of European Family Enterprise was founded. Its main objective was to create regulatory frameworks (legal, tax, administrative) to support continuous family enterprise and to ensure equal conditions for accessing (own and foreign) capital as resources for funding a family business, to enable education and support of a new generation of sole traders, to process statistics evaluating the share of family enterprise in EU economy, and to prevent excessive red tape.

The situation in the countries of the former socialist block is more complex. Regulation and support of family enterprise is no different from the regulation and support of companies that are not family owned. Only issues concerning legal aspects, such as succession and reallocation of ownership, differ (Petru, Jakubikova, 2015). Considering the fact that there is no single definition of the term "family enterprise" and no statistics specific for family businesses, the number and importance of family businesses can only be estimated in the CR. The Chamber of Commerce of the CR mentions in its reports a number of entrepreneurs, including family members involved in the family business--based on the methodology of the International Labour Organisation (ILO)--i.e., 793.8 thousand people in the second quarter of 2015. The Czech Statistical Office (CSU) does not carry out separate statistical evaluation of family businesses. In a sample survey, entitled Employment in NH by job position, job classification and qualifications, we can find an item entitled Entrepreneurs, including family members involved in the family business, and in the third quarter of 2015 we can see the number of 871.6 thousand, which means that entrepreneurs had a share of 17.2% of total employment (CSU, 2015). The key state institution supporting business enterprise in the CR, the Ministry of Trade and Commerce, does not deal with family enterprise, however, with regards to the fact that family enterprise is mostly in the SME sector, the support provided to SME also covers family enterprise. One of the priorities of the government is to support the competitiveness of small and medium-sized entrepreneurs, who in the CR represent more than 1 million business entities, i.e., 99.84 % of all entrepreneurs. They employ over 1.8 million people and contribute by circa 51% to exports and circa 56% to imports (MTC, 2012). …

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