It is easy to experience unqualified admiration for the rapid rise of Asian economies and the continent’s powerful, family-led businesses. But academics suspect that hidden in that strength lies a weakness.
They warn that a great deal of Asian wealth is tied up in family businesses and that much of it will be lost when the head of the family finally decides to step down from the company. Although problems with succession are not unique to Asian family businesses, the difficulties are more acute because there is an added cultural reluctance to broach the issue of succession, according to one academic who specialises in the subject.
“To talk about succession is almost like putting a curse on someone,” says Yupana Wiwattanakantang, associate professor of finance and corporate governance at the National University of Singapore Business School. In Asia, the leaders of family businesses tend to be patriarchs rather than matriarchs, she says, and these men want to continue at the helm of the organisation until their dying day. Family members do not want to allude to succession because it might sound as if they were wishing their father or grandfather ill.