Family Businesses: a key element of the economy of Poland and the world

Family businesses play a key role in the economy of many countries, including Poland. Their long-term vision, strong family ties and ability to withstand changing economic conditions make them a pillar of the economy, both locally and globally. What challenges and opportunities do they face in Poland?

There is no single, universally accepted definition of a family business. It is most often assumed that a family business is an enterprise that is controlled and managed by members of one family, and its survival, success and long-term development are aimed at transferring values and ownership to legal successors. The succession model most expected by business founders is, of course, generational succession. However, it constitutes only 10% of successfully implemented ownership changes, which means that company owners also use other solutions, such as succession among partners or succession with the participation of the managerial staff. The sale of the company may also be an implementation of the succession concept, provided that its purpose is to maintain the continuity of the company and not to liquidate it.

In Poland, according to various studies, family businesses constitute up to 60-70% of all enterprises, which makes them one of the pillars of the national economy. They generate over 70% of Poland’s GDP, creating approximately 8 million jobs. These companies operate in various sectors – from production, through services, to agriculture – and have a huge impact on the development of both local communities and the entire country.

The succession process – a challenge for family businesses

One of the biggest challenges facing family businesses is the succession process. The desire of most business owners is to ensure the continuity of the business by passing it on to the next generations. Meanwhile, generational succession accounts for only 10% of successfully implemented ownership changes. This means that family businesses in Poland often look for alternative solutions, such as succession among partners or management staff.

The lack of succession plans is one of the main reasons why family businesses will not survive generational change. The succession process is not only about transferring ownership, but also about preparing the next generation to manage the company, which often involves the need to resolve internal conflicts and maintain the integrity of family values.

Key pillars of the identity of family businesses

The identity of a family business is based on several fundamental pillars:

Family values and long-term vision

In family businesses, values such as trust, loyalty, responsibility and striving for stability are often more present than in corporate enterprises. Decisions are made with the goal of stable development over decades, which promotes longevity.
Adaptation and innovation

Family businesses have to adapt over the years to changing social, economic and technological realities. The ability to evolve while maintaining core values is one of the main factors that allows them to survive. Many family businesses invest in innovation and are able to quickly respond to changes, which allows them to survive in a competitive environment.
Flexibility in management

Family businesses are often more agile than large corporations, which allows them to make decisions faster and adapt to changing market conditions. Thanks to this, they can offer a more personalized approach to customers and better adapt their offer.
Involvement in local communities

Many family businesses, especially in Poland, have deep ties with the local communities in which they operate. This translates into greater involvement in social activities and responsibility for local development. Thanks to this, they build loyalty of customers and business partners, as well as a stable reputation.

The importance of family businesses in the world

Internationally, family businesses have different faces, depending on the culture, business tradition and economy of a given country. However, certain elements are common to most of them.

In Europe, in countries such as Germany, Italy and France, family businesses are the foundation of the economy. In Germany, the term “Mittelstand” refers to medium-sized family businesses that are a key element of the country’s export power.
In North America, the United States and Canada, family businesses often operate in a more corporate structure, but their family values are still evident. Examples include giants such as Walmart and Ford.
In Asian countries such as Japan, South Korea and India, family businesses have a long tradition of succession and passing business from generation to generation. Japan is famous for companies that have been operating continuously for hundreds of years.

The oldest family businesses in the world and in Poland

The oldest family business in the world is the Hoshi Ryokan company, founded in 718. It is one of the oldest hotels in the world, run by the same family for over 46 generations. Until recently, the leader was the Kongo Gumi company, founded in 578, specializing in the construction and renovation of Buddhist temples. Although the company was acquired by Takamatsu Construction Group in 2006 due to financial problems, it continues to operate and part of the Kongo family remains involved in its management.

Château de Goulaine is the oldest operating company in Europe, founded around 1000 in France. This company, which is both a castle and a vineyard, has been in the hands of the Goulaine family for over a thousand years.

The oldest operating family-owned company in North America is Shirley Plantation, founded in 1613 in Virginia, USA. This plantation, owned by the Hill-Carter family for 11 generations, initially specialized in tobacco cultivation, and today deals with tourism and protection of cultural heritage.

In Poland, the oldest family company is Apteka Pod Złotym Lwem in Wrocław, founded in 1773. This pharmacy has been operating for over 250 years and is still run by subsequent generations of pharmacists. It has survived many historical changes, combining a traditional approach to pharmacy with modern solutions.

Challenges and prospects for family businesses in Poland

Polish family businesses face challenges related to succession and professionalization of management. The first generation of entrepreneurs who started companies in the 1990s is slowly passing the baton to their children. This process does not always run smoothly, and the lack of preparation for succession often leads to problems in continuing the business.

One of the key challenges is also the professionalization of management. Family businesses increasingly use external consulting in the field of succession, asset management and strategic planning to ensure stable development and transfer of the company to the next generations.

Family businesses, both in Poland and around the world, play a key role in the economy thanks to their strong values, long-term vision and ability to adapt. However, to continue their development, they must meet the challenges of succession and adapting to changing market conditions.

Author:

Ph.D. Małgorzata Rejmer – expert in family businesses and succession, founder of the Lex Financial Firm family business and Chairwoman of the BCC Family and Partnership Business Committee.