18 January 2010

Family Businesses in Saudi

I was so busy with a lot of tasks in the office for the past few weeks. I had single handedly arranged the ‘Family Business Sustainability Forum’ which is sponsored by our company. Well, single handedly is such a big word ha ha ha ha… I had to admit that my boss also played a very large part in that event. The good thing with my boss is that he knows a lot of people and he has a lot of connections. We can negotiate a deal without any glitch. That’s why in some of the business dealings, we really need the Arabs. They have a unique culture that the westerners and other cultures don’t have. These guys would just kiss each others cheeks and wallah! .. the deal is signed.


Most of the businesses in the Kingdom of the Sands are family owned. Family owned businesses flourished in the 70s when the Saudi government decided to diversify its economy. One of the best examples of those companies is Olayan. According to my boss, the Olayan’s are five times richer than the Zed’s. They also owned five percent (5%) of the American Express. There are numerous advantages and disadvantages of family owned businesses. Let’s leave it up to Peter Leach and Dr. Ben Harper (our speakers) to discuss those things. I think the most important point in their discussion is that family businesses have more compassion. It’s not like in the Public Companies where if a manager fail, they’ll fire him right away. If you are working in a family owned business like ours, you’ll notice that the Managing Directors or Presidents are look up to as the father of the employees. The owners look up to their subordinates as sons. The patriarchal values are absent to the publicly listed companies where everyone is geared towards profit. The dog eat dog word doesn’t exist in the family owned companies.

The speakers said that the first generation who established the business toiled hard. The second generation grows the business. The third generation, born in golden spoons squandered the business. That’s a proven fact since most of the case studies presented during the forum showed how some of the Italian family businesses were destroyed because of the infighting.

The purpose of the forum was to guide the families to professionalize their companies. We’re getting there but professionalizing the family owned companies, particularly our company is a very big word. We’ll leave it up to strategy people to take the first few steps. To me, the future of our company is in the hands of our future leaders … the Zed future Leaders who will one day run our company.

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Before the forum I had to visit Mövenpick Hotel to look at the venue and finalize all the arrangements. I must admit that the structure, interior and the façade are impressive. My only disappointment is their food. For me, nothing really beats Carlton Hotel when it comes to food. They have the best food in Eastern Province.

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Our event is a gathering of all the wealthy families in the Kingdom of the Sands. You’ll literally be rubbing elbows with Saudi’s rich and famous. My boss estimated the total assets of the participants to reach more than 100 Billion USD. I don’t know if that’s accurate though. I just wish that one day, like them, I’ll be attending this sort of gathering for the rich and famous.

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