Family business - Romanian particularities

Family businesses are the most traditional form of business in the world, making up an important part of the global business environment even today. In Romania, family businesses, along with the entire entrepreneurial arena, performed an important “restart” in the early 1990s, once the country switched from planned economy to market economy. Therefore, the majority of Romanian companies are still being run by their first generation of entrepreneurs.

Specifically, 67% of Romanian family businesses are still being led by their founders, but according to the EY study most of these companies are actually preparing for their first succession. In fact, all family business (100%) with a revenue of over EUR 1 million have already designated the person or persons responsible for succession, a trend that actually exceeds the global average of 87% in terms of ​​succession planning.         

However, unlike the global trend that sees the company’s board as the primary entity responsible for succession (in 44% of cases), in Romania the owners of the firm are by far those who deal directly with this process (in 78% of cases). Hence, we can deduce that Romanian companies in general are more dependent on the founder/owner than international ones and more reluctant to provide decision making attributes in the company to external parties.

More specifically, this reluctance seems to emanate from lack of trust in the people who are not family. In fact, no less than 74% of the study participants argued that the main reason for choosing to start a family business is the increased confidence in family members compared to that in outsiders. Moreover, communication seems to be a lot more direct and easier to conduct when it happens in the family, which is why 85% of respondents said they have regular meetings with family members to discuss business related issues.            

Finally, these firms seem to perpetuate the idea of ​​family in their immediate area as well, about 95% of Romanian family businesses being involved in various social responsibility projects within the community they belong to.  

Sources:  

https://www.eyromania.ro/sites/default/files/attachments/Barometrul%20afacerilor%20de%20familie_Romania%202017_FINAL_.pdf

http://www.mediafax.ro/economic/una-din-cinci-afaceri-romanesti-de-familie-de-peste-un-milion-de-euro-a-trecut-la-a-doua-generatie-de-antreprenori-16198732

http://www.eyromania.ro/search/content/familie 

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