Family Business Survey 2016

The Malaysian Chapter

In our latest Family Business Survey, we find that, while some family firms are managing strategic planning well, many are caught between the deluge of everyday issues and the weight of inter-generational expectations.

69%

of Malaysian family businesses have next generation family members working in the business
31%

of Malaysian family businesses have no succession plan in place
19%

of Malaysian family businesses aim to grow quickly and aggressively in the next 5 years
56%

of family businesses have realistic plans for measuring the tangible benefits of going digital

The 'missing middle': Bridging the strategy gap in family firms

This is the 8th PwC Family Business Survey and it's the largest yet. We spoke to firms across 50 countries at various stages of growth - some approaching their first generational transition, and others that can measure their longevity in centuries. We talked to founders, next gens, and professional CEOs and discussed global megatrends such as digital and globalisation, and the challenges of 'keeping it in the family'.

Key issues remain consistent year-on-year, but there is also change. In 2012, the dominant themes were skills, scale and succession. By 2014, this evolved to a focus on the need to professionalise both the business and the family. This agenda is far from complete, though progress is being made.

This year, the shift is perhaps more fundamental: from the short term and tactical, to the medium term and strategic. The challenge is in the middle - having a strategic plan that links where the business is now to the long term. This is what we are referring to as the 'missing middle'.

In Malaysia, we spoke to 48 Malaysian family businesses to get an understanding of the key issues currently on top of their minds. In the current economic climate, key short term issues that family businesses in Malaysia are facing include volatile market conditions and the recruitment of suitably skilled staff. However, it is heartening to know that ensuring the long term future of the business is the key goal for respondents in Malaysia as it is globally.

In this report, we take a quick look at the key findings from the Malaysian results as well as hear from two family business leaders who share their experiences on professionalising the family firm and the importance of family values.

Our case studies

Writing down the ‘unwritten rules’: Professionalisation in Malaysia

The Malaysian conglomerate AZRB is a good example of many of the themes brought out in this year’s survey. The company was founded in 1982 by a strong and visionary entrepreneur, and by 2010 had grown into a company with total assets amounting to $417m, trading in Asia and the Middle East, with interests in construction, infrastructure, plantation, Oil & Gas, and property development.

‘The importance of harmony’: Family values in Malaysia

Tohtonku Sdn Bhd is a major player in the personal care products sector in Malaysia, and stands out from many other family firms in the region by having made it successfully to its third generation.