Family businesses are the foundation of the economies of most countries, and have a significant weight in the global economy. They are considered the most ubiquitous form of business organization worldwide because they contribute between 70% and 90% of the world's GDP. These data are not far from the Ecuadorian reality, where 90.8% of the country's companies are family-owned, in many cases led by the same founder or his family who continue to be present at the level of the shareholders' meeting, board of directors, and in some cases in the administration of the firm.
Business sustainability and the ability to endure over time that family businesses face are other elements that impact those who lead entrepreneurial families. V.U.C.A. (Volatile, Uncertain, Complex, Ambiguous) environments are now a thing of the past. Today, BANI or Q.A.N.I. (Breakable, Anxious, Non-Linear and Incomprehensible) environments are appearing. For which it is necessary to direct the efforts of companies towards innovation, entrepreneurship, research, development, renewal of new products, with new standards, especially those associated with exponential technologies.
In this sense, the UEES, through its Research Center (CIN), the Family Business Studies and Development Unit, the Family Business Institution of Spain, Banco del Pacífico and the Superintendence of Companies, Securities and Insurance are carrying out the study “Family Businesses in Spain".“Family Business in Ecuador”.
Among the main findings obtained in this section are that, according to data from the Super Intendencia de Compañías of 2018, family businesses represent 91% of the total formal private companies in the Ecuadorian economy. In addition, it is also revealed that the contribution of family businesses to the GVA of the Ecuadorian economy is approximately 40%. Likewise, family businesses contribute more than 90% in terms of the number of employees. This confirms the premise that family businesses are a fundamental pillar of a country's economy. At the sectoral level, the manufacturing industry is the one that has the highest contribution to the total GVA of the economy. However, the sector with the highest share of family businesses is commerce.
The study also allows taking a “Business Radiography” with a sample of 641 interviews within the 6 main cities of the country. The findings that stand out in this section show that in the Ecuadorian case, the majority (94.9%) of the family businesses interviewed are in the MSME sector, and with a trajectory of around 20 years. Only 34.9% of the business administrators were women; 25.9% had between one and five years in the position and 76.8% were part of the family that owned the business. Most of the family businesses only have conventional governing bodies: Shareholders' Meeting (97.3%), Board of Directors (55.9%) and Management Team (37.9%); while only 22.2% and 12%, respectively, have a Family Council and Family Assembly. Regarding family rules and protocols, 12.9% of companies have this document and 87.1% do not have it; of the latter group, 54.6% do not have a family protocol because they do not consider it necessary. Regarding succession, 85% do not have a written succession plan, only 9.4% have such a document.
The majority (84.7%) agree that it is favorable to be characterized as a family business, pointing out trust among family members, autonomy in decision making and the ease of reaching agreements as the main reasons.
Family businesses in Ecuador deserve special treatment, as they have particular conflicts and management systems that go beyond the financial dimension of a business. Therefore, analyzing and modeling non-financial behavior, such as the socioemotional wealth of the owner families, which according to the literature review and the study data are very relevant factors that drive the family business.
César Espinoza, Director of the Master's in Business.
