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Eduvest – Journal of Universal Studies Volume 3 Number 4, April, 2023 p- ISSN 2775-3735-
e-ISSN 2775-3727 |
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STRATEGIC FACTORS AND BUSINESS
ENVIRONMENT POTENTIAL CAUSES OF NON-SUSTAINABILITY OF FAMILY BUSINESS IN
SEMARANG AND THE SURROUNDING |
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Arie Sulistiono,
Budi Widianarko, Berta Bekti Retnowati Universitas Soegijapranata Katolik, Indonesia |
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ABSTRACT |
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In order to fulfill
the goals and strategic objectives of the company that was founded, every
company or corporation is expected to have sustainability in its business,
including family companies which are the largest part of the ranks of
companies in general. The biggest part of the line of companies because in
general companies generally start from family businesses. This research is
part of the main research dissertation that aims to
examine the Construction of a Theory-Based Family Company Sustainability
Model which researchers are currently completing. The theory of Corporate
Sustainability is one of the filters and at the same time an inspiration for
companies to survive or not on their way. This study uses
qualitative research methods to reveal facts and realities about family
businesses. With the process of collecting data systematically, validating
data by triangulation, data processing to concluding research data based on
the relationship between the propositions revealed. The results of this study
will present some of the conclusions from the main research based on accurate
and relevant data to answer the question of what strategic factors and what
business environment factors cause a family business to become unsustainable.
So that the research findings become a recommendation on how to anticipate
and plan a family business to be more lasting and sustainable. |
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KEYWORDS |
family business; strategic
factors; business environment |
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This work is licensed under a Creative
Commons Attribution-ShareAlike 4.0 International |
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INTRODUCTION
In the private sector, many companies are engaged in
various types of business, both products and services. Of all the existing
private companies, the role of the family business is no less important in
contributing to the growth of the national economy (Wahjono, 2011).
Every company or corporation is expected to have
sustainability in its business, including family companies which are the largest
part of the ranks of companies in general (Susanti & Wibisono, 2018). The theory of corporate
sustainability is one of the filters and at the same time an inspiration for
companies to survive or not on their way (Tangke & Habbe, 2017).
World history records a long-lived family business,
namely the Congo Gumi Company in Japan, which spanned 14 centuries and only
ended in 2006 (Resmi et al., 2022). The longevity of this family
business company has involved, 40 generations of leadership of the
organization. In discussions with IFC recently it was revealed that the average
age of a family business which could reach hundreds of years later shrank to 47
years and currently averages only 17 years. This shows that family businesses
are not surviving for a long time and are unable to do better regeneration.
Survey data from PwC (2014) and BPS (2017) reveal more
or less the same conditions, namely more than 90% of companies in Indonesia
have the status of a family business, and 82.5% more of GDP in Indonesia is
contributed by these circles. Regarding family business, business continuity in
the regeneration process of family business leadership is a strategic issue
because many phenomena provide evidence that weak regeneration in family
businesses often kills businesses that have been started, previous research
data shows less than 5% of so many family businesses survive to the next
generation fourth (PwC Survey on
Family Business, 2014).
From the data stated above, after tracing, it turns
out that there are various reasons for the unsustainability of a family
company, including: the phenomenon of companies that are ignorant of environmental
sustainability which results in the closing of the business activities of the
company. Apart from that, news often spreads that there are unsustainable
business processes among family businesses, due to weaknesses in the competence
of the next generation, miss management, which end in business closures or the
company being sold to other investors.
In-depth understanding of the
concept of family business sustainability is also still in the gray area. Some
understand the concept of a family company as a company founded by the will of
a family, both capital and management, which are not completely separated by
family and relatives and continued by lineage (Chua et al., 1999; Suwarno & Harianti, 2022). A family company is seen as the ownership of the
whole or part of the capital owned by the family even though the manager or
management is handled by professionals who are not family (Donckels & Fröhlich, 1991; Gallo & Sveen,
1991; Leach & Bogod, 1999; Schulze et al., 2001) or someone who defines the notion of the most
important mixture of policy and management influences more or less by the
family and their descendants joining the management of professional management (Carsrud, 1994; Poza, 2013) this affects the attitudes and decisions of
managers of family companies in determining the facts and conditions and their
conclusions for the sustainability of the company as a family company.
The research phenomena found in this study will be
examined more deeply in relation to the theory of corporate sustainability
where the sustainability of a corporation is determined by its economic
capability, ability to protect the environment and the ability to increase
social interaction with the environment where the company is located.
The novelty that the researcher proposes is a research
using qualitative research methods to explore facts and strategic data
resulting from research, which reveal facts about the sustainability and
unsustainability of a family company.
At the same time, the novelty that the researcher
proposes as the object of study and analysis is small and medium scale
companies that have great potential but are rarely disclosed to the surface, in
contrast to other research trends which reveal the model of large companies and
are very well known in the public. So that this research will be able to become
an alternative model of the reality of the journey of a family company and a
role model for the struggle for sustainability in the long term.
Understanding the recent situation of family firms,
this research is also urgent and very reasonable to do based on the background
of thinking that reveals the condition of family firms is increasingly apprehensive
where fewer and fewer family firms survive in the regeneration process and the
average age of family firms is getting shorter. . Initially, the age of the
company was hundreds of years, some even thousands of years, down to around
40–50 years and recently it is suspected that the average age of a family
company is up to 17 years, so this research is very important to do in order to
find the formulation and construction model sustainability of family companies
that can be implemented in many related family companies.
And in actual conditions this research seeks to
uncover facts and realities that exist in family companies, so that they become
references and guiding methods in carrying out the process of regeneration and
succession of leadership in family companies. Because of its nature that seeks
information from business actors who fall into this special category, this
research is a phenomenological research/revealing phenomena, because it departs
from cases experienced by business actors in particular, so it is also included
in case study research.
Based
on a study of the journals and literature that became the reference for this
research, it turns out that there is no comprehensive research result on the
family company sustainability model based on the theory approach of Corporate
Sustainability (Svoboda, 2019).
Previous
studies used more of a management approach and psychological aspects, including
discussing: leadership styles, preparation and planning for the transfer of
leadership in business families, and family management strategies. Meanwhile,
research that fully discusses Family Business Sustainability within the
framework of Corporate Sustainability theory still needs attention to be
researched and studied (Handoyo, 2021).
Referring to the concept of thinking from his main
research on the Construction of a Family Business Sustainability Model based on
the theory of corporate sustainability, this research was conducted to achieve
the following objectives:
1)
This research was conducted with the aim
of identifying and analyzing key strategic factors in the sustainability of
family businesses.
2)
This research was conducted to identify
and analyze key perceptions and strategies among business people, both from the
previous generation and the successor/next generation in carrying out the
leadership regeneration process in the family business and its orientation
towards business and environmental sustainability.
3)
This research was conducted to identify
and carry out in-depth analysis so that it is hoped that several things can be
found and formulated regarding:
a)
Fundamental issues of regeneration in the family
business.
b)
Constraint factors and patterns that
hinder the regeneration process in family businesses.
c)
Factors that drive the effectiveness of
the sustainability of the family business regeneration process.
d)
Orientation Concern for Sustainable
Environment as a fundamental reason for the need for sustainable business
leadership regeneration.
4)
Moreover, in the
course of the ongoing research, it turns out that the research obtained facts
and data that are obstacles to the sustainability of a family company.
5)
Uncover various
strategic factors and business environment that make family companies
unsustainable / Non-sustainable.
Moreover, based on the phenomenon above the purpose of
study is to examine the Construction of a Theory-Based Family Company
Sustainabil-ity Model which researchers are currently completing
RESEARCH
METHOD
Research design
This research was conducted using a
qualitative research method approach (Creswell & Creswell, 2017). Researchers conducted
exploratory and in-depth interviews from the experiences of family business actors
in various industrial fields.
Research Participants
The participants of this study are
business people from various industries who manage family companies. The
location of its business activities is in the city of Semarang and its
surroundings, with a business life of 20 years or more. In conducting research
on company profiles and models, the categories of companies with small, medium
scale, and large/national scale family companies were determined.
As informants in this study, there
were 10 informants from 5 companies. The research informants clearly know the
ins and outs of their respective family companies.
Data and Data Sources
The research data is in the form of
primary and secondary data obtained from the results of research and interviews
concerning aspects directly related to the research problem that has been
formulated. In addition to primary data, secondary data is supporting data in
the form of records owned by family company actors that are relevant to
research needs which can be in the form of photo documentation, drawings,
diagrams, administrative documents, other required company documents.
Data collection technique
To obtain optimal and comprehensive
data, systematic data collection techniques and methods are needed. The data collection
techniques and methods used are: (1) Observation (2) Online and offline
interviews (according to the situation and conditions) by recording, recording
conversations and making transcripts of conversations. (3) In-depth interviews
(4) Archive review and review from the data available and needed (5) Focus
Group Discussion with related parties who can complete the information needed
for this research. (6) The last stage of data collection using a questionnaire.
Research Data Validity Test
The data that has been collected
using the research data collection methods and techniques that have been
determined need to be confirmed for its validity. This means that the data is
confirmed to be correct and in accordance with the actual research principles. The
process of ascertaining the truth or validity is carried out by means of
triangulation techniques.About this Triangulation method Rahardjo (2010) states that: One of the
important questions and often arises from researchers who are conducting
research is the problem of triangulation. Many people still don't understand
the meaning and purpose of postulation in research, especially qualitative
research.
RESULT
AND DISCUSSION
This research was conducted on 5 (Five) Family
Business Models, which consist of small to large scale family companies. These
companies can be grouped into 3 business groups according to business scale,
namely: (1) small scale family companies, (2) medium scale family companies and
(3) large / national scale family companies, with various backgrounds in the
type of business.
Table 1. Family Business Models Analysis
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NO |
Study
Aspect |
CV “V” |
PT
“W” |
RM
"X" |
BREADY
“Y” |
PT.
"Z" FACTORY |
Notes
/ Conclusion |
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Company Code |
V |
W |
X |
Y |
Z |
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1 |
General
Company Profile |
Family
company established to serve the needs of customers for the needs of
bouquets, decorative flowers and flowers for worship, parties and other
ceremonial events |
A family company that produces seasoning or food seasoning / soy sauce
type dishes from black soybeans |
Family
companies in the food industry sector, restaurants serving a limited segment
because food ingredients are made from non-halal frog meat (which most
consumers still believe in non-halal food) |
A family
company which is a bakery, cake & bakery which is known for its unique
menu with limited segments considering that the food contains elements of
pork. |
A family company in the national and large-scale plastic industry that
meets the needs of consumers, both individuals and businesses for the benefit
of household fittings and packaging needs |
Family
companies that were founded by the pioneers of this business in Semarang and
its surroundings have a long enough age of at least 38 years and some are
even more than a hundred years old. So that it exceeds the results of
research conducted by the International Finance Corporation - World Bank
which is only 17 years old. |
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2 |
Company
Founder |
MR & MRS U |
Mrs. KR / OHH |
MRS P |
Mrs. FDS |
Mr. SS & SS |
The
average founder has a passion in the business and some are still alive and
some are gone. His successor confirmed |
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3 |
Established Year /Age Of The Company |
Th. 1971 / 52 Years |
Th. 1930 / 93 Years |
Th. 1901 / 122 Years |
Th 1920 /103 Years |
Th. 1985 / 38 Years |
The age of
the company is between 38-122 years |
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4 |
The Mood
Of Kebatinan Business Establishment |
Initially,
the founder saw an opportunity to serve the community in the decoration and
flower arrangement business. This activity was realized as the responsibility
of the head of the family to get a real income. Then it developed in such a
way as to find sources of goods to be traded and resold from the results of
wholesale-trade activities. Being a store that provides all the needs of
home, office or place of worship / church / temple decoration. |
Starting from an early family business around 1930, producing soy sauce
seasoning recipes that are managed with a distinctive and delicious taste. In
1960 this company stagnated and stopped and was revived by its successor Mrs.
KR using a new label and brand. Currently this family company is managed by 4
generations who continue this family business full of challenges with intense
competition |
This individual business, which is managed and
included in the family business category, is a typical restaurant that serves
Swie kee food menus, spiced frog, spiced frog eggs, etc. which are liked by
the public. Even though there are many views of this food as non-halal, it is
still very much hoped that this menu will be present among lovers. Initiated
since 1901 this business has been running to the 5th generation which is held
by Mrs. E/CP |
Serving the needs of the Semarang city market,
especially Bread / Cake food that has a classic taste and is packaged with
modern flavors, was the beginning of the establishment of this bakery.
Through a sustainable regeneration process. This bakery always serves general
consumers as well as specifically serves consumers who want bread filled with
ham / non-halal - pork. |
This business began with the desire to serve the
community's needs for plastic packaging materials or other product/service
support using modern technology. As a family company, the founders are 2
brothers, but in their journey they do not require
the company to be inherited by their descendants to continue the business.
Many even entrust the company's development to professional staff |
The
establishment of many family companies begins with an awareness of the need
to: make a living, will continue the business, ·
Maintaining the brand / brand
image / product or family business.. ·
Provide solutions to customer
needs problems. ·
Prestige
to maintain and develop modern industrial businesses. ·
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5 |
Company
Vision |
Yes
but not written; One stop services for the needs of flowers
and decorations for households, agencies, houses of worship and others. |
There is no written vision |
There is no written vision |
Become a center for classic souvenirs that are in demand by customers
all the time with a complete range of products. (Unwritten vision and mission) |
To become the best plastic producer by continuously improving product
quality and company performance to get the best performance in responding to
the challenges of domestic and global market competition. (there is a written and socialized vision) |
Vision is
something that is important for the survival of the family company. A vision
that is suggestive and able to arouse the interest of the next generation to
continue the business is very important. |
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6 |
Company
Mission |
There is no written and socialized mission |
There is no written and socialized mission |
There is no written and socialized mission |
There is no written and socialized mission |
Implementing the best management systems and production processes
based on work safety and environmental impact control |
The
Company's mission is very important to become direction and guidance in
running a business. The mission shows what the company will do for its internal and
external customers |
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7 |
Main
Products / Services Produced Vs Product Price, Operational Costs And Business
Margins |
Products Imitation flower bouquets, flower boards, flower pots and imitation
flowers, hand flowers / hand buckets, and others to order. Margins are
getting thinner due to competition and operational costs. Prices are unable
to keep up with current growth due to competition for imported goods which
may be cheaper and have more alternatives. Including online services are
increasingly mushrooming. |
Soy sauce products for cooking and food flavoring are made from black
soybeans. The natural resources associated with black soybeans are
increasingly limited – if imports are more expensive, the daily production
volume is not large, around 500 packaged bottles per day with a retail
product price of Rp. 20,000 – 35,000 with increasing operational costs and
industry competitors with much larger production capacities. |
Products in the form of restaurant food menus: Frog Swieke, Frog Pepes
and Frog Egg Pepes, Butter Fried Frog and Flour Fried Frog. Price per portion
Rp. 25.000-35-000, Operational costs, employee salaries, local taxes, and
menu material resources are increasingly limited even though now supplies
have been made from farms. |
The products produced are in the form of cakes and breads both in the
HALAL category and products containing pork. Which segment is increasingly
limited and its customers are also very limited to loyal customers and have
classic tastes. Operational / production costs are getting higher, the culinary
competition for Cake & Bakery is getting very tight both in terms of
menu, price - service and service |
The products produced are in the
form of plastic packaging of various sizes, plastic trash containers, Rain
Coats, environmentally friendly plastic packaging. Mass-produced and dominate
the local market, national and regional. Prices are competitive and still
prospectively profitable due to market forces. |
The product
life cycle of the various products produced will determine how long or short
the age of a family company is and all of that depends on how far the product
can be renewed by innovation or not. Good margins should be a requirement for the sustainability of this
company. The breadth of customer segmentation will support further business
challenges and development. |
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8 |
Suspension / Family Factor – Management Of
Family Company |
The children and close relatives of the managers of
this company currently have no interest or passion for this business. Children (2 people) stated that they did not have
the capacity to manage business complexity and business results / margins
that were not large. Difficult to hold people / employees to survive –
because income is limited. In fact, the family tends to suggest selling the
company when the time comes. |
Until now it is managed by the 3rd / 4th generation.
There is no succession plan for the next generation. |
Until now, managers are still limited to the 5th generation
(CP/E) who happen to be unmarried and have no children. Closest relatives
seem to have no passion to continue and develop the business. In fact, the
branch in Semarang is getting smaller and the restaurant in Purwodadi is
still / there are no plans to expand. |
This business manager is in the 3rd generation and has not been
thought of in the next generation. The information that is available is that
the development of the Roti Shop branch in Jakarta is not developing and
tends to stagnate, while the one in Semarang is also experiencing conditions
that are not much different. Both in terms of area and arrangement of
existing stores, it tends to stagnate, lacking inonation. Meanwhile, the
competitive conditions for the Cake & Bakery business are getting tighter
and growing like mushrooms in the rainy season. |
The current owner and
founder Mr. SS & Mr. SS gave a trial period to his children and it turned
out that there was no chemistry with the company's current professional
management. So the decision not to force the
regeneration of business leadership in the company does not have to fall on
the children / descendants / close relatives. The commitment made by the
company must continue to grow and the owner / family is maintained in capital
ownership. |
The next generation of
family companies plays a very important and strategic role for the
sustainability efforts of a family business. Successors who are direct
descendants or close relatives of the founders/owners are expected to have
more or less the same business passion, are interested in developing, are
willing to be trained and cadres and have the courage to start taking on big
responsibilities in the family company. |
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9 |
HR / Labor / Expert Factors To Produce
Prodict / Family Company Services |
The number of personnel in
the production process of this business is currently 5-13 people. All of them
have special expertise in the creation and arrangement of flowers and product
management. This is complained of by prospective successors who find it
difficult to get new staff and those that can be maintained. |
The number of personnel involved in production
activities is around 10-12 people. There is no special expertise, only manual
labor to process the storage and processing of black soybeans, brown sugar
and others. The recipe holder is currently the head of the company who is a
direct descendant of the founder of the original business. |
The number of personnel
managing this restaurant is around: 7 people including the owner. Recipes are controlled by
the owner and daily operations are entrusted to restaurant employees. |
Managers at the head office
are entrusted to 2 managers who oversee 6-8 store employees and 20-25
production employees. Recipes are controlled by
trusted professionals and are not open in nature. |
HR consists of professional staff and skilled
factory workers. Its composition is Manager & professional staff of 50
people and other skilled production workers of approximately 1000 people. The role of managers and professional staff is
strategic and trusted by the owner. |
The HR factor in one company
differs from one another at a strategic level. However, it is acknowledged or
not that human resources for the sustainability of the company are very
influential both in terms of the contribution and development of the company
and on the other hand as a cost burden for the company which will affect the
level of profits/margins generated and achieved by the company. |
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10 |
Legality
& Licensing Constraints Factors Which Are Business Requirements |
Business licenses still use the old licensing pattern and are
currently still adjusting to the NIB pattern and licensing administration
which are increasingly complicated and all online. The company is subject to waste management rules and free parking road
access. Making it difficult to serve customers who have to come to the store.
The shop facility located in the city center has the consequence of bearing a
greater burden of PBB taxes which must be remitted to the government. Local
tax collections are also expanding, resulting in a burden on the company's
operational costs. Including wages of workers who already have standards that
must be met. |
Licensing As an individual company and towards licensing renewal with
the NIB system, the scope of business is MSME. It is necessary to pay attention to the control of waste from the
production process, because most MSME industries in this field pollute the
river environment or cause a foul odor from the water flow around the
business environment. This waste management commitment is a strong demand and
has the consequence of procuring a waste installation with a large investment
value. |
Conventionally, restaurants have restaurant licenses. Currently
towards the renewal of NIB permits related to Halal certification,
environmental management and other permits. The burden of legal costs is getting bigger related to PBB taxes which
are located on major roads. Parking permits and City/District Minimum Wage
Provisions for the RM worker concerned. |
This bakery conventionally has an IRT permit. Currently it is heading
to renewal of NIB permits related to IRT certificates, distribution permits /
if large volumes, Halal certification, environmental management and other
licenses. The burden of legal costs is getting bigger related to PBB taxes which
are located on major roads. Parking permits and City/District Minimum Wage
Provisions for workers in the bakery concerned. |
This modern plastic factory
already has permits in accordance with its scope starting from NIB, IMB, Land
Certificates, SLF, UKL - UPL / AMDAL Permits, Industrial Permits, Trade, DLH
and other permits that are included in the category of large companies. In general there are no major problems with the required
permits. Commitment to environmental
management will be closely monitored by the relevant agency, namely the
Environmental Service. A large number of human
resources will be supervised by the UMK provisions by the Department of
Labor. Industry and trade reports
and taxation both regional and central are routine requirements that must be
fulfilled. |
Legality – company licensing is an important requirement for the
company's ongoing operations. So as not to interfere with internal and
external interests. However, it will become a big obstacle and problem if the operational
costs and legality are no longer balanced or meet the conditions for business
income. The heavy burden of business due to legality and charges, taxes and
labor costs becomes a problem if the business income and the price of the
product produced are not comparable to each other. |
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11 |
Commitment To Management Of Family Company
Business Environment |
Quite heavy, related to the waste load, the burden of business
environmental costs. |
Heavy enough to keep industrial waste from impacting the surroundings. |
It's not too hard for waste & solid waste management, you just
need to pay attention to the impact on the surroundings. |
It's tough enough to keep industrial waste from impacting the
surroundings, especially since the business is in the middle of the city,
major roads and densely built areas. |
It's heavy enough to keep the plastic industry waste
from impacting the surroundings, especially since the business is in the
middle of the city, major roads and densely built areas. There must be a good
waste processing installation. |
Every business operation must be committed to managing waste / garbage
from the results of the production process. The amount of the commitment fee
to treat waste will depend on the volume of waste, the type of waste, the
risk of odor and the danger posed by the waste and the cost of installing the
waste that must be invested and its maintenance. |
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12 |
Impact Of The Business Environment |
Present but not physically significant. |
There is a significant impact, especially garbage, odor and contamination
of the water flow which has an impact on infiltration wells if not treated
properly. |
There is but it is not significant if solid waste in the form of
leftover food & drinks is properly processed |
There is a significant impact, especially garbage, odor and
contamination of the water flow which has an impact on infiltration wells if
not treated properly. |
There is a significant impact on the flow of water
from industry to public waterways, solid waste, factory smoke and other air
pollution which if not managed properly will have a negative impact on the
environment |
The sustainability of a business is also determined by the impact of
the business on the surrounding environment. The positive impact will support
business continuity and vice versa the negative impact will accelerate the
discontinuance of the business being carried out/run by the company |
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13 |
Assumption
Of The Current Owner About The Continuity Of The Family Company |
Taking into account the situation of business conditions, the attractiveness
of existing products / services, the situation of the place of business, the
burden of fees and taxes, the provisions on wages for workers and other
factors as well as the existing contribution margin, supported by the
decision of the direct descendants of the current manager not interested in
this business and it is considered complicated and has small margins, so it
seems that the current owner listens more to the input of other relatives /
relatives to sell the company's assets and not continue in the long term. |
Taking into account the business conditions that are still traditional and the volume of
small businesses, the business is run in a routine manner, by serving a
market segment that is limited to existing customers and their descendants
who like the taste of existing products. Survive with human resources and family elements in which the business
is still running. |
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From the owners and founders of the company choosing a commitment to
continue to develop the business whether there are children involved or not.
Even an apprentice test has been carried out on their offspring / children
and if it is proven that there is no chemistry with the professional staff,
they are asked to be outside the company by opening another company whose scope
revolves around the same industry and mutual support. Professionals are trusted to matters that are strategic in nature. |
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14 |
Conclusion Of Situation Conditions Of Factors
Affecting The Sustainability Of A Family Company |
Family Business Discontinued Assets and Business sold. Settlement of business done. |
Potential Family Companies do not continue with difficult situations
and conditions in terms of Products, Markets and Business Environment |
Potential Family Companies do not continue with difficult situations
and conditions in terms of No Descendants who continue the RM business,
Limited Product Raw Materials, Provisions of the Halal Product Law, and
Business Environment |
Potential Family Companies do not continue with difficult situations
and conditions in terms of business development, business competition,
Environmental Commitment, Halal Product Law Provisions, and Legality of
Retribution and Business Environment |
Family business and continuing business from the ownership side.
Business capital is still owned by the family and management is carried out
by trusted people or professionals. Or choose the FOE family company pattern |
Basically, whether or not a family company continues is divided into
categories: 1. Capital & Management Business management is owned and
controlled by a family or known as FBE: Family Business Enterprise 2. The family controls most or all of the capital and releases
management to professionals. Or called FOE: Family Owned Enterprise 3. If the company changes capital ownership and management and there
is a sale and purchase of assets, the Family Business will stop or be
unsustainable. |
CONCLUSION
Vision and
mission of the company, this
variable is very important in determining the direction and goals for a
company, not only for family companies. Because the company's vision and
mission are actually the spirit of the company's life, from where and where
will this family company organization be brought to reach its goals.Visions and missions that are not easy to achieve and
become ongoing challenges are a means of supporting the sustainability of
family companies.
Aspects of the spiritual atmosphere of the
establishment of a family company, this
aspect is urgently needed by corporate sustainability successors to become
important and inspiring values for the continuation of the family business.
Because actually this mystical atmosphere is a valuable value and the basis of
the family business philosophy. This is the same as the history of the beginning
of the business that was intended and the business began to be executed by the
predecessors.
Factors/ Variables Inhibiting
the Sustainability of Family Companies, these factors potentially will
abort the success of family business sustainability. This can be sourced
internally or externally. Internal factors include the unwillingness to
regenerate offspring/ relatives/ family.
The disinterest of the pioneering and successor generations who object to
continuing the business or the unavailability of resources from within the
company which does not allow the continuation of the family business. While
External Factors can come from the business environment, resource support from
the environment, the level of acceptance of the local community, government regulations
that hinder and do not want business to continue due to environmental or public
interests. as well as market aspects that are no longer interested in the
products and or services produced by the company. As well as the economic value
of products that are able or not to provide good margins and profits for
businesses to finance further business operations as well as provide benefits
to shareholders/ owners of capital.
Aspects of Attention and Orientation to the Business
Environment, this factor/ proposition
refers to the family company's awareness and understanding of its business
position in the midst of its business environment. Because businesses cannot
stand alone and of course will depend on each other and the environment,
understanding and knowing who is included in the category that is their
environment and paying attention to and maintaining the environment will
provide positive feedback for the company in continuing its business operations
and sustainability interests.
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