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Aug 19 2018

Generational change & family businesses

I had a chance to visit Italy recently. Travelling through the beautiful landscapes of Tuscany we were visiting businesses and universities as part of a program focused on family business. The program was organised by an association of small and medium-sized enterprises and crafts which we are partnering with, and it was a great chance to compare the situation of family businesses in Italy and Czech Republic.

Is there any difference between the current situation of small-to-medium family owned businesses in Italy, with its long tradition of entrepreneurship, compared to Czech companies?

Compared to Italy, the Czech tradition of family business is relatively young. In the Czech Republic, we saw a nearly 40 year gap after World War II. At that time, nationalization was thought to be the best recipe for managing of almost any type of business. After the Velvet Revolution in 1989, key skills and competencies to run a family business was often missing for one or even two generations already. Even more significantly, that was 40 years period often broke the chain of sharing values, the most delicate part of heritage being normally passed on from one generation to another. Values, transferred on the younger generation not via trainings, schools etc. but through daily sharing stories at home, around the dinner table, visiting parents at their office or while participating in the daily life of the family business. As a consequence of this, many dreamed about "the good old days", 40 or more years ago, when all seemed perfect, compared to starting or restarting the business in the 1990’s. However, by that time, the world had changed in many significant ways so what many dreamed about was not the reality...

This may be one of the reasons why the shift to the 2nd generation, the most common case in the family business in the present, is a bit more difficult in our case.

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