Mamun Rashid
Looking at the caption, some of my readers may be smiling, since almost all the businesses in Bangladesh are either family-owned or family-managed or run like family businesses. Nothing wrong in this; even in the United States, a large number of the businesses are family-owned.
A friend teaching at a business school in the United States of America asked me- how did the family owned businesses evolved over time in Bangladesh? How many of them do truly believe in 'global best practices'? How many of them do follow the doctrine of 'right person for the right job'? How many of them are investing in their second generation? Do they share their successes with their employees or at least top performing employees? Do they have any succession plan? How is their internal governance? How many of them have gone public? And how many of them can boast of having proper information technology or financial management system?
I didn't have much of an answer. I was scratching my head and trying to have a 'run-down' of our family-run businesses. From Abul Bidi or now Abul Khair group in Chittagong, Sheikh Akijuddin's Akij group from Navaron, Jessore, or PHP group established by Sufi Mizanur Rahman, Mostafa Group or Elias brothers in Chittagong, City Group or Meghna Group in Dhaka, or even Square Group, Transcom Group, ACI group or Apex or Opex group; these are all examples of family-run businesses. Almost all of them have annual sales turnover in excess of Taka 20 billion or USD 250 million or above. How do they stand against family-run businesses in India or Indonesia? In fact, there is no comparison. Most of the businesses in Bangladesh are 'old fashioned', though may be quite profitable.
Though some of them command respectable share of the global 'supply chain', they are quite weak in internal governance. Many of them don't have any succession plan and are not aware of what businesses they should be in and what businesses they should avoid. Unlike India, most of their sons and daughters are either 'too pampered' or could not go nearer to a good college or university. They are even afraid of recruiting well educated 'secretaries' or many may not have anyone like this. Most of their senior executives are their relatives or close family persons.
They have many things in common. Most of them would either employ a retired civil servant or military person or a retired senior banker as their adviser but treat them as 'personal secretaries' or use them to get the best out of the regulators. I have seen many of them, though always crying for good people, don't have any single business graduate, other than their own relatives in their organisations. Though many of them are now putting up 'state of the art plants', their culture of embracing information technology is very poor. Most of them are dependent on borrowing from banks and other sources. Even if some of them are publicly listed, they run those as their 'pocket companies'; having a slur of `manipulation'. They don't raise money for expansion or share their successes with common people. Few of them literally take the common people for a 'ride' through the capital market route. Many of the family companies 'play around' in the capital market, but they never want to be listed. Most of them maintain two 'books of accounts' -- the audited one hardly shows any profit and the other one is 'in house' showing hefty profit. Banks here don't mind lending to them based on 'in house' financials. Another common thing is -- most of them are God-fearing and perform 'Hajj' or Umrah on a regular basis. Many of them though try to avoid paying taxes, but found to be quite regular in paying 'Zakat' (shariah way of sharing wealth with poor)
My friend asked me -- how are their sons and daughters doing? Most of their daughters would be married once grown up, enjoy the wealth made by husband or parents. Even the sons, though educated at home and abroad, living in the digital world, surprisingly share the vices of their parents -- avoid paying taxes, compromise with quality, shy of ensuring proper internal control and management practices. They were taught in the universities but they are found to be aggressive as their fathers or may be arrogant too. They can `smell' money more than their parents and won't hesitate to bribe right and left.
Most of the family business owners would have vast landed property beyond their living houses or flats; some of them would lead a simple life but their sons would drive latest Mercedes or BMW cars. Good part is, most of them are quite humble in nature and would like to share their earnings with any banker, government officials or as such anyone, if they are making money. Recent trend says, many of them would like to own a newspaper, television or at least an FM Radio station, in order to avoid quizzing from 'disciplining forces' during special times. There is a recent trend for them to own offshore properties. Some of their families even don't stay in the country. The trend also says, while many of them wanted to get their daughters married to a civil servant or an Army Captain or Major in the past, they now mostly look for businessmen. They may be semi-literate, but many of them own universities.
There are exceptions too. Some of them are well educated and have sent their children to very good colleges and universities abroad. They have returned and are now significantly contributing towards improvement of the business practices within the group as well as across the industry. However, the trend could be made a little healthier by accepting international best practices or ensuring proper governance.
(Mamun Rashid is a banker and economic
analyst.
E-mail:mrashid1961
@gmail.com)
