Thursday, July 31, 2014
After starting with almost nothing, successful entrepreneurs now run some of Taiwan’s largest companies. These firms have helped propel Taiwan’s rapid economic growth over the past decades, and are crucial to maintaining the island’s future.
Yet some analysts estimate that only one third of these family run companies, which account for up to 90% of the island’s business, have a succession plan. “In Taiwan, though, it’s still the emperor’s style of succession. No-one outside can tell what will happen—it’s the founder’s decision.”
It is a traditional Chinese approach for founders to divide the family firm up between their children however, this tradition has divided companies. Many Taiwanese companies have become so large that younger family members have been incapable of taking a leadership role. “Family businesses are definitely very important in Taiwan and across Asia because they control a lot of resources . . . And if they make the wrong decisions . . . the whole economy will suffer a lot.” Because many first generation entrepreneurs are workaholics, they have difficulty relinquishing their position as they want to make major decisions for their company. Consequently, their successor does not have the opportunity to handle the whole company.
See Cindy Sui, The Tricky Business of Succession Planning in Taiwan, BBC News, July 30, 2014.