Family businesses began with the emergence of the Kingdom of Saudi Arabia during the reign of King Abdulaziz bin Abdulrahman Al Saud (may God rest his soul) and did not exist before that, as the stability of governance and the emergence of state institutions helped to encourage merchants to establish their companies, and family businesses played a very important role in the economy The kingdom.
Family businesses in numbers:
98% of Gulf companies are family businesses.
250 billion riyals is the size of family business investments in Saudi Arabia alone.
22% – 30% share of family firms in the GDP.
45 family businesses are among the top 100 companies in Saudi Arabia, with revenues exceeding 120 billion riyals in 2013 and employing 200,000 people.
Definition of family business:
It is a sole proprietorship or a company that is wholly owned by one family, or the voting power in the Board of Directors is under the control of one family. Family businesses often start with a sole proprietorship and then evolve into various forms of companies.
Development:
The first generation (founder – family businesses start their life through an enterprising and ambitious person who establishes and manages the company and works on its expansion and spread, and his family may share his work with him in managing it)
The second generation (this stage begins when the founder dies or becomes incapacitated, or is forced to relinquish his administrative powers to the second person in the family, usually they are the children or the wife who replace the founder in the administration)
The third generation (manifestations of family disagreement over the management of the company start from the second generation, and these disputes develop into the third generation in which the severity of family problems increase the management of the company)