Industrial Family Businesses in Germany—Situation and Future

Abstract

Family businesses play an outstanding role in the German economy. Even in the manufacturing sector—seemingly dominated by large, multinational companies—90,431 out of 107,094 companies are family owned and led by a member of the owner family. In 2001, the authors, in a study conducted on behalf of the Federation of German Industry (BDI e.V.), and Ernst & Young carried out an in-depth survey of the structural qualities, strategic activities, and competitive strengths and weaknesses of family businesses in the manufacturing sector. The data of the survey were generated by a postal survey and cover approximately 1,000 respondents. The major findings are as follows: Although family members make the decisions in family enterprises, a wide range of experts from within or without the enterprise are consulted in the run up to crucial decisions. Between 1998 and 2000, turnover and employment were extremely favorable in family-owned manufacturing companies. Although manufacturing family businesses have a rather small number of products and customers due to their high degree of specialization, they export their products worldwide. Increasingly, the enterprises are intensifying their service orientation and entering into cooperative relations with other enterprises, even in sensitive strategic areas like R&D. This leads to the conclusion that despite the continuing high ranking of values such as independence and keeping the enterprise under the influence of the family, enterprises are open for cooperative activities within and without the firm.