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New MBA Programs Help Keep Business In The Family

For many companies across the globe, demand for business education has surged. MBA programs are helping entrepreneurs keep business in the family.

By  Seb Murray

Mon Jul 21 2014

Jonathan Seeyave’s late grandfather started his family's business in 1952. Seeyave Senior began by selling ice-cream, before moving into frozen foods on a large scale and rebranding the company as Happy World Group.

Today, the Mauritius-based business is a sprawling empire with a retail arm, a commercial property business, as well as shipping services and document managing services arms.

Before Jonathan joined the latter, it wasn't assumed that he would enter the family firm. “I worked in Japan at the time and I hadn’t been in Mauritius for a large part of my life; I left when I was ten to study in England,” he says.

Until today. “I wanted to discover the family business and get in touch with my family again,” he says. So Jonathan enrolled on the Global MBA program at ESSEC Business School in France. “It gives you an all-round set of skills for any business and really does develop those skills,” he says. “You can take it back to the family firm and see how it can develop or enhance the business.”

For many companies across the globe, demand for business education has surged as large family companies face succession challenges.

Family-owned firms make up 80% of all business enterprises in the United States and 75% of all businesses in Europe, according to the Family Firm Institute, an association for professionals serving the family enterprise field.

They also make up 80% of all companies in the Gulf and employ the majority of the region’s workforce.

As conglomerates move on to the third and fourth generations, family rivalries can set in as some business units outperform others. A business school program such as an MBA can help smooth out structural transition, and many MBA students are set to inherit business empires.

“Before the MBA I was working at the family business and… I was always in the background,” says Adnan Binmahfooz, whose family firm which sells staple foods in the Middle East, Salem Abdullah Binmahfooz Est, is seemingly in need of a manager.

“I needed to participate with senior-level executives and communicate ideas very clearly with buyers and clients in a more linear way,” says Adnan, who graduated from MIP’s Design and Luxury Management program last year. “The MBA helped my career exponentially.”

Future owners like Adnan are fuelling a demand among business schools for programs that can cater for their specific areas of need, such as asset management and leadership.

Swiss-based business school IMD plans to launch The Next Generation in November. The program, for younger family business executives, will have dual modules in Lausanne, Switzerland, and at the school’s campus in Singapore.

Western schools have been tapping into a rising demand for part-time degrees which family managers can study while running their firm’s operations.

These business education courses created for family executives were mostly only available to larger corporations. Several big-name brands including Mars Inc, the confectionary brand, and Enterprise Rent-A-Car are owned by families. But a new trend for offering courses to SMEs has emerged.

INSEAD of France established an Abu Dhabi campus in 2012, and its five-day Family Enterprise course focuses on governance and effectiveness.

Other European schools have sought to launch campuses in the Middle East, where links to family businesses remain strong. London’s Cass Business School opened a centre in Dubai in 2007. The school teaches succession planning as part of its corporate governance course in Dubai.

The trend is emerging further west. United States-based Columbia Business School rolled out a course on family enterprises and wealth in 2012. Enrolment has since doubled to 47 students last year.

Carolina's Kenan-Flagler Business School has two courses on family business, and Cornell University’s Johnson School plans to open a family business program, which will offer a speaker series for students and executives. Chicago's Quinlan School of Business has two classes for business owners and employees, capped at 12 people per 18-month class.

Leadership is one of the biggest draws for family business managers, says Santiago Hoyos, a student at ESSEC who is vice-president of his family’s manufacturing services company.

“I had a sense that I needed to acquire more skills in order to optimize the opportunities of the company,” he adds. “I wanted to learn how to manage people and incentivize them.”

Santiago’s grandfather founded their company, San Lorenzo S.A, about 40 years ago. They began in the automotive sector but the production has shifted to new products in the gardening industry as well as small engines which are used in lawnmowers.

He joined the Colombia-based firm in 2009 and rose through the ranks before joining business school last year.

“We have an established way of doing things at the company and I wanted to learn what the world is shifting to, and bring this knowledge back to propel the company to the next stage,” says Santiago. “ESSEC has given me that.”