The saying "Grandparents build it, parents expand it, grandchildren destroy it" haunts family businesses worldwide because generational transitions are never easy.
Some families successfully pass down their empires across centuries, yet many global brands lose control to outsiders due to bloodline conflicts, overlapping interests, and unclear family business regulations.
Lessons from these global companies’ successes and failures are highly relevant, revealing critical "make-or-break" points entrepreneurs must urgently study to find survival strategies.
The Stock Exchange of Thailand (SET) cites cases of well-known global brands that succeeded, including the world’s longest-running business, Japan’s Hoshi Ryokan hotel with over 1,300 years of heritage; major automakers Ford and Toyota; the Mars confectionery empire; and luxury brands like Hermès and Patek Philippe that have maintained tight family control.
These businesses demonstrate that a strong corporate structure enables companies to survive global crises for centuries.
On the other hand, failing companies include famous global brands such as Gucci, LVMH, The Wall Street Journal, Guinness, Barilla, and even Samsung. In the family business context, "failure" here does not mean bankruptcy or closure.
Rather, it refers to failing to pass the business to the next generation, resulting in loss of control, hostile takeovers, or destructive family disputes leading to collapse.
Professor Kitipong Urabeepathapong, Chairman of the Stock Exchange of Thailand, cited two case studies:
1. The Guinness beer brand from Ireland illustrates mistakes made by relinquishing control too quickly and allowing professional managers to run the business entirely without close family oversight. This proved "very dangerous" as the inherited business was eventually lost and taken over by Diageo, the world’s largest premium alcoholic beverage producer owning brands like Johnnie Walker and Smirnoff.
2. The Wall Street Journal, once owned by the Bancroft family, exemplifies "family conflict and a leader unwilling to let go." The patriarch, despite his advanced age, clung to the chairman position and refused to transfer power, causing fierce sibling rivalry and a fragile structure that eventually led to billionaire media mogul Rupert Murdoch acquiring the company.
The SET chairman pointed out that the downfall of these businesses stemmed from the same root causes: "lack of good corporate governance," unclear structures, absence of wills, and conflicts of interest—issues nearly identical to those faced by family businesses in Thailand.
Unveiling the “6C” Formula for Success in Thai Family Businesses
C1 - Corporate Governance Structure: implementing sound governance and family business rules through family constitutions, establishing holding companies, and transparent agreements, leading to effective management.
To break down this barrier, the Stock Exchange is pushing for legislation on "Dual-Class Shares," which act as a key allowing founders to raise capital for expansion while maintaining superior voting rights despite potentially reduced share quantity, thus preserving family influence over the company’s direction. If successfully implemented, this tool will remove major constraints, increase free float, and become a magnet attracting substantial foreign institutional investment into high-quality Thai stocks.
Moreover, if just 10% of Thailand’s over 100,000 family businesses restructure effectively and enter the stock market, the country would have 10,000 listed companies, translating into exponential growth and truly sustainable national economic prosperity.
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