For some, the idea of being in business with family members is nightmarish. History shows numerous examples of feuding families that have caused internal mayhem and cost an organisation far more than money. Yet, in other cases, the ties of family have proven to provide a strong bond that can withstand recessions, industry decline and even war. World Finance reviews those that have done it best, according to the 2015 Global Family Business Index, a list compiled by the Centre for Family Business at the University of St Gallen, and EY’s Global Family Business Centre of Excellence.
History shows numerous examples of feuding families that have caused internal mayhem and cost an organisation far more than money
1. Wal-Mart Stores
Sam Walton established Wal-Mart in July 1962 with the first store in the US state of Arkansas. Walton transformed the retail industry with a strategy of offering lower prices, while still maintaining a good service – something that his competitors at the time thought would never work. Yet, work it did and by the 1970s, Wal-Mart had become a public listed company and went nationwide. The chain has since grown to epitomise the face of retail with 2,200,000 employees worldwide and an annual revenue of $476.3bn. The Walton family owns 50 percent of the company’s shares.
In 1931, a young mechanic named Ferdinand Porsche founded an automobile design company called Porsche; with a flair for design, his earliest models were soon successful. A turning point then came when the demand for an affordable car in financially stricken Germany burgeoned and Porsche was appointed by Adolf Hitler to design the ‘volks wagen’ – the ‘people’s car’. The company Volkswagen was created in 1937 and in the decades that have followed, it has expanded to become the biggest car manufacturer in the world with Bentley, Bugatti, Lamborghini, Audi, SEAT and Škoda also under its umbrella. Today, Volkswagen earns $261.6bn each year and has 572,800 employees worldwide. The Porsche family has a shareholding of 32.2 percent of the public listed company.
3. Berkshire Hathaway
Berkshire Hathaway, a multinational holding company headquartered in Nebraska, has roots stretching back to the 1880s as Berkshire Fine Spinning Associates. In 1955, the textile company merged with Hathaway Manufacturing Company in what would eventually become the investment behemoth that we all know today. Following the general decline of the textile industry, incumbent CEO Warren Buffett began expanding into insurance and other investments in the 1960s. Today the company earns $182.2bn per annum and has 330,745 employees. With Buffet still firmly at the helm, Berkshire Hathaway now has stakes in hugely successful organisations, ranging from American Express, General Electric and Goldman Sachs to Kraft, Twentieth Century Fox and even Wal-Mart. The Buffet family currently owns 34.5 percent of the company’s shares.
Giovanni Agnelli co-founded the Fabbrica Italiana Automobili Torino (FIAT) in 1899 and then created Istituto Finanziario Italiano (IFI) in 1927 to draw together and manage his holdings in various companies. In 2008, a reorganisation of the Agnelli family’s holdings led to the merger of IFI and its partner company IFIL to create Exor. With 301,441 employees, a majority stake in Juventus FC, as well as large stakes in Fiat Chrysler Automobiles and CNH, among others, Exon is now the second biggest company in Italy. Exor earns $151.1bn every year; with the Agnelli family still holding 51.4 percent of the company’s publicly listed shares.
With 12 investors and 1000 shares, Henry Ford founded the Ford in 1903. Despite almost all of the $28,000 cash investment being spent by the time the first car was sold, the company began turning a profit within a matter of months. Thanks to its rapid expansion in North America, the first overseas branch was opened in France just five years later. Then in a pivotal moment in automobile history, in 1913, Henry Ford introduced the integrated moving assembly line to mass production. The company continued to expand rapidly and diversify its product portfolio throughout the years and today it makes $146.9bn a year and has around 181,000 employees around the globe. The Ford family owns 40 percent of the shareholding at present.