Growing the Arab Family Business (1): Hybrid Organizational Arrangements

Abstract

Purpose: In this research the classical Growth Models have been used to explore the chosen strategies of Family Businesses in Bahrain and GCC. Moreover, various models of Franchising, Product/Market development and diversification, have been tested as means of growth.

The purpose of this paper is to provide a perspective on family businesses that are operating business format franchising in Bahrain through examining their share in comparison with other family businesses who are involved in the industry of franchising in Bahrain. The research focuses on studying the management actions or aspects that have contributed to build the structure and governance of those family businesses. There are three main objectives of this paper:

1.  To detect justifications for the reasons that encourage franchisors to expand their operations through franchising agreements,
2. To recognize the extent of agreement of those family businesses on the obligations of the franchisor and franchisee.
3. To identify diversification options and other hybrid forms of growth in GCC.

 Unit of Analysis:The participating members are in all levels of the family business community. The research is focusing on Family business as perceived and declared from the principles matching our definitional assumption. The operational definition used in this research is that “family business is a business governed and/or managed with the intention to shape and pursue the vision of the business held by the dominant coalition controlled by family members of the same family or small number of families in a manner that is potentially sustainable across generations of family or families”

Methods: A deductive approach is used, to test theories and concepts of franchising and other hybrid modes. Additionally, a quantitative research methodology has been adopted for collecting the primary data; the data was collected through questionnaire which has been distributed on 24 family businesses operating in the industry of franchising, and has been analyzed statistically. The sample is mainly part of a population of 360 members of Bahrain Family Business Association and we distributed questionnaires with 3 layers of questions: a. control and demographics, b. franchising and c. context specific to Arab family business issues of growth.

 Findings: The Hybrid forms of arrangements on growth justified in the GCC region. Growth strategies are implemented in multiple directions. Franchising is meaningful option of growth and is also supported in our data. Finally, the observable fact or result was that family businesses operating business format franchising are dominating only small portion of the market share when compared to other family businesses that are operating product franchising in the industry of franchising in Bahrain.

 Originality/Values: The paper raises interesting issues on Arab Family Business Growth literature, an understudied topic in the field. Additionally, there is a contribution of significance of Ansoff’s and Penrose’s Models that explored as growth options. A framework therefore is proposed on the growth directions of Arab Family Business.

Limitations: There are no common grounds of Arab Culture. Our study is limited to the Gulf Cooperation Region, since the Arab profile shows greater similarities, but our assumption is that could work and extent further on the majority of Arab population.