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Introduction
Family-owned businesses (FOBs) have played an essential role in the evolution of business and continue to do so now. FOBs can be small, medium-sized, or huge businesses. The family business is the most common type of ownership model in the world, and it has a considerable effect on the world economy. The entire economic impact of family companies on global GDP is estimated to be around 70% (Osunde, 2017). Family firms are naturally entrepreneurial, which strengthens devotion to business success, long-term strategic planning, and corporate independence. Owing to the significant impacts of FOBs o social and economic development, it is vital to evaluate their evolution, factors contributing to their increase and success, and their specific effects on society.
Background
Saudi Arabia has endured and continues to face tremendous social and economic transformations that are difficult to comprehend for individuals who are not Saudis or have not lived in the country for a long time. Family-owned companies (FOBs) in Saudi Arabia, which are predominantly focused on elder entrepreneurship, play a critical part in the Kingdoms growing economy (Munagapati, 2018). However, there is a scarcity of literature and information devoted to detailing their histories and accomplishments in this transformation process. Whether in industrialized or developing countries, family businesses play an important role in world economic progress. Although many researchers have assessed FOBs economic contributions and social responsibility, the information regarding their evolution and prevalence is scarce. This necessitates a thorough evaluation of internal and external factors that support or hinder their success.
Literature review
The prevalence of FOBs in Saudi Arabia
Samara (2021) looked into the factors influencing the increase in family enterprises in Saudi Arabia, focusing on socio-cultural factors. Their findings show that patriarchy and communitarianism are prevalent cultural traits that have led to a sustained dedication to the family firms workforce, prioritization of family harmony over all other goals, and informal human resources (Samara, 2021). On the same note, Alhebri (2021) found that the existence of heightened uncertainty has allowed the creation of informal governance arrangements and prompted controlling owners to pursue conservative financial policies. Depending on the legal structure of the company, the stage of generational control, and the dynamics of family relationships, these activities result in a variety of economic and societal effects. Munagapati (2018) also realized that family relationships, social capital, and human resources are some of the factors contributing to the high prevalence of FOBs in Saudi Arabia. Evidently, as FOBs increase, they pose significant effects on society.
Impacts on society and vice versa
Researchers have attempted to establish the connection between FOBs and societys progress. Alhashim and Khan (2020) investigated the evolution of Saudi FOBs and identified the roles played by such enterprises on the economic growth of individuals in society. They found that FOBs play an essential role in Saudi Arabias economic development through employment creation and government revenue through taxes. Saudi Arabia has a huge number of family-owned enterprises, which employ 51 percent of the countrys workforce and generate income worth 232.5 billion Saudi riyals (Alhashim & Khan, 2020). Family-owned businesses have unique tactics, structures, and laws that set them apart from the competition.
The business interacts with society at all levels since they get labor from the community and sell their products in the same community. Alrubaishi (2021) found that family businesses embrace innovation, contributing to the community and national growth. Osunde (2017) assessed the economic impacts of FOBs and social sustainability. He found that family businesses have a number of favorable economic ramifications. First, family firms are more profitable and have earned considerable revenue for the state in the form of corporation and employee taxes (Osunde, 2017). Second, they hire and keep personnel even during economic downturns, and they participate in socially responsible activities. The vice versa is also true in that the community supplies FOBs with skilled labor and revenue through purchasing the firms products.
Research questions, aims, and objective
FOBs have been in existence for decades, influencing national and global economies. To understand how the family firms evolved and the contributing factors, it is crucial to develop clear objectives to answer the most relevant research questions. In this case, four research questions can be highlighted. To each question, a list of objectives can be drawn to guide the research process and give meaning to every aspect of data.
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RQ1: How did FOBs develop in Saudi Arabia?
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RQ2: What factors that have contributed to the prevalence of FOBs in the country?
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RQ3: How do FOBs affect the society and vice versa?
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RQ4: What are the lessons from past and present FOB structures that can lead to the future success of family firms?
Aims/objectives
The main objective of this research is to identify the origins of family firms. This entails a consideration of the steps through which such corporations have gone to become successful. In many cases, a business faces significant challenges before it is established in the market. Through this research, the challenges facing family start-ups can be noted and proposals were given to mitigate such effects in the future. The second objective is to understand how internal factors such as management and external factors, such as government regulation affect the success and sustainability of FOBs. According to Osunde (2017) family firms employ at least 51 percent of all Saudis workforce. Therefore, it would be vital to study the business-society link and develop mechanisms for improved performance.
The third aim revolves around the environments impact on business. The environment is hereby defined by human capital which is defined by the availability of labor and their level of training. This is an important aspect because the quality of labor determines the business performance. Lastly, the research aims to uncover the lessons gained from past FOB influences and how they can be applied in the future for business sustainability. From these objectives, the methodology is formulated.
Research Methodology
Research Design
The literature study presents a wide range of viewpoints on the definition, conceptual framework, and application of corporate governance mechanisms in various industrialized economies. It also reveals gaps in past researchers that can be filled through advanced search. However, the majority of the research has been done in publicly traded companies that are not held research design should accommodate all data types from past events to find relevant data from which inferences can be made. This paper is designed as a combination of qualitative and quantitative research.
Research Strategy
Qualitative research is mostly descriptive, giving theoretical information about the data collected. Although qualitative research is discouraged in non-sociological fields, it provides a good method of understanding different phenomena. Therefore this research will use qualitative data to collect information on the evolution and processes through which FOBs have developed. This will be done through interviews and questionnaires. One point to note is that although questionnaires can be administered online, they would better be physical since the companies evaluated are within Saudi Arabia. In addition, it would be beneficial to explain in-person the relevance of the research to the respondents. Since many executives may be too busy to participate in the interview, a sample will be used while the rest are issued with questionnaires.
Quantitative research gives measurable values that can be subjected to various analyses for deductive results. Notably, quantitative data complement descriptive research by providing a way of measuring the elements noted through the primary research. For this project, secondary research will be used to derive quantitative data. Some of the expected results include the percentage of businesses operated by families in the public and private sector, a comparison of FOBs in different countries, and the performance characteristics of family corporations. The data collected through both methods will be analyzed statistically and empirically.
Research population
A sample size of 100 businesses will be used after carefully considering geographically distributed corporations operating within Saudi Arabia. Three top-level managers from each company shall be interviewed, making the total number of participants a minimum of 300 individuals. The gender aspect will be dictated by the company. In firms having a gender-balanced workforce, two men and one lady will be selected. For best results, the companies chosen should have been operational for at least five years. This is to ensure that the history, successes, and failures are recognizable.
Data collection
Analysis and Ethical Considerations
From the collected data, an analysis will be carried out through data visualization using charts and by using probability functions to understand the impact of business actions on society. In regard to ethics, using people for research requires careful observance of their cultural practices. For this reason, it is crucial to ensure that subjects are consulted before being interviewed and are given the freedom to answer only the questions they feel comfortable about. Sensitive topics should be avoided to motivate responders to participate.
Resources and timelines
This research is not resource-intensive as it is mostly involved with manual methods of data collection. However, a researcher would need to have access to books, journals, and repositories to get secondary information concerning Saudi Arabias FOBs. A mobile device for an electronic questionnaire would also be required. The timeliness is so set as to give ample time for data collection and analysis. One week will be used to identify the potential research participants and to seek access to secondary sources. At least three weeks will be used to collect data, both physically and electronically, after which a minimum of one week can be allowed for data analysis and presentation.
Conclusion
In conclusion, family enterprises make up a significant portion of Saudi Arabias businesses, contributing a good percentage of the nations GDP. Although a considerable number of analysts have evaluated the performance of FOBs, little has been done regarding their formation and their interactions with social institutions. This proposal aims to outline the impact of internal and external factors on FOBs and the resultant social consequences, through qualitative and quantitative data analysis.
References
Alhashim, H., & Khan, M. (2020). Evolution of family- owned business in SAUDI ARABIA. PalarchS Journal of Archaeology of Egypt/Egyptology, 18(16). Web.
Alhebri, A., Al-Duais, S., & Almasawa, A. (2021). The influence of independence and compensation of the directors on family firms and real earnings management. Cogent Economics & Finance, 9(1). Web.
Alrubaishi, D., Alarifi, G., & McAdam, M. (2021). Innovation heterogeneity in family firms: Evidence from the date industry in Saudi Arabia. The International Journal of Entrepreneurship and Innovation, 22(2), 7587. Web.
Munagapati, B. R. (2018). Analyzing family-owned SMEs & study the factors influencing them. International Journal of Civil Engineering and Technology 9(2), 307-317. Web.
Osunde, C. (2017). Family businesses and its impact on the economy. Journal of Business & Financial Affairs, 06(01). Web.
Samara, G. (2021). Family businesses in the Arab Middle East: What do we know and where should we go? Journal of Family Business Strategy, 12(3), 100359. Web.
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