Hungarian family businesses invest in cooperation, not generational change

By: Trademagazin Date: 2024. 11. 22. 11:35

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More than 20 percent of the 515,000 partnerships operating in Hungary today, or 130,000, are family businesses, where the owners are connected by some kind of kinship. Among them, there are several thousand family businesses that were established during the regime change and are still operating successfully today, but the key to their future success is that several generations must cooperate smoothly. Several thousand companies are currently facing the fact that the company culture must reflect the joint work of several generations, and they are also struggling with the introduction of a sustainability approach and communication challenges – according to a summary by Comline Budapest, one of the largest domestically founded training companies.

Within family businesses, several thousand companies are currently affected by the issue of intergenerational cooperation, as the founder – mostly in his late sixties or early seventies – is often older, and even two other generations try to work at the head of the company along different values, motivations and work ethics.

New generation, new communication style

The issue is also addressed by international research, with the key findings of the PwC 2023 Family Business Survey addressing the issues of generational change and business sustainability, as well as the general challenges and opportunities of family businesses. Although 79% of companies have a clear business purpose, their communication and long-term strategic planning are lacking, especially in the area of non-financial goals, such as ESG (environmental, social and governance) aspects. Béla Nagy, senior trainer and owner of Comline Budapest, added:

“In our domestic client base, it is not uncommon for up to four generations to work together in one company. Their motivations are different, their challenges are different and their work styles are different. The biggest challenge is to create the balance in which the company can continue to operate successfully. And if they have to make decisions based on non-financial goals, such as ESG compliance, this may lead to a source of conflict.”