The family business has proved to be a remarkably durable institution. Far from being pushed aside by more modern forms such as the shareholder-owned corporation, family enterprises actually account for a bigger share of the Fortune Global 500 (19 percent) than they did a decade ago, according to McKinsey.
There is one point at which family businesses are especially vulnerable, though — when leadership is transferred. There's a whole academic literature on family-business succession, the basic conclusion of which is: it's hard. Do you go with the eldest son who has been groomed since birth to take over, or the younger daughter who's twice as smart? What if the kids don't get along? What if they're not interested in business? What if they can't control their anger around macadamia nuts?
Let us then consider the challenges of succession at one especially significant family business, the petroleum enterprise known as the House of Saud. This enterprise also happens to be a sovereign nation, and there are lots of other lenses through which one can view this week's events in Saudi Arabia than that of family-business succession. But the reliance of the Saudi economy on one product does make it look more like a business than your average country, and it is definitely ruled by a family. A HUGE family.
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