Malta’s family businesses are increasingly self-aware and well-poised to leverage their key characteristics to heighten their competitiveness, according to a survey.

Respondents to the Malta edition of PricewaterhouseCoopers’ global survey of family businesses cited factors including personal involvement, passion, flexibility and loyalty as the differentiators which contributed to them having a competitive edge over non-family businesses.

PwC interviewed 100 family businesses over the phone last month. Internationally, the international firm’s global survey sought the views and outlook of nearly 2,000 family firms in more than 30 countries between June and September.

“The company depends on your skills and time, so if it is your business you dedicate more time and skills to it,” one respondent said, while another added: “Continuity (is key). My company has had clients who have stayed with us for 50 years. We have a good, strong name.”

“Everyone works as hard as they can, everybody is prepared to give their best. This is a common objective,” said a third. But family businesses are also aware of the less attractive aspects of their organisations. Challenges related to succession, politics, conflicts and different agendas within the business and the family, access to finance and resources, and keeping emotion out of the operation are common issues.

Ensuring there is meritocracy in a family business is a major factor for the firm’s leaders, as one explained: “The promotions and advancements based on merit when passing on to the next generations... the worst thing is to appoint family members to seniority by default when they do not merit that position.”

Most agree that family businesses play an important role in job creation (75 per cent) and that they add stability to a balanced economy (69 per cent). While 37 per cent agree that family businesses take more risks and 47 per cent say that they are less open to new ideas, 56 per cent perceive family firms to be more entrepreneurial and 54 per cent say that they reinvent themselves with every generation; 52 per cent believe family businesses take a longer term approach to decision-making.

Family businesses recognise the need for external management input – 66 per cent have non-family members on the board, slightly higher than the global average of 64 per cent. But relatively few local businesses have non-family staff holding shares – just 11 per cent compared to the global average of 31 per cent. A further 19 per cent are likely to offer shares to non-family members in the next five years, at a par with the global average.

The survey indicates how the need to grow and professionalise to compete on an increasingly larger scale and global scale will blur the lines between family and non-family businesses over the next five years.

Many of those surveyed believe there will not be any new differences emerging over the next five years, while others highlighted issues like globalisation, increased competition and keeping up with technology as factors that will also affect non-family businesses.

But new differences will emerge by 2017, according to some family businesses. Some predict the integration of new ideas from new generations. There will also be new opportunities or threats from mergers and acquisitions. Adaptability and agility in the face of future change will also be a challenge.