Family Business Promoting Economic Growth Essay

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Problem Statement

Family business continues to play an important role in the economic development of many countries. Many research projects have been conducted to discuss this type of business since the 1990s, but scholars cannot understand all the constituents of family involvement. Therefore, a lack of appropriate survey designs, insufficient statistical analyses, and the existing global competitive pressures provokes the creation of new strategies and transformations in companies. The issue of competent succession has to be properly identified to determine the contribution of the family business, cultural forces, and other outside factors in the Saudi Arabia context.

Purpose, Methods, and Conclusions

The primary goal of the article is to assess the role of the family business in the economic growth of Saudi Arabia. Additional purposes include the examination of corporate structure and the analysis of reforms that may bring different consequences to the Saudi economy (Ramady & Sohail, 2010). The authors do neither give any information about the methods nor develop specific hypotheses or research questions. The conclusions of the article are about the positive and negative roles of the family business in Saudi Arabia and the necessity of the government to enhance its impact on business organization and decision-making regarding investment, production, and employment (Ramady & Sohail, 2010). The analysis of past reports and peer-reviewed articles is the only method applied in this study.

The Title of the Article

After reading the offered source for the first time, its title seems to be clear and appropriate. The authors share their intention to assess the role of the family business in the economic context and rely on the perspectives from Saudi Arabia. However, at the same time, it is hard to understand what methods the researchers prefer to complete this analysis and what steps should be taken to reach the set goals. In this title, an overall idea of the connection between the family business and the economic growth of the country is underlined but poorly explained in research terms.

The Abstract of the Article

Although the abstract is not divided into specific sections with headings, the authors use six clear sentences to introduce their article. First, attention is paid to the background of the theme where the family business is proved as a key component in family business development. The second sentence aims at defining the problematic areas in the context and revealing the necessity of additional research. The next several sentences are developed to state the purposes of the study so that the reader can learn what to expect from the article. The last two sentences help recognize the final thoughts of the authors. However, the abstract cannot be defined as representative of the research areas. Although it states that family businesses have consequences on the Saudi economy, and some policy recommendations may be given, no examples and explanations are offered to the reader in this section.

The Purpose of the Article in the Introduction

In the introductory section, there are no clear statements about the purposes of the study. To explain their main tasks, Ramady and Sohail (2010) share a common intention to address the role of the family business in Saudi Arabia and divide their work into several meaningful parts. For example, it is clear that the examination of the current corporate structure is necessary to prove and develop several reforms in the country. In addition, the authors mention that family businesses undergo changes to become public in the stock market, which may cause consequences for the local economy. Therefore, it is important to identify the effects of such shifts and use the current numbers (137 new companies) as the main proof (Ramady & Sohail, 2010). Finally, it is said that police recommendations have to be given at the end of the article. Still, the lack of clarifications and explanations makes it hard for the reader to learn the true purposes of the article.

Errors of Fact and Interpretation

A considerable part of the article is based on the findings of the authors about the economic development of the country and its relationship with family businesses. However, there are several sentences that contain a subjective point of view and may be defined as errors of interpretation. For example, the authors conclude that the government uses internal reforms to control family business procedures instead of establishing new regulations, which cannot last forever (Ramady & Sohail, 2010). This interpretation does not have a solid background but focuses on personal predictions and visions. Besides, some judgments are based on old resources, which contradict the necessity to consider cultural differences and changes. The researchers are not able to develop thoughtful statements, using the findings from the 1980s and admitting the worth of cultural factors.

The Relevance of the Discussion

The discussion is properly developed in the article under analysis. The authors create three meaningful sections about the family business and its development through the prism of the Saudi Arabian economy. The major forces that can influence family businesses are defined, including culture, heredity, family relationships, religion, and social classes (Ramady & Sohail, 2010). This identification is vital for understanding how family members may organize their memberships and tasks. The role of the government cannot be ignored because its pressure determines how families behave and cooperate. The number of stock companies, limited and joint liability partnerships, and mixed facilities proves the average capital in the country. Ramady and Sohail (2010) recognize six main sectors that define the economy, including agriculture, real estate, services, diversified trading, oil industry, and finance. The next aspect of the discussion touches upon the changes in structural management. For example, instead of a pyramid-like organization, Ramady and Sohail (2010) offer a horizontal structure to delegate responsibilities. However, the reader cannot find enough information about each change in resources, competition, or organization and the expected outcomes. Therefore, additional research is required to highlight each management shift.

The Pertinence of the Used Literature

Most of the sources are pertinent because they discuss the history and the development of the Gulf region. Several articles aim at discussing American and Asian economies, but such a choice of studies is necessary to understand how structural changes have already influenced other countries at the moment of the current research. The authors cite several local reports and newspaper articles to show how recent changes affect an overall understanding of the economic relationships in the country. However, the reader can notice that some sources are outdated, which may question the credibility of the findings within the required context and the role of cultural, religious, and social changes. To avoid misinterpretation, it is better to delete the resources published before 1995 and find relevant literature.

The Clarity of the Authors’ Statements

To prove the importance of reforms and shifts in the family business, the authors develop several statements that are clear and coherent. First, Ramady and Sohail (2010) use the report of the Saudi Arabian Monetary Agency (SAMA) to admit that share price moments for family business representatives could influence the market and many capitalization procedures. Another observation is related to the worth of transparency in investment and the possibility of promoting a safe climate for privatization sales. Finally, the authors emphasize the role of globalization in decision-making and the growth of family businesses. To strengthen the discussion, it is possible to avoid using such ambiguous statements as the positive and negative roles of family businesses and substitute them with clear examples in regards to the Saudi Arabian economy like increased Gross Domestic Product or minimized wealth effect.

Overemphasized and Underemphasized Ideas in the Article

From the start, the authors admit the role of culture in the development of business relationships within families. However, the discussion itself lacks enough details about different cultural factors after the offered shifts. Therefore, it is correct to say that, compared to an overemphasized role of culture at the beginning, this idea remains underemphasized at the end of the article. It is recommended to define how the current study affects the perception of cultural characteristics in family businesses.

Underlying Assumptions in the Article

One of the main assumptions made by the authors is related to the need for economic reforms for the government to control the development of family businesses. Another observation touches upon the change of private corporations into public-listed organizations to promote a positive economic impact. The last statement proves the importance of family business decision-making in the economic sector in terms of investment and employment.

The Authors’ Objectivity in Their discussion of the Topic

Due to the fact that there were no personal judgments and attitudes towards family businesses in Saudi Arabia, it is correct to say that the authors were objective in their discussion of the chosen theme. They used many additional sources to explain their thoughts and prove their conclusions. To remain rational in their analysis, the authors put much responsibility on the government as the only regulator of commercial decisions. Although the study highlights the required changes, the Saudi government has to adopt policies and allow family businesses to contribute to the local economy positively.

Reference

Ramady, M. A., & Sohail, M. S. (2010). Assessing the role of family business in promoting economic growth: perspectives from Saudi Arabia. International Journal of Entrepreneurship and Small Business, 10(4), 447-459.

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