Poor Performance of Family-Run Businesses

Poor Performance of Family-Run Businesses

Five years of research by the Centre for Economics Performance at the London School of Economics, and the consultancy McKinsey, into the gap between Britain's productivity performance and that in the US, France and Germany has resulted in the stark conclusion that family-run firms are largely to blame.

The research team spent years studying performance indicators for 730 medium-sized manufacturing companies in the UK, the US, Germany and France. Their aim was to try and discover the reasons for Britain's poor productivity performance. The surprising results of the study found that firms which have handed control over to the next generation account for a third of Britain's productivity gap with the US.

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