Family Businesses in Poland - Part 2: Identity Capital that
Boosts Economic Development
Capitalism driven by private enterprise and self-balancing markets, as world
history shows, has evolved over centuries and has been flexible enough to fit
various cultural systems. Centrally controlled economies were established in
Eastern Europe and in parts of Asia as a brutal political experiment in the late
1940s.
At the foundation of this economic system lay the suppression of private
enterprise and the exile of capital owners. For almost half a century industrial
private property was banned in all Eastern European states, yet in some
countries, including Hungary and Poland, small craftsmanship and small plot
farming were tolerated.
Even if initially nobody said it: freeing entrepreneurial initiatives and granting
legal guarantees to private property meant restoring the basic preconditions for
capitalism. When in 1989 the first post-communist government declared the
freedom of economic life, thousands of Poles launched their enterprises investing
their savings and borrowings in start-ups. Soon the number of private
enterprises increased almost from zero to 0.5m entities and in the late 1990s it
reached 2,5 m registered firms which, for obvious reasons, predominantly were
small and very small. The number of firms in Poland oscillates around 3 mio
creating a relatively dense entrepreneurial tissue.
Initially, most of these newly founded enterprises were active in retail and wholesale trade. They have dominated this sector easily as the government policy
dismantled the large state owned internal and foreign trade companies. Small
trade firms were facilitated by the privatisation of real estate in urban centres
and other localities.
After a period of rapid expansion of the private sector, the beginning of the 21st
century brought a time of qualitative growth and differentiation of private
business activities with larger privately founded companies active in all areas of
the economy.
It is not an exaggeration to say that family firms have been crucial in the
successful rebirth of Polish capitalism, although this fact has not been widely
recognised. In fact, in a traditional society such as that of Poland, the family is
the main source of financial and manpower support for almost all entrepreneurial
activities. Thus, if 97% of all existing businesses are small firms created by
entrepreneurs with the support of their families, they are in nuce family firms.
Being de facto family firms, the Polish private enterprises have learned to
recognise themselves as such. If in 2001 just 13% of small firms defined
themselves as family firms. By now this percentage approaches 40%, being still
smaller than the EU average with 71% of small firms calling themselves family
firms.
The growing visibility of family firms in Poland has three drivers: Firstly, some
large privately owned companies (like Fakro of the Florek family, Koral of the
Koral family or Wisniowski of the Wisniowski family), have started to identify
their family legacy which has encouraged others to follow suit. Secondly, the
passage of time has forced the founders to prepare the enterprises for the
succession of management and ownership and these circumstances have
required taking into consideration the relationship between family and enterprise.
Thirdly, the Polish government supports awareness programs aimed to
encourage entrepreneurs to anticipate their retirement or exit in such a way as
to preserve the public value of the company. The combination of these factors
provides an increasing visibility to the reality of family firms in Poland.
The number of family firms in Poland and their economic weight is largely a
matter of definition, but one can say, following the estimates of Lukasz
Sulkowski that “family businesses are about 50% of all business entities, and
that they generate about 40% of GDP, generating about 50% of all workplaces”.
The importance of family firms becomes apparent when one looks at the leading
businesses in all sectors of the economy, except in energy production. For
instance, Comarch - the leading software engineering firm is a property of the
founder Janusz Filipiak and his family, Mokate – a leader in the production of
cocoa and coffee drinks is the business of Mokrysz family; ES-System K – the
fast growing refrigeration equipment producer was founded and is controlled by
the Konsor family; Inglot cosmetics was launched and is developed by the Inglot
family; Inpost - the biggest independent nationwide postal service provider was
found by the Brzóska family; the largest producer of windows in plastics
Oknoplast, was created and developed by the Placek family. And these are only a
few of many examples.
If small family firms are omnipresent, the new and important economic
phenomenon in Poland are medium- and large-sized family-owned companies.
Their performance has become an important consideration to the country’s
economy. These companies have acquired some scale, organisational complexity,
became professionalised in management and are capable of becoming important
players in larger business operations. Some of them, like for instance Buma
Construction Group and Inglot, have smoothly passed through the succession of
management and ownership although hit by the sudden deaths their founders
and main shareholders.
In one generation the principles and the main actors of the Polish economy have
been entirely reversed and the country has moved from the central command
and impersonal state ownership to the market rules with family-faced identity
capital.
About the Author
Aleksander Surdej
Professor of Economics and International Business at the Cracow University of
Economics.
Author of, among others, Succession Choices in Family Firms. The Case of
Poland, Wydawnictwo Adam Marszalek, Torun - Krakow 2010, (together with K.
Wach) and most recently “Transnational ties and performance of immigrant
entrepreneurs: the role of home-country conditions” in Entrepreneurship &
Regional Development, 2014 (together with J. Brzozowski and M. Cucculelli).
Email: Aleksander.Surdej@uek.krakow.pl
Published in Tharawat Magazine
http://www.tharawat-magazine.com/en/family-business-articles/globallandscapes/2074-familybusinesses-in-poland-part-2-identity-capital-that-boosts-economic-development