Gulf family businesses need pro-active approach

One of the world's leading management gurus has warned Gulf family
businesses that the future for agency agreements is not bright, and family concerns that have thrived on them in the past need to change quickly and proactively

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By  Charlotte McDonald Published  March 29, 2001

A leading global professor has urged the Gulf’s family-owned local agencies to undergo rapid and profound changes to survive in the new economy.

Aneel Karnani, professor of corporate strategy and international business at the University of Michigan Business School, was making his comments ahead of an executive education programme entitled 'Global Business Strategies'. The event takes place from April 16-18 at the Jumeira Beach Hotel, Dubai.

"In the past most large multi-national companies operated as a loose
federation of local businesses, now they are changing to operate as truly global companies which are integrated across many countries and regions," said Professor Karnani. "As they implement this change they want to exercise greater control over local distribution, and the role of local agencies will decline."

Advances in information technology, telecommunications and specifically the Internet, will lead to the decline of intermediaries, such as local agencies, in many industries, says Karnani.

"Family-owned local agencies need to radically change their business model and cultivate competitive advantage,” said Karnani. “To do this they need to change their strategy, international managerial process, and, most importantly, the mindset of the top management,” he added.

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