Staunton, September 30 – Russian business has another problem, one that is not uncommon in other countries: most of the children of successful Russian business people show little interest in continuing to work in the business of their parents or even at all, preferring instead to pursue their hobbies and other diversions in a “hedonistic” fashion, a new study says.
Elena Rozhdestvenskaya, a professor of social science at Moscow’s Higher School of Economics, draws that conclusion on the basis for the first-ever study of the attitudes and plans of the future heirs of major Russian businesses, a follow on to research about business owners there (opec.ru/1875512.html).
In most countries, family businesses account for approximately two-thirds of all firms and thus the transfer of control from one generation to the next is critical, and it is also true, Rozhdestvenskaya says, that children of owners show less interest in carrying on the business than their parents often expect.
The problem of generational succession in business is relatively new in Russia. Those who began to build businesses at the end of the 1980s and beginning of the 1990s are now only approaching retirement age. Most of them have more than one child, and few have thought what they want to do beyond a strong preference to leave businesses to sons rather than daughters.
To determine what the children of such business people think, Rozhdestvenskaya interviewed 16 adult offspring of major business people who ranked in the top 100 wealthiest according to Forbes.
Her research, she suggests, is extremely timely because the issue of intergenerational transfer is now at the center of many businesses but so far no corresponding infrastructure and set of values about how to groom successors is in place. Many of the offspring have received business training but display less interest in that than in other things.
According to Rozhdestvenskaya, “the hedonistic inclination of children of businessmen is manifested in their projected life trajectories” which they offered to her in the course of the interviews. Most said they would work in business at most 15 years and then would pursue other interests.
By their thirties, the children of Russian business people said, they assumed they would have achieved financial independence and by their forties be capable of going off and forming their own companies. But by 45 or 50, they planned to leave business altogether and pursue their hobbies or other interests in order to “’find themselves.’”
Few major Russian businessmen consider involving their daughters in their businesses, something they believe they compensate for by giving them free choice in education and career, something they are less willing to do with sons whom they expect to succeed them even when this is an open question.
Most entrepreneurs told Rozhdestvenskaya that their families were handling the issue of generational succession well, although they also suggested that the situation was not being handled at all well in other families, an assessment that may be more objective and point to real trouble ahead.