Family business as an important component of economic activities in the Slovak economy

Rodinné podnikanie ako významná zložka ekonomických aktivít v hospodárstve Slovenska

Monika Naďová Krošláková (Slovakia)

Family  businesses  make  up  more  than  two  thirds  of  all  business  entities,  thus  playing an important role in Slovakia ́s economy, contributing to GDP, and generating a number of job opportunities. They significantly stimulate Slovak business environment, operate in different regions  and  support  local  community  projects.  They  adapt  more  flexibly  to  market  needs and achieve better quality control because of personal relationships with employees, customers and  suppliers. At  the  same  time,  through  their  export  and  innovation  activities,  they significantly  participate  in  the  export  and  innovation  performance  of  the  Slovak  economy. Nevertheless, family business in Slovakia does not exist as a separate category, the legislative framework of family business is missing and the formulation of the current business legislation is  inaccurate  and  complicated  for  both  the  family  and  family  business.  The  aim  of  the monograph  is  to  identify  the  key  development  factors  that  have  a  significant  impact on increasing  the  competitiveness  of  family  businesses  in  Slovakia  and,  in  relation  to  the identified  barriers  and  expected  challenges,  to  propose  measures  to  improve  the  support  and competitiveness of family businesses in Slovakia. The monograph is divided into 8 chapters. It contains  44  graphs,  13  tables,  2  diagrams,  2  maps,  3  pictures  and  8  attachments.  The  first chapter  is  devoted  to  the  theoretical  aspects,  the  definition  of  basic  categories  and  the importance of family business. In other sections, the monograph characterizes the legal aspects of family business and addresses specific issues of family business such as management and planning.  Chapters  5  and  6  explain  the  framework  conditions  for  the  establishment  and development of the enterprises concerned and assess the effectiveness of selected factors on the growth  of  family  enterprises.  The  final  chapter  contains  a  comprehensive  study  of  the establishment and development of family businesses with a focus on the determinants of their growth in Slovakia. The result of the solution of this issue is to identify key growth factors and propose  measures  that  could accelerate  the  growth  and  competitiveness  of  family  businesses while  improving  the  conditions  for  their  development  under  the  conditions  of  the  Slovak Republic.  The  internal  determinants  of  family  business  growth  include  the  existence  of a strategic family master and successor plan, the establishment of rules for eliminating conflicts and preventing the transfer of conflicts from the business to the family and vice versa, and a pre-developed  family  constitution  as  a  tool  for  determining  the  rules  of  business  operation  and at the same time allocating competences to family members in a family business. A prerequisite for  the  growth  of  family  businesses  are  also  their  export  and  innovation  activities.  In  this context,  the  support  of  export  and  innovation  activities  of  family  businesses  is  an  important factor  in  their  dynamic  growth  and  competitiveness. The  unavailability  of  external  financial resources, complicated and rapidly changing legislation and the absence of an assessment of the impact of regulations on the business environment can be classified as long-term external barriers to the growth of the businesses concerned. Furthermore, there are shortcomings in the business environment such as demanding and complicated law enforcement and lack of court functioning, high administrative burdens especially when setting up family businesses, high tax and levy burdens, and lack of skilled labour. Creating a quality business environment is one of the key determinants of ensuring prosperity and increasing competitiveness, not only of family businesses,  but  of  all  business  entities  in  Slovakia.  The adoption  of  the  definition  of  family business,  the acquisition  of  detailed  quantitative  and  qualitative  statistics  on  family  business and  the  subsequent  quantification  of  economic  impacts  on  Slovakia  as  a  basis  for  further measures supporting the competitiveness of family businesses become important