2023-12-18 18:59:51
Through interactions between company and territory, an anchor is built over time. This appears particularly strong for family businesses which remain in the same territory for years, sometimes generations. The territory gives a certain color to the identity of a company as well as to the identity of the individuals who compose it. Territorial anchoring is therefore also expressed in the sense of belonging of the latter to this space.
However, this feeling of belonging appears particularly marked among managers of small and medium-sized family businesses (SMEs), whose decision-making power and the majority of capital are held by a family, as shown in the last study of the National Observatory of Family Entrepreneurship, supported by the Audencia Family Entrepreneurship & Society Chair in partnership with CIC Private Banking and implemented by OpinionWay.
“We grew up here…”
In our representative sample of 656 companies, 25% of companies with more than 10 employees in France are family businesses. These are more present in the provinces than in Île-de-France (15%). In the lead, the South-East with 30% of family businesses. The second region where their proportion is highest is the North-West (28%), followed in equal proportion by the South-West and the North-East (25%).
National Observatory of Family Entrepreneurship (2023), Provided by the author
The managers of these family businesses are distinguished in particular by a strong attachment to their region of origin. At the national level, 92% of the managers surveyed live in the same region as their company, a percentage which rises to 97% for family businesses (EF) compared to 91% for non-family businesses (ENF). In addition, 18% of the managers surveyed were born in the company’s region and have lived there their entire life. A figure which rises to 22% for managers of family businesses. 45% of the managers surveyed have even lived there for more than 20 years, including 54% of family business managers.
The general manager of a family SME in the construction sector is one of them:
“We grew up here, in the region, my brother and I. […] what we find here is real comfort of life and an environment that we consider extremely favorable and pleasant on a daily basis. It’s an element that matters to us and consequently, we also take care to develop it or maintain attractiveness in our territory, so it goes beyond the company, it’s also its environment.”
National Observatory of Family Entrepreneurship (2023), Provided by the author
As a result, family businesses contribute more to the local economy. A significant part of sales is in fact made in the region where the company is headquartered, a phenomenon that is even more true within family businesses. Thus, for 56% of managers surveyed at the national level, more than half of sales are made in the region of the company’s headquarters, with a significant gap of 21 points between EF (72%) and ENF (51%). A notable exception for the North-East region (42%) which can be explained by the proximity of neighboring countries such as Germany, Belgium, Luxembourg and the Netherlands, with which the leaders maintain more sustained commercial relations.
The manager of a private equity fund interviewed in the study offers an explanation:
“Small companies are not always attracted by “Big is beautiful”. They prefer to invest in territorial anchoring and not to grow.”
Furthermore, 59% of family business managers hold more than 50% of their real estate, land and equipment in the region of the headquarters (compared to 39% for ENFs). This most often concerns managers aged between 50 and 64 (52%) or working in mid-sized companies with between 500 and 999 employees (71%).
Less attachment among employees
The Observatory’s results also show that employees have less interest in regional anchoring than managers, even if this anchoring remains important.
National Observatory of Family Entrepreneurship (2023), Provided by the author
When we look at the 5 regions, we see in particular that the Northern regions (West and East) seem to have a greater attachment of employees to their territory. In fact, around 9 out of 10 managers in these regions say that more than half of their employees come from the region. This is slightly more pronounced for family firms than for non-family firms.
As demonstrated by the deputy general manager of a family SME in transport:
“In our historic company, 47% of our employees live less than 25 kilometers from the company even though we are in the countryside. And we, the family, all live within 5 km of the family business. We are really very attached to the territory and we always try to hire people from our region.”
However, this trend appears less marked in the southern regions which mainly attract employees from other regions, perhaps because of the quality of life and the climate. Only 58% of ENF managers in the South West say, for example, that more than half of their employees come from the region.
Île-de-France also attracts employees, but for different reasons. The employees work there, but do not necessarily live in the area or are not from there. In fact, only 51% of IDF managers estimate that more than half of their employees come from the company’s region.
And tomorrow ?
If family businesses have been built locally over generations, the culture of younger generations seems different today. Young managers do not have the same opportunities or the same level of education as their parents; for example, they can study or work internationally more easily before joining the family business.
In addition, their relationships with work and family are no longer the same as for previous generations. Balance between professional and personal life has become fundamental. However, when they decide to return to the family business, it is to help it grow, direct and govern it differently. In their own way, they give meaning to its initial mission, deciding, for some, to transform it, for example into a responsible, mission-driven company.
New profiles, not always buyers, are taking advantage of this object that is the family business to make it a playground for experimenting with entrepreneurial, philanthropic projects or even to become guardians of intangible heritage, and therefore of territorial anchoring of the company, to pass it on to following generations.
You can consult here the full report from the Observatory supported by the Audencia Family Entrepreneurship & Society Chair, in partnership with the CIC Private Banking and implemented by OpinionWay, with a representative national sample of 656 managers of companies with 10 or more employees in the private sector. The representativeness of the sample is ensured by the criteria of region (UDA5), company size and sector of activity. This survey was supplemented by additional individual interviews.
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