General Overview of Family Businesses in Turkey

General Overview of Family Businesses in Turkey

• Approximately 95% of companies operating in Turkey are family-owned businesses. However, fewer than 10% of these companies survive into the third generation.

• According to data published by the Corporate Governance Association of Turkey (TKYD), the average lifespan of a company in Turkey ranges between 25 and 30 years.

• Although many family businesses—considered one of the backbone pillars of the Turkish economy—stand out with their high employment capacity and contribution to economic growth, they often lack structural sustainability.

Key Challenges in Intergenerational Transitions

Family businesses in Turkey experience several structural challenges during generational transitions. The most prominent issues include:

Resource Management and Growth Balance

As the family grows, the company may not expand at the same pace. This imbalance often results in insufficient resources and potential financial crises. The lack of alignment between family growth and business growth becomes even more evident when new generations join the management structure.

Lack of Institutionalization

Family businesses that experience rapid early growth often fail to complete institutionalization processes in time, leading to managerial issues and conflicts among later generations. The absence of professional management systems, clear role definitions, and institutional memory negatively affects long-term performance.

Competence and Engagement of Family Members

The interest or managerial competence of the next generation may not always be as strong as the founding generation. Assigning family members to key positions based on kinship rather than merit reduces operational efficiency and undermines competitiveness.

Differences in Management and Vision

Each generation may have different ways of conducting business, strategic priorities, and risk perceptions. When these differences are not managed effectively, they cause fragmentation in strategic direction and create bottlenecks in decision-making processes, ultimately reducing operational efficiency.

Studies show that only 4% of companies in Turkey manage to transition into the fourth generation.

According to a 2019 analysis by Capital magazine, among Turkey's largest 500 companies, only 129 are older than 50 years.

National and International Comparisons

The distribution of long-lived companies globally reveals significant differences compared to Turkey:

• According to Capital magazine (2019), only 129 out of Turkey’s largest 500 companies have been operating for more than 50 years.

• A study published by the Bank of Korea reports that Japan has approximately 33,000 companies that are over 100 years old.

• Among these are businesses founded as early as 705 AD that are still active today.

Percentage of Companies Over 200 Years Old (By Country)

Country	Share of 200+ Year-Old Companies
Japan	56%
Germany	15%
Netherlands	4%
France	3%
USA	2%

These figures highlight that long-lived companies typically possess deep-rooted corporate governance practices and a strong and enduring organizational culture.