SUSTAINABILITY OF FAMILY BUSINESS CASE STUDY OF PT PRATITA PRAMA NUGRAHA

• Main Author: Fakhri Aulia, Muhamad
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/47492
• Institution: Institut Teknologi Bandung

Family-owned businesses have been the main economy contributor for the whole world. McKinsey & Company had predicted that family-owned businesses will account for 40% of the world’s largest companies by 2025. In Asia Pacific, the biggest 85 family-owned businesses employ about 3 million workers and account for 4.3 percent of the GDP, whereas in Indonesia, 95% of the local companies are family-owned businesses including the well-established companies such as Djarum Group and Golden-Agri Resources. Sustainability of family business has its own unique characteristics, and it goes through different business phases compared to non-family business. The subject of this research, PT Pratita Prama Nugraha, is a 35-years old family company that operates in a very niche industry – Non-Destructive Testing (NDT). Pratita imports & sells NDT products that ranges from radiography, ultrasonic testing devices, eddy current, up to borescope devices that cater the needs of the industry. By using the Corporate Lifecycles Graph by Adizes and combining it with corporate governance methodology from IFC, the author observed that Pratita is currently in the Go-Go phase of family business: the company is riding its high-wave, sales are up and it has a good cashflow. However, it is systematically not ready for its success. Sustainability of this company relies on the corrective actions on the abovementioned problem. Through in-depth interview, the author finds - among others - that the company lacks clear structure, job description, and authority in decision making; it experiences incoherent orientation & focus, unconducive working environment, insufficient cost control, and insufficient leadership. All of these are consistent with Adizes’ common problems in the Go-Go stage. To move to the next phase, which is Adolescence, the author digs deeper into the problems that Pratita faced, and suggested The 7 Steps of solutions to solve the problems and brings Pratita forward to the next phase. The author also suggests that cloud computing and online collaboration tools will be beneficial and even an integral part of implementing The 7 Steps for Pratita.