Merger of Family Companies in the Czech Republic as a step in their Continuation and Further Development

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F04274644%3A_____%2F18%3A%230000386" target="_blank" >RIV/04274644:_____/18:#0000386 - isvavai.cz</a>

Result on the web

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DOI - Digital Object Identifier

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Result language

angličtina

Original language name

Merger of Family Companies in the Czech Republic as a step in their Continuation and Further Development

Original language description

Family businesses and management of succession strategy are topical themes in the Czech Republic. During twenty nine years after the “Velvet Revolution” in 1989, family companies were restituted or started up and subsequently developed. Now is the time for handing them over to the successor generation. One of the possibilities of their growth, continuation and expansion is a merger. In the Czech Republic a research of family business is at an early stage, as so far it has been carried out mostly using qualitative methods (round table discussions, face-to-face interviews, etc.). The information for this paper was drawn particularly from monographic expert resources, scientific articles contained in the database Proquest. Primary research was carried out by means of the qualitative method. The aim was to gather information from owners of family companies regarding their expectation in relation to a merger implemented as an instrument of further growth of the companies. To evaluate indicators ROE, and ROA before the merger itself, compare results of public limited companies and limited liability companies. The information and data were collected during round table discussions with owners of family companies. In-house materials of companies were analysed and data from ARES, a public register of economic entities and from the Collection of Documents (Sbírka listin) were processed. Further, the method of synthesis and deduction of conclusions was employed. It has been found out that the family companies prefer a merger, aiming to improve management efficiency, unify company policies, expand business activities, utilise synergic effects, simplify the ownership and organisation structure or make them transparent. Mergers are expected to reduce total operating costs and improve efficiency of processes. Mergers are carried out at the national level and the companies continue as family companies. The analysis of final accounts showed that before the merger the companies had both a low return on equity (ROE) and a low return on assets (ROA). The current ratio was either very low, or, on the contrary, high. The low value evokes a high risk of a lack of funds to repay short-term liabilities. The high liquidity indicator implies that companies use unreasonably expensive source of funding. Based on the analysed factors a hypothesis has been confirmed that better ROE and ROA before the merger were reported by companies with the legal form of public limited company.

Czech name

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Czech description

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Type

D - Article in proceedings

CEP classification

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OECD FORD branch

50204 - Business and management

Project

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Continuities

S - Specificky vyzkum na vysokych skolach

Publication year

2018

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Article name in the collection

26th EBES CONFERENCE - PRAGUE PROCEEDINGS

ISBN

9786056762253

ISSN

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e-ISSN

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Number of pages

15

Pages from-to

1437-1451

Publisher name

EBES

Place of publication

Istanbul, Turecko: EBES Akşemsettin Mah.

Event location

Praha

Event date

Oct 24, 2018

Type of event by nationality

WRD - Celosvětová akce

UT code for WoS article

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