Over A Century Of Evolution
Arpi Khatcherian:
Textile Manufacturing
April 2016
Family Business
This case highlights the Arafa group of companies, a family business that is over a hundred years old and in its third generation leadership. Starting as a modest fabric retailer in the early twentieth century, the family business grew significantly only to be nationalized during Nasser’s rule. The Arafa family regained control of the company under the open door policies of Sadat and started its expansion to become fully vertically integrated group of companies, starting from fabric manufacture apparel retailing. The case also highlights the governance model of Arafa group as a fully professionalized and institutionalized family business.Although the family owns 60 percent of the group shares, only one family member holds an executive position as chairman and CEO of the holding company, while other family members have seats on boards of the subsidiary companies. This case emphasizes the importance of family business in the country’s economy and illustrate some of the challengesthese businesses face as they strive to grow and sustain their viability over time.
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