The Al Mamnoon Family and the Third Generation Challenges

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Introduction FamilyBusiness2FamilyBusiness

The fictional Al Mamnoon Group is a successful Kuwaiti family business that is run by the second generation after its founder, Mohammed Al Mamnoon, faced sudden health issues and had to retire. With his two sons Rashid and Khalid in charge the business continues to strive. So much so that the third generation is gradually joining the family business in various different ways. This transition is challenging for the family and results in a few difficulties between Rashid and Khalid. Find out what advice Arab family business leaders give to the Al Mamnoon Group through this issue’s Tharawat magazine case study survey.

The Al Mamnoon Family and the Third Generation Challenge

T

he Al Mamnoon group was established in

Over the years, Mohammed and his two sons worked very

1967 in Kuwait by Mohammed Al Mamnoon.

hard to build a strong and diversified group of companies.

With great commitment and hard work

In the 90ies the Al Mamnoon group established activities in

Mohammed grew his small trading business

agriculture, finance and real estate, as well as a successful

into a diversified business group in few years.

cement factory.

Mohammed’s first son Rashid chose to pursue his engineering

In the 2000s however, Mohammed faced sudden health

studies in Egypt. While in Cairo, he got married to Mona

problems. He trusted Rashid’s expertise and sense of business

Al Masri, whose family owned and operated a large cotton

and put him in charge of the day-to-day business activities. As

plantation in Egypt and they had three children together

the two brothers got on well, they decided to start a holding

after they moved back to Kuwait: Ahmed, Marwa and Tarek.

structure, Al Mamnoon Investments, to ensure that the family’s ownership remained clearly structured. Both Rashid and

Khalid, Mohamed’s second son, had always been passionate

Khalid would own 30% each while Mohammed kept 40%, and

about the fine food and service industry and wanted to

remained the non-executive Chairman. The brothers arranged

establish the Al Mamnoon Group as a leader in five-star

the management of the companies amongst themselves.

hospitality. However, his father was reluctant to start a

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business so different from the core activities of the company

In the meantime, two of Rashid’s three children, Ahmed

in trade and manufacturing.

and Marwa, finished their studies and decided to go and

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FamilyBusiness2FamilyBusiness Introduction

Rashid and Khalid got together to discuss the situation of the next generation. After the discussion, they were both unsatisfied.

live in Egypt to work in the Al Mamnoon Cotton business

in Egypt. Their uncle Khalid did not appreciate this, since

which Rashid had founded together with his wife’s family.

neither Ahmed nor Marwa had ever worked in another field

Ahmed and Marwa worked for the two cotton factories in

than the cotton industry.

Cairo (spinning and yarn manufacturing) and in Alexandria (the weaving plant).

Meanwhile, Ali, Khalid’s son, has not been very motivated to stay in the family business. One night, he was out with

Khalid and his wife Alia had two children, Ali and Yasmeen.

a group of friends and he started to express his frustration

Since he finished his studies in 2004, Ali is active in the family

about his situation. One of his friends captured his angry

business as a junior manager of Al Mamnoon Investment, the

speech on video and posted it online. What was supposed to

holding company. Yasmeen followed her father’s passion for

be a normal chat between a group of friends, now became

fine food and is a highly decorated Chef in London. With

hot gossip in the Kuwaiti business community.

offers to open her own restaurant in Europe, Yasmeen is still reluctant to join the family business.

Rashid and Khalid got together to discuss the situation of the next generation. After the discussion, they were both

In 2011, Ahmed and Marwa returned to Kuwait after the

unsatisfied: Rashid felt that Khalid did not want his children

political unrest in Egypt. The future of the Al Mamnoon

to join managerial positions, even though they had been

cotton factories was uncertain. Back in Kuwait Ahmad and

working for a while. Khalid on the other hand felt his brother

Marwa wanted to work as mid-level managers, as they had

was angry with him because of Ali’s remarks.

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Introduction FamilyBusiness2FamilyBusiness

Survey Results

After sending out the Al Mamnoon case study in a survey to over 100 family business executives, responses produced the following results.

On a scale from 1 to 5, how justified to you think Khalid’s negative reaction to giving Ahmed and Marwa managerial positions in the group?

Very unjustified

Unjustified

00%

42.86%

Neutral 28.57%

Justified 28.57%

Very justified 00%

Would it be beneficial for Ahmed and Marwa to have some education before joining the family in Kuwait?

Very unlikely

Unlikely

00%

00%

Neutral 00%

Likely

Very Likely

71.43%

28.57%

Will Ali’s action have an impact on the Al Mamnoon family reputation?

12

Very unlikely

Unlikely

14.29%

28.57%

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Neutral 00%

Likely

Very Likely

28.57%

28.57%

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FamilyBusiness2FamilyBusiness Introduction

Do you think that what Ali did is something that the family can control and solve internally?

85.71% YES 00% NO 14.29% Other: Has to be solved internally and publicly

Should the Al Mamnoon family consider getting into the food industry to fulfill Yasmeen’s ambitions?

71.43% YES 14.29% NO 14.29% Other: If beneficial, depending on a feasibility studies.

Results Summary for the Al Mamnoon Family

When summarising the results above we can see that respondents have the following opinions on the Al Mamnoon family case:

85.71% 71.43% 71.43% 42.86% The great majority of surveyed family members believe that the problem caused by Ali’s mistake can be solved within the family.

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Over 70% agree that the Al Mamnoon family should go into the food industry to fulfil Yasmeen’s ambitions and to provide her with a place in the family business.

Respondents believe it would be beneficial for Ahmed and Marwa to get some further education before joining the family business.

Less than half of the respondents believe that Khalid’s negative attitude towards his nephew and niece joining the business is not justified.

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