Why Do Turkish Family Businesses Fail?

By Harun Yazici – Editor-in-Chief

“Our business was doing great until my uncle and my father had a falling out…”
“Ever since the son-in-law joined, things have gone downhill every year…”

We have all heard stories that begin this way.

In fact, Turkey has a strong entrepreneurial spirit. People spot an opportunity, take risks—often more than they should—open shops, build factories, and pour their energy into growing a business.

But unfortunately, many of these success stories fade as soon as the company begins to expand. Family members who were once partners break away, set up their own ventures with labels like “original” or “authentic,” and continue on a smaller scale. The reality is that most Turkish family businesses do not survive to the third generation.

So, why does this happen?

Because family and business are blurred into one. Family is emotional—built on love, instinct, and bonds that don’t always follow logic. Business, however, is not. The moment you allow emotions to drive management decisions, the magic breaks.

In the West, family businesses often thrive for generations because professionalism is the foundation. Even when family members are involved, roles are clearly defined, and partnerships are built on legal frameworks—not casual handshake deals along the lines of, “Let’s get started, half for you and half for me.”

In Turkey, by contrast, roles are assigned according to family ties—“he’s my brother, she’s my niece.” Power is distributed based on household hierarchies rather than competence. Inevitably, this leads to conflict over time.

Rules, procedures, and clear management structures are rare in Turkish family companies. Instead, the business runs on whatever the “patriarch”—usually the eldest—declares. That may work when the company is small, but as it grows, the system collapses into chaos.

Typically, the first generation builds the business. The second generation then takes over, and disputes begin: Who gets what share of the profits? Who has more authority? Who works harder? These battles distract from the strategic decisions that the company actually needs.

Another common pitfall is refusing to bring in outside professionals. Many owners prefer to hand key positions to relatives, even when they lack the skills for the job. Favoring kinship over merit undermines competitiveness.

Founders, too, can be part of the problem. Many cling to the belief that “I wrote the book on this business,” shutting the door on innovation. When digitalization, new markets, or fresh business models are needed, they resist—slowing growth at the very moment adaptation is most critical.

So, what is the solution?

The failure of Turkish family businesses is not destiny. Around the world, there are family companies that have lasted for over a century. Their secret lies in institutionalization, professional management, and drawing clear boundaries between family and business.

Creating a family constitution, planning inheritance in advance, opening space for professionals, and systematizing knowledge transfer across generations are crucial steps.

Otherwise, we’ll keep hearing stories that begin with, “Our business was doing great, but…”

Would you like me to make this version a bit sharper and punchier for a Western business readership (shorter sentences, more direct tone), or keep it closer to your original reflective style?