I read this article after I saw the title and was curious about the subject. The article tells us the survival of a business even if family owned rarely continues pass beyond the 3rd generation. And this statistical rule while applies to a family business also applies to political life. Its a good information to know and remember that even most successful business (or politician) will only last for so long even if his heir continue the business (or the vocation).
From BusinessWorld Philippines
July 16, 2012
Political life beyond the 3rd generation
Families dominate business, media and politics in the Philippines but very few maintain their dominance beyond the third generation. However, when one family loses, voluntarily or involuntarily, its influence or power, this then passes on to another family.
This phenomenon has been proven in empirical studies, and is considered to be the result of Asian culture which places the family as the basic unit of society as contrasted with the Western world where the individual is the basic unit.
There are extensive studies about family businesses. One major finding is that family businesses that reach the third generation and beyond, like the Roxas-Ayala-Zobels and the Aboitizes, are very rare.
There are hardly any comparative studies on families in politics. One rare book is The Rulemakers: How the Wealthy and Well Born Dominate Congress by Coronel, Chua, Rimban and Cruz.
In this column I have chosen as case studies the composition of the Senate in 1946 and the winning candidates for the Senate and the House of Representatives in the 1953 elections. Our senators and congressmen are a very good representative sampling of our country’s national leadership.
The 1945 Senate was the first senate elected by an independent Philippines. The 1953 elections took place almost 60 years ago, which is normally the time span of two generations.
May 25, 1946, 11:05 a.m., was the opening session of the first independent Philippine Senate. There were 21 senators present when the roll call was read. They were Jose Avelino, Vicente Francisco, Melecio Arranz, Mariano Cuenco, Ramon Torres, Enrique Magalona, Olegario Clarin, Salipada Pendaturn, Proceso Sebastian, Domingo Imperial, Emiliano Tria Tirona, Romas Confesor, Carlos Garcia, Ramon Diokno, Pedro Hernaez, Nicolas Buendia, Jose Vera, Alejo Mabanag, Tomas Cabili, Jose Romero and Eulogio Rodriguez, Sr. The three senators absent were Vicente Sotto, Rama and Saramain.
Of the twenty-four families that these senators represented, only one — Sotto — has a descendant in the present senate. However, the original Sotto became a national leader by virtue of being a Cebuano political leader. The present Senator Sotto became a senator not because he was descended from a political family but because of his prominence in the entertainment world.
It can therefore be concluded that of the twenty-four political families in the Senate in 1946, only one (4%) survived beyond the second generation. This is also a typical statistical finding for family businesses.
In a study of the 1953 elections, Jorge Coquia stated that senatorial candidates were chosen because of their national and regional political leadership. The political tickets were representative of the dominant national and regional political families at that time.
The eight-man Nacionalista Party slate consisted of Fernando Lopez for the Western Visayas; Eulogio Rodriguez for Manila and the surrounding provinces; Lorenzo Tanada for Southern Tagalog; Edmundo Cea for Bikol; Mariano Cuenco for the Cebuano votes; Alejo Mabanag for the Pangasinan and the Ilocano votes; Ruperto Kangleon for Eastern Visayas; and Emmanuel Pelaez for Mindanao.
The Liberal Party also chose national and regional political leaders which included Jose Avelino for Eastern Visayas; Camilo Osias from the Ilocos region; Geronima Pecson from Pangasinan; Pablo David from Pampanga; Jacinto Borja from Bohol; Vicente Madrigal from Bikol; Salipada Pendatun from the Muslim region; and Jose Figueras from Manila.
The presidential candidates were Elpidio Quirino from Ilocos Sur and Ramon Magsaysay from Zambales. The vice-presidential candidates were Jose Yulo from Western Visayas and Carlos Garcia from Bohol.
The national winners in the 1953 elections were Ramon Magsaysay for President and Carlos Garcia for Vice-President. The eight Senatorial winners were Fernando Lopez, Lorenzo Tanada, Eulogio Rodriguez, Edmundo Pelaez, Edmundo Cea, Mariano Cuenco, Alejo Mabanag, and Ruperto Kangleon.
Out of the 20 political families that were national candidates in 1953, only two or 10% have family members still nationally active. These two are former Senator Ramon Magsaysay, Jr. (2nd generation) and Congressman Erin Tanada (3rd generation). Again these are statistics similar to the survival rate of family businesses.
In 1953, 102 candidates were elected to the House of Representatives. While almost all of them belonged to political families, I count only around ten families that are still dominant two or three generations later. Among those elected and whose families remain active were: Lorenzo Ziga (Albay); Felix Fuentebella (Camarines Norte ); Miguel Cuenco (Cebu); Ramon Durano (Cebu); Ferdinand Marcos (Ilocos Norte); Floro Crisologo (Ilocos Sur); Francisco Ortega (La Union); Daniuel Romualdez (Leyte); Lorenzo Teves (Negros Oriental); and Diosdado Macapagal (Pampanga). After a time span of two or three generations, this is a survival rate of around ten per cent (10%). If I missed one or two families, there will still be no significant change in the statistics.
If we look at the composition of the present/2012 Senate, there are, at best, three who are third generation politicians, namely Guingona, Recto and Osmena. This is a 12% third generation survival rate, which is higher than those of family businesses. There are 6 second generation families, namely Cayetano, Escudero, Pimentel, Estrada, Marcos and Defensor. This is a survival rate of around 25%, which may seem unusually high.
Does this mean that we will see political families with a higher third-generation survival rate than business families? I do not believe this will happen. The dynamics of families in business and politics will reassert itself and third generation survivors will be less than 5% as has been the past norm. This means that statistically, less than half of the existing second generation families will survive as political families onto the third generation. In fact, at present there are no fourth generation national political families that I am aware of, while there are merely a few in the business sector.
While families will continue to dominate the realm of politics, no family so far has continued its reign beyond the third generation. While this may be possible in the future as what has occurred in business, the probability of it happening is highly unlikely.
Dr. Elfren S. Cruz is a professor of Strategic Management at the MBA Program, Ramon V. Del Rosario College of Business, De La Salle University. Please send comments or questions to email@example.com.