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Rise and fall of family dynasties Featured

I am writing this column the day after the May 13 mid-term elections. While the initial results have already come out, I think that a deeper analysis of the results should be done after an interval of at least one week. This will allow a more logical and dispassionate analysis.

There are, however, a few observations I would like to make based on the initial results. The first is that the public is talking about the fall of several political dynasties. However, it should be noted that most of the new winners are also scions of political dynasties. Those few who are not, I predict will start their own family dynasties in the next election.

I am not in favor of political dynasties. I wish there was a law, without loopholes, banning political dynasties. At the same time, I am not surprised about the dominance of families in politics. In the Philippines, and most of Asia, family dynasties are an integral part of society; and, they dominate all sectors – politics, business, education, media and even religion. This is because the family is the basic unit in Asian society, unlike in the West where the basic unit is the individual. I often point out to my friends in business that they condemn family dynasties in politics; but, this is also a dominant feature of the business landscape. All the major Filipino businesses are controlled by families.

There are certain characteristics common to family dynasties in both business and politics. They normally go through three main life stages. Each stage lasts for one generation. Less than 5% of family dynasties survive beyond the third generation. These three main stages are:

The First Generation Stage is where one individual – the founder – exercises total management control of the business or the political group. The Second Generation Stage is in which two or more siblings of the founder have more or less equal management or political control. Here, conflict is inevitable; and, the family can only stay together if they have a conflict management mechanism. This generation can also survive if one sibling is able to get recognition as the head of the family and becomes the accepted heir to the founder. The Third Generation Stage is the Cousin Consortium in which cousins (the children of the siblings) exercise management or political control of the business or politics.

In business, it is a rare family business that survives beyond the third generation. Two examples are the Ayala and Aboitiz family businesses. The same phenomenon applies to political families. Let me cite an example. If each generation is approximately 30 years, then two generations would be equivalent to 60 years. The 1953 elections was approximately 66 years ago. Even then, Philippine politics was dominated by political dynasties. Here is a list of the candidates for president, vice-president and senators. When you read the names you will realize that most of these family dynasties have not survived to the third generation.

There were two major parties in that election. For the Liberal Party, their candidates were Elpidio Quirino for President and Jose Yulo for Vice-President. Their candidates for the Senate were Jose Avelino (Samar); Camilo Osias ( La Union); Geronima Pecson (Pangasinan); Pablo Angeles David (Pampanga); Jacinto Borja (Bohol); Vicente Madrigal (Albay); Salipada Pendatun (Cotobato); and, Jose Figueras (Manila).

For the Nacionalista Party, their candidates were Ramon Magsaysay for President and Carlos Garcia for Vice-President. Their Senate candidates included Fernando Lopez (Iloilo); Eulogio Rodriguez (Rizal); Lorenzo Tañada (Quezon); Edmundo Cea (Camarines Sur) Mariano Jesus Cuenco (Cebu); Alejo Mabanag (Pangasinan); Ruperto Kangleon (Leyte); and, Emmanuel Pelaez (Mindanao).

If we review these family names, how many are still known in present day politics? The only name I can identify is that of Tañada.

The most common mistake committed by families, in business or politics, is that they focus only on managing the business or winning elections. They do not realize that in order to do this successfully it is just as important that they learn to manage family issues which often encroach on the business or the political organization causing confusion, disorder and, in some cases, even collapse. If the family is the entity that will govern the business or political organization, it is very critical that they must have a governing structure just like any other organization.

The common problem is that during the First Generation Stage there was no need for rules or structure because the “word of the Founder was Law.” However, as the siblings grow up and have their own families, this need for rules and structure becomes more urgent. For example, in most successful family businesses, one rule is that in-laws should not be allowed to join the business. Many political families do not follow this rule; and, the result is conflict among siblings.

However, it is very clear that when one family dynasty gives up, the replacement is another family dynasty. When the Soriano family left San Miguel Corp., it was taken over by Danding Cojuangco. The Estrada family has been replaced by the Zamora family in San Juan. Quezon City used to be the domain of the Amoranto family, then the Mathay family and now the Belmonte family.

The result of the dominance of family dynasties in both business and politics is that it stifles competition. It also limits the choices for the consumers and the electorate. The only remedy is to find ways to control the behavior of these family dynasties; especially politicians who have turned Philippine politics into a family business.

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