Family businesses seem to be big news at the moment – some for good reasons, some for all the wrong ones. In March, Solvay – a family-controlled public company in Belgium – raised eyebrows in financial markets when it acquired the French chemicals company Rhodia in one of this year’s largest European M&A deals. Further south, a hitherto highly successful venture run by a certain Gaddafi family made an altogether different set of dramatic headlines by attracting the unwelcome interest of revolutionaries and NATO warplanes.

Traditionally, despite the fact that they provide employment for a sizeable proportion of the world’s population, family companies have been regarded as the less exciting end of the corporate spectrum. However, in recent years the sector has been attracting increasing interest from many of the top international business schools. Both Harvard Business School and Insead, for example, run executive programmes dedicated to the directors of such businesses, while HEC Paris has recently staged an international conference dedicated to the challenges and opportunities they face in current market conditions.

According to Mathieu Luypaert, a professor at Belgium’s Vlerick Leuven Gent school, it’s precisely the ‘unsexy’ aspects of family businesses that are making them so fashionable at the moment. “Family businesses do tend to be more conservative and safer,” he says . “They are consequently less likely to be hit by the sort of financial shocks that affected so many publicly owned companies in the crisis. In Solvay’s case it meant they came out of the downturn with large cash reserves, which has allowed them to invest in what looks to be a good deal at precisely the right time.”

However, while some family businesses such as Sweden’s IKEA seem to be models of corporate governance and market opportunism, other family concerns still fail to achieve their potential because of internecine squabbling or inadequate succession planning. “Often a family finds that the skills that got them to the first stage of success aren’t sufficient to take them to the next level,” says Jen Sheridan, a sector specialist at Melbourne Business School. “This is arguably the most risky phase for any family company because it calls for an objective evaluation of whether they need to bring in professional managers from outside. And our research suggests that many won’t admit the necessity to step aside and let others with the right people, systems and process skills take the business further.”

Roberto Flören, a professor at Nyenrode business school in the Netherlands, has been researching family businesses since 1992 and believes that their operating models have a lot to teach other private companies, as well as those in public ownership. According to him, three of their key advantages are their long-term approach, a relatively small group of stakeholders used to making and sticking to collective decisions and a paternalistic attitude to staff, which often makes for happier employees.

A survey the school conducted of more than 1,300 organisations in the Netherlands suggests that these factors help family companies to deliver higher returns than public ones. In line with Luypaert’s analysis of Solvay’s situation, Flören also believes that family-led enterprises tend to be run with more equity and less borrowing, making them much less susceptible to the problems that beset so many public companies in the global downturn. But this can also be a potential source of weakness, as an unwillingness to make use of external finance can dampen growth potential and mean that market opportunities are sometimes missed. “Family businesses certainly aren’t perfect,” says Flören. “These companies can be over-cautious, and working in a structure where all the leaders come from the same gene pool can be demotivating for ambitious employees.”

However, it does seem that the latter point is now being addressed. “Our research shows that these type of businesses still find it harder to hire new graduates because it’s accepted practice to join some form of large company trainee scheme. But the message appears to be getting through that they can often provide as good, if not better opportunities because they are well managed.”

So does this mean that Flören would go so far as recommending that Nyenrode’s MBAs should think about joining a family business? “I wouldn’t dream of deterring an MBA from joining a public company, but I’d certainly flag up family companies as an alternative for those thinking about setting up their own business. An MBO or MBI into a well-run family company, open to new ideas and a wider business perspective, could give them much better odds for success than starting a new venture from scratch.