How can Italy ''lead'' a life of ease? Qualifying and unearthing the basic elements needed for leadership in Itay

“Addio Dolce Vita” (Good bye Sweet Life); this title portrays Italy’s situation today. It is The Economist survey made in November 2005 that explains that even though at a first impression the country looks a nice place to live in, for its attractions: nice historic cities, food and wine, healthy people and close families; in reality a lot of things have now turned sour, citizens do not go out to eat as much, do not travel as much as before and do not buy as many clothes (which was another important tradition of the country). From 1987, when the economy was at its height, this was when Italy’s GDP overtook Britain’s.
In 15 years there has been a continuous, slow decline of the economy which now represents only 80% of the UK’s.

Introduction How can Italy “lead” a life of ease?
There are many reasons for this decline; the roots of this decline are both macro and micro (visible and invisible). The former consists in the country’s terrible infrastructure which slows down transportation and exportation of local products; there has also been the crash of big corporations such as Parmalat and Cirio, but the main reason for the decline is that Italy’s family-owned firms are under increasing pressure. With the advent of the Euro in January 2002 and its current over evaluation and China’s ability to produce similar shoes, textiles, furniture and white goods at low cost, family-owned businesses in Italy are suffering and increasingly losing in competitiveness. Since nearly 90% of the nation’s economy is family-owned this has caused the country a big fall from the 24th to the 47th position in the scale of competitiveness; just one level above Botswana.
The micro-causes, or invisible causes, of Italy’s decline consist in familyowned firms, mostly small businesses: firms with less than 10 employees that represent t24% of the entire employees in Italy but only 10% of its overall production. This means that family-owned businesses are losing productivity. Secondly, they are not growing; in fact only 12% of the firms that had less than 6 employees in 1987 had more than ten 15 years later, in 2001. This last aspect goes hand in hand with the fact that many family-owned businesses face great problems when having to pass on to the next generation: it has been found that only 30% of the SME’ s make it to the second generation and only 15% to the third. So what is the problem? Is it that offspring can not or are not skilful enough to give continuity and growth to their parents business? A research by the Chamber of Commerce in Milan, where there are over 10,000 family-owned Introduction How can Italy “lead” a life of ease?
businesses in the province, found that parents and their offspring have more or less the same life style: they make the same number of phone calls, they have the same days off work, they work and sleep the same hours but have completely different leadership styles: 37, 1% of the fathers feel like captains in the firm while 31% of the offspring consider themselves the employees friend.
Hereby the critical point that this thesis wants to answer: how to enable young leaders of the future to continue their fathers’ businesses by showing them the elements needed to lead a life of ease like many of their parents did in the late 80s.
Leading a life of ease has a double meaning: the first being that twenty years ago Italy led a life of ease in a sense that it was in an economic boom period or sweet life as The Economist called it in a survey carried out in November 2005; the second meaning of sweet life derives from the fact that at the time many companies were founded by many who are now parents and had already become leaders.
As the reader can see the family will be the centre of the attention in this thesis but not just on the business side but on the social side too. The family has a key role in Italian society; as was mentioned at the start of this introduction; Italians are very close; another datum to supporting this statement is that 40% of sons and daughters between 30 and 34 years old still live with their parents. From an economic point of view this can be explained by the fact that the younger generations do not earn enough money to live on their own.