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Sat, Nov 01, 2003 - Page 12 News List

World Business Quick Take


■ Japan

Deflation likely to continue

The Bank of Japan said yesterday it expects deflation to continue through March 2005, although it would be less severe than previously forecast. "The supply-demand gap is likely to shrink slightly during this and the next fiscal year under the expected mild economic recovery, but it is still large and thus has the possibility of retaining downward pressure on prices to some extent," the central bank said in a twice-annual economic assessment. "Consumer prices are forecast to continue posting small declines in this and next fiscal year," that ends in March 2005.

■ Ownership

Family-run firms work better

Dell Inc, the world's No. 2 maker of personal computers, online auctioneer EBay Inc and software maker Oracle Corp are likely to benefit if they remain run by their founders rather than hired executives, Business Week said. About 177 companies, or a third of those in the Standard & Poor's 500 Index, have founders or their families involved in operations, often as directors or senior managers, the magazine said, citing a study in concert with executive-search firm Spencer Stuart. The average annual shareholder return for Business Week's group of family run companies was 15.6 percent over the decade examined, compared with 11.2 percent for non-family run companies. Return on assets averaged 5.4 percent for the family group, and 4.1 percent for the non-family group, the magazine said. Companies run by their founder or family retain "their edge," because they have "managers with a passion for the enterprise that goes far beyond that of any hired executive, no matter how much they are paid," Business Week said.

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