(SINGAPORE) Why do some companies struggle to survive, while others thrive, well over a century after they were established?

It is a question which has preoccupied many management gurus over the years. And it is a question which will be raised once again this week as mainboard-listed Boustead Singapore celebrates its 180th year of existence tomorrow.

Technically, Boustead is Singapore's second oldest company, after Guthrie GTS.

But Guthrie vanished for several years in the mid 1980s when Malaysian tycoon Tan Koon Swan bought it, then absorbed it into the stable of Malaysian-listed Gamuda. Mr Tan's troubles during the Pan Electric debacle of the mid-1980s forced him to divest Guthrie later, and the company was reincarnated as Guthrie GTS.

So technicalities aside, Boustead remains the only Singapore-based company which can boast an unbroken lineage of almost two centuries.

In Singapore, there are a dozen surviving companies which are over a hundred years old. Set up during the colonial era by British traders and entrepreneurs, most - like Guthrie and Boustead - started life in the trading and transportation sector.

Others, like law firm Rodyk & Davidson, were set up to service these new players sprouting up in the British colonies. Some, like Eu Yan Sang, have stuck to their original businesses, but have modernised an ancient activity.

But despite their age and significantly different businesses, most of these century-old corporates are Asian multinationals enjoying double digit growth today.

This is all the more remarkable, given the odds against survival for companies in small economies.

According to Arie de Geus, a well-known organisational science expert and a 38-year-old veteran of Royal Dutch/Shell, in some countries 40 per cent of all newly created companies last less than 10 years.

Mr de Geus also notes that the average life expectancy of a multinational corporation - Fortune 500 or its equivalent - is between 40 and 50 years.

In fact, one-third of all the companies listed in 1970 Fortune 500 list had vanished by 1983 - acquired, merged or broken up.

A study by Ellen de Rooij of the Stratix Group in Amsterdam, done 12 years ago, indicated that the average life expectancy of all firms, regardless of size in Japan and much of Europe, was a mere 12.5 years.

So why do some companies thrive for so long, when others barely survive the first decades?

Boustead's chairman and group CEO, Wong Fong Fui, cites adaptability.

'Business cycles have been getting shorter and tighter, and a company's survivability depends largely on its ability to adapt to the changes thrown up by these cycles,' he says. 'Boustead itself has gone through numerous economic and business cycles, and world events like the Great Depression, World War ll, and survived numerous political changes in its markets. The survival of this company has been due to its ability to adapt to the new realities after each upheaval.'

In his book, The Living Company, Mr de Geus argues that successful surviving companies exhibited four key factors.

First is a sensitivity to their operating environment which enables them to learn and adapt quickly to changes occurring around them.

The second factor is cohesion and identity. This defines a company's ability to create a strong sense of identity and persona for itself which is essential for survival amid challenges.

Thirdly, longevity is also dependent on the company's ability to tolerate decentralisation of control and diversification, and yet maintain strong and cohesive relationships within and outside of itself.

Fourthly, companies which survive tend to be those which are financially conservative. They are frugal and do not risk capital gratuitously. By keeping their proverbial gunpowder dry, they are well equipped to pursue new options and opportunities, and also attract third party financiers.

But Mr Wong adds one more point: technology.

'The role of technology is also critical,' he says. 'The technology that propels you forward now can become an albatross around your neck a decade later. You have to adapt new technology. Be a master of technology, not a slave to it. The only businesses where you don't have to worry about the impact of changing technology is in the art of fine wine-making. But we are not all wine-makers.'