FAMILY BUSINESS.ENTREPRENEURSHIP

7/30/2019 FAMILY BUSINESS.ENTREPRENEURSHIP

1/16


2/16

FAMILYBUSINESS


3/16

Chapter Objectives

To define the Family Business and discuss the history of

Family Business in India

To emphasize the roles and responsibilities of the

founder

To list the characteristics of able successor

To describe the roles, rights and responsibilities of family

members in a family Business

To understand the best practices in managing Familybusiness from across the world

To deal with the issues of succession in Family Business

To explain the role of non Family Managers


4/16

Session warm up

Name atleast 10 Business Families in India (3

Min)

Name atleast 5 Business Families of the world

(2 Min)


5/16

Did you know ?

Till 19th Century, most of the business in India were

related to trading and not manufacturing

Cawasji Dawar set up the first Cotton mill in Bombay

(Mumbai) in 1854.

Ananth Narsimhan and Ashok Soota are ther two

professionals behind Wipro Growth and traansition into

a Technology based Company

Kongo Gumi in OSAKA, Japan is considered to be theoldest running family Business. The Business started in

578 A.D. and is presently run by the 40th Generation.

Tatas have hardly 3% share holding in the TATA group.

Pallonji Mistry is the single largest share holder with18%


6/16

Definition of family business

A family businessis abusinessin which

A high percentage of share capital is owned by afamily either jointly or individually

Management or ownership is controlled by directdescendents of the founders

Family members are engaged in the highestdecision making levels

A number of generations of the same family areinvolved in Management or ownership.
http://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Business


7/16

Case in focus- Dabur India Ltd

Identify the factors which qualify Dabur in its earlier

years as a closely held Family Business

Why and at what stage/s do you think the transition of

Dabur from Family owned to professionally managed

business started

Do you agree with A.C Burmans point of view to take

company Public. Did going Public helped Dabur to

grow?

Comment on A C Burmans leadership abilities. Did he

had any other qualities apart from being the eldest

amongst the 4th generation in business?

Comment on/ discuss the succession Planning in Dabur


8/16

Stages of Family BusinessDevelopment

The typical family business goes through fourstages in its development:

1. Entrepreneurial

2. Functionally-Specialized

3. Process-Driven

4. Market-Driven


9/16


10/16

research

Several years ago, researchers David Sermon

and Michael Hit examined the strategies behindsuccessful familybusinesses. They found that

success is tied directly to how well a companymanages the five unique resources every familybusiness possesses.

Human capital.

Social capital.

Patient financial capital.

Survivability capital.

Lower costs of overnance.
http://www.entrepreneur.com/encyclopedia/term/82060.htmlhttp://www.entrepreneur.com/encyclopedia/term/82060.html


11/16


12/16

FAMILY BUSINESS SYSTEM

It is important to recognize that family businesscomprised of three separate, but overlappingdomains.


13/16

Families exist to care for and nurture their membersand provide safety and refuge in an impersonal world.Success in family is measured in terms of harmony,unity and the development of happy individuals withsolid and positive self esteem.

Business, however are economic entities where

success is measured in terms of productivity andprofitability

Ownership is based on yet another set of rules.Success for owners is measured in terms of returnon investment, protection of ownership interestsand in terms of owners values and philosophy ofbusiness.


14/16

CHARACTERISTICS OF AHEALTHY FAMILY BUSINESS

Individuals can manage themselves and relationships withothers

Family has the ability to resolve conflicts with mutual supportand trust

Boundaries between work and family are appropriate and

respected Knowledge is used wisely and isn't blocked by unresolved

relationship problems

Communications are open and clear

Individuals are flexible and able to use advisors wisely

Family has the ability to make decisions and move forward

Family is clear about goals and navigates towards the goals

Family has good direction and leadership

Transitions are managed and marked by rituals and

Intergenerational boundaries are appropriate and respected


15/16


16/16

Documents

FAMILY BUSINESS.ENTREPRENEURSHIP