A Look At The Greatest Family Business Practice

A Look At The Greatest Family Business Practice

India 24/7 Hotline. Tel: +91 8010772772

[email protected]


A large chunk of the world business arena is contributed by family businesses.

Various forms and typologies of these exist and often it has been difficult to fetch

a single applicable definition of the family business system. The different aspects

of this unique phenomenon involve its form and level of family influence,

ownership and inter-generational succession.

The various structural elements of identifying a family business include a multi-

generational influence of family on a fir ’s policy, objectives and ownership

control by members of a family. It may also include ownership by a single family or

individual or majority ownership by single family.



There is also different organisational type such as family-owned and family-

managed businesses. A family owned is for profit in which majority of shares are

owned by members of a single extended family. In comparison, a family owned

and managed business is one in which not only are majority of shares owned by

family members but family members are in active participation in the top

management. A family owned and led company goes a step ahead.

Famous global family businesses include names such as Cargill, Levi-Strauss,

Marriott, Wal-Mart etc. All these companies have a strong presence in India as

well.



It shows the former characteristics and also the business has active participation

by at least one member of the family on board of directors. In such an enterprise

family members have control and influence over the co pa y’s goals, strategy

and culture.

There are many other types of family business which do not come under any

traditional model. Today there are many forms of family business which display

tradition family, conflict family and entrepreneurial traits. Also the degree of

involvement can range from royalist, mixed management to professional

management. The culture of the organization may range from paternalistic to

democratic to participative and finally professional.



The management style is indicative of the generation running the business and

passing the baton that is succession is always a major decision. The inter-

generational goal congruency is a determinator of organizational success.

Despite the various models and studies in this field, it remains a complicated

subject and one that is evolving as various new designs of family businesses crop

up with time. These new manifestations further extend the typologies and

definitions of family businesses.

These businesses have their own unique dynamics related to the emotional family

unit, succession and leadership style. Top executive search firms cater to family

businesses and their unique needs in providing them with the right talent and

executive coaching to aiding succession planning.


http://www.cornerstone.co.in/








Here we unveil some of the best family business practices which can help a family

business grow. Take a look:

A Well Defined Structure For Decision Making

Identify Role Of Every Member

Board of Directors

Transition Plan For Next Generation



A Well Defined Structure For Decision Making

Absence of a well laid decision making structure often creates conflicts amongst

the family members in the organisation as everyone thinks he/she is the best

decision maker. An effective decision plan and chain of command can reduce the

level of conflict in this situation. Someone should be identified for the final

decision making to ensure proper decisions are made instead of arguments.



Identify Role Of Every Member

Often family businesses are infected with the problem of giving job roles without

understanding the skill set of the individuals and investing properly in their skills.

The role of each and every family person should be identified in connection with

the interest and skills the person possesses and thus this way they can be made

responsible for what they can do the best.



Board of Directors

It is advisable to the family business organisations to formulate a Board of

Directors which comprises of Accountants, Lawyers and other individuals of

repute. The reason for formulating a board is to have a constant guidance of

persons having knowledge of diverse fields. Their feedback about the direction of

the company can be used for framing future plans and objectives for the company.

Also, they can review the business on quarterly, half yearly and yearly basis, and

bring any wrong practice going in the business firm to the table.



Transition Plan For Next Generation

The family businesses are passed on from one generation to another and thus it

becomes the responsibility of the present generation to make the transition

smooth. For this, the next generation needs to be made understood what is

expected from them and what needs to be done to take the business to new

heights.


A Look At The Greatest Family Business Practice

Education

Transcript of A Look At The Greatest Family Business Practice