The Indian family business dates back to the latter half of the nineteenth century, which also marks the beginning of business in India. It is not surprising that family run businesses currently account for a whopping 95 percent of all Indian companies. The Indian economy currently is in a state of rapid development, is burgeoning with innumerable small and medium sized family-run enterprises. In India family businesses initially stated in the 1890s as a means to promote import substitution and attain economic freedom from the British. These business enterprises were the vital part of India’s freedom struggle, and as a part of the Swedeshi movement, got special healing and subsidies from the government. Large business houses spanning three or more generations face the challenge of growth and sustenance due to different issues in family businesses. Every family business has faced or will face challenging issues. The objectives of the present study are to outline the issues involved in family businesses; to offer constructive suggestions to improve the operations of family businesses and to examine the roadblocks, strengths and weaknesses in family businesses.
CHARACTERISTICS OF FAMILY BUSINESS
The characteristics of family business are described herein below:
- Family relationship is the most important factor in determination of the position a person holds in the business.
- There is control and direct involvement of owners/families on Board room decision making processes
- A single family controls the company’s ownership;
- The controlling family’s members are currently active in top management;
- The family has been involved in the company for at least two generations or seems likely to be.
- Few castes have been very successful and thus are synonym with family-owned businesses in India. For instance, the Agarwals and Guptas in the North, the Chettiars in the South, the Parsees, Gujarati, Jains and Banias, Muslim Khojas and Memons in the West and Marvaris in the East. Of these, the Marwaris have been the most successful.
- Every caste has a very dominant culture that is followed in the business by all.
- Family ties and traditions are very deep rooted in family firms.
- Sons and male members are more likely to hold higher positions and succeed the CEO. Role of women is that of facilitator to the make members and as the mother figure to the family and employees
- Dr Jeet Singh, ,India
Head,
Department of Commerce,
Mahamaya Government Degree College, Sherkot, Bijnor – 246747 (UP)
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