ISBInsight is the Flagship Research Periodical of the Indian School of Business
Navneet Bhatnagar and Professor Kavil Ramachandran of Indian School of Business (ISB) wrote this case that highlights the challenges faced by Mumbai based logistics firm Ketan Logistics Limited, a family-owned business. Emerging changes in the transportation industry and shrinking margins called for newer initiatives and processes. The greater challenge, however, came from within the group. The conflict between the aspirations …
Read More »Family businesses have been known to significantly contribute to most major economies all across the world. Yet, the majority of family firms fail to sur vive beyond three generations. Professionalisation of management is one of the decisive factors for family firms’ long-term survival. Professionally managed firms tend to be larger, more productive, grow faster, and have higher survival rates. However, …
Read More »Case Summary Dr K. Anji Reddy founded Dr Reddy's Laboratories Ltd (DRL) in 1984. Since then, the company has grown to become one of the largest pharmaceutical companies in India. The company professionalised early on, and over the years, the family members defined and refined their roles for the efficient and effective running of the company. Dr Reddy passed away on …
Read More »When India became independent in 1947, few business ‘houses’ like the Tatas, the Birlas, the Mafatlals and the Walchands had substantial controlling power on the entire economy, due to their sound financial position and diverse activities. Though, none of them had a monopoly in any industry (Chaudhuri, 1972). The period from 1947 to 1990 was characterized by high tariff rates, …
Read More »While this is so, academic institutions lagged in identifying and recognizing the contribution of family-controlled businesses. Moreover, there was hardly any effort made to study the challenges, such as governance and professionalization, they faced and solutions thereof. Many paid heavy price on both, family and business fronts. A need was felt to have a high quality academic institution to fill this …
Read More »Infosys has opened a fresh chapter with the appointment of a new CEO. Hopefully the veterans on the board and the founders have learned some lessons from the recent episode. The iconic Tata group with a star-studded board also paid a huge price in several ways before settling down for an insider as the new chairman. The distasteful episodes played out in …
Read More »Why do growth-oriented family businesses hit a grid lock, like a super speeding car getting caught in a traffic jam at a crowded multi-point road cross? Fundamentally, growth-oriented family businesses have a rich supply of resources, such as entrepreneurship, funds, industry insight, social network and emotional support. What should such well-led family businesses that maintain steady high growth do to …
Read More »Many of Indian family-owned businesses have moved a long distance from the days when they believed that the companies they ran are pieces of a cake that must be shared equally by all members of a family in a strictly private celebration. There are indeed several shining examples of family-owned companies who have successfully adopted the principle of separating management …
Read More »Family businesses are known to have unique competitive advantage over professionally managed firms. Habbershon and Williams (1999) suggest that this competitive advantage is derived from the ‘familiness’ of the business – i.e. a bundle of resources that are distinctive to the firm as a result of the owning family’s involvement. The controlling family’s shared beliefs, practices, policies, philosophies and doctrines …
Read More »Less than 30 percent of family businesses survive into the third generation of family ownership. Family businesses can go under for many reasons, including family conflicts over money, nepotism leading to poor management, and infighting over the succession of power from one generation to the next. Executive Director of Thomas Schmidheiny Centre for Family Enterprise at ISB, Professor Kavil Ramachandran …
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