Dr Navneet Bhatnagar: Merck has had a very long and successful journey that is inspiring for other family businesses. Let us start with the business and then move on to the family aspect. Please tell us about the early history and growth of your business. Essentially, when and how it all began and gained momentum?
Professor Dr Stangenberg-Haverkamp: Yes, in 2018 …Read More »
Merck, the oldest pharmaceutical and chemical company in the world, was founded in 1668 in Darmstadt a small town in Germany. The Merck family, with 156 family shareholders continues to own 70 per cent of the company and determines its strategic direction. Merck was criticised for organisational complexity on account of its 70 divisions and for making large, capital intensive …Read More »
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 »
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 …Read More »