There are family firms that are owned and managed by family members and have survived many generations, like the 120-year-old, $4.1 billion in revenues, Godrej Group. There are family firms that did not survive transition of leadership to the second generation of family members like in the case of United Spirits. Vijay Mallya destroyed the socio, emotional and economic wealth created by his father Vittal Mallya.
There are family firms that professionalised the management and survived, like the Aditya Birla group and the Tata group. These firms are run by capable non-family business heads or CEOs while the strategic direction for the entire group is provided by the group Chairman, Kumar Mangalam Birla (family member) in the case of the Aditya Birla Group and Natarajan Chandrasekaran (non-family professional but a Tata group loyalist) in the case of the Tata group. Lastly, there are family firms that passed on key leadership positions to only family members and yet did well. Examples include the Reliance group, Bajaj Group and HCL group…Read more
Author: Nupur Pavan Bang, Associate Director at the Thomas Schmidheiny Centre for Family Enterprise, ISB.
Source: This article is extracted from Deccan Chronicle dated October 04, 2017.