Family Business Family Busine Business ss
Structural Click to edit Definition Ma ster subtitle style Master “Ownership control by the members of a single family” – Barry (1975)
Family Business
Process Pr ocess Definition “ Interaction between family and business organisation that determines the nature and uniqueness of the business’ - P. Davis
(1983)
Types of family business in India
A family owned business
A family owned and managed business
A family owned and led company
Importance of family business
According to William T.O’ Hara, reported in Family Business Magazine,
Over 75 per cent of all registered companies in the industrialized world are family businesses(OECD)
One-third of Fortune 500 has families at their helm
70% of firms in U.K are family owned
Contd.,
Of Italy’s 100 top companies 43 are family owned
Family companies employ about 50-60 per cent of the workforce in the industrialized world
Companies with founding family participation performed better than nonfamily businesses ( study of Standard & Poor’s 500)
Some of the Largest Family Businesses worldwide
Wal-Mart (USA, revenues $245 billion, Sam Walton family)
Samsung Group (south korea, revenues $98.7 billion, Lee family)
Flat Group (Italy, revenues $54.7 billion, Agnelli family)
Tata Group ( India, revenues $ 7.9 billion, Tata family)
Contribution of FB in india
The freedom movement
Sprit of entrepreneurship
Philanthropy
Trust lowers transaction costs
Small, nimble, and quick to react, and
Information as a source of advantage
Three Components of family governance
Periodic assemblies
Family council meeting
A family constitution
“3- Circle” model of FB system
Family
Ownership
Business
Ingredients for a healthy FB –good governance
Clarity on roles, rights, and responsibilities for all members of the three systems
Discipline to help members of the family, business employees, and owners act responsibly
Regulating appropriate family and owner inclusion in business discussions
Policies of a family council
Employment standards for the next generation
Career development policies for family employees
Family employee compensation
Succession process, including retirement ages
Ownership including buy-sell agreements; and
Dividends
First Family Succession Plan, then Business Succession Plan
Strategies to put business interests ahead of the family interests
Emphasize merit over family position
Describe the role of the owner in the transition stage- will continue to work FT/PT or retire
Family dynamics- some family members unable to work together
Contd.,
Income for working members of the family of the family and shareholders
The business environment during transition
Treatment of loyal employees
Tax consequences
Pitfalls of the FB
Lack of focus and strategy
Nepotism in family
Lack of Professionalism
Inability to separate the family’s interest from
the interest of the business
Sibling rivalry in the family business
How to save the FB?
Formulate policy framework and rules
Families must serve the business
There should be future outlook
Family members should be accountable
Issues should be addressed
Create shared vision
Women Entrepreneurship
“ an enterprise owned and controlled by a women having a minimum financial interest of 51 per cent of the capital and giving at least 51 per cent of the employment generated by the enterprise to women” - Government
of India
Factors Influencing Women Entrepreneurs
Economic independence
Establishing their own creativity
Establishing their own identity
Achievement of excellence
Building confidence
Developing risk-taking ability
Motivation
Equal status in society, Greater freedom and mobility
Challenges in the path of Women Entrepreneurship
Lack of Confidence
Problems of Finance and Working Capital
Socio-Cultural Barriers
Production Problems
Inefficient Marketing Arrangement
Institutions Supporting women entrepreneurs in India are
Consortium of women entrepreneurs in India (CWEI)
Federation of Indian women entrepreneurs (FIWE)
Federation of Ladies Organization (FLO),
Women’s India Trust (WIT)
Central Bank of India Credit Schemes
NABARD,SIDBI,
Contd.,
Self-Employment Women Association(SEWA)
Association of Women Entreupreneurs of Karnataka(AWAKE)
Profile of some successful women entrepreneurs in india
Kiran Mazumdar Shaw- Biocon(1978)
Shahnaz Hussain- Ayurvedic cure&care
Ritu Kumar- (1960) Country’s leading designer in buildings, garments, fabrics and accessories