Togetherness in Indian family businesses

Kavil Ramachandran, PhD

Family business - Kavil

Kavil Ramachandran, PhD, Thomas Schmidheiny Chair Professor of Family Business and Wealth Management, Indian School of Business, shares the findings of a recent study on ‘Togetherness in Indian family businesses,’ during a brief interaction on February 26, 2014.

Changing society

• Indian society is changing rapidly.• The meaning of being together within families

is varying.• Reasons: Individualism, aspirations,

opportunities.

Break up

• Business families break up, and get into trouble, sometimes painful, when togetherness is destroyed.

Study

• To understand what they mean by being together, we received 276 responses from Indian business families.

Conclusions

There are 3 dimensions of togetherness:• Familial (emotions, celebrations, ceremonies –

non economic).• Business and operations (involving power,

money, opportunities).• Trans-generation (starting new ventures,

inheriting shares).

When family members do not communicate well

• That leads to assumptions• Which in turn cause differences, and• Ultimately result in destruction.

Remedial measures

• Families have to sit down and discuss policies required, to improve the quality of togetherness, by appreciating these dimensions.

• This is particularly relevant to Indian context, where we assume that the elements of joint families are still in place.

Also…

• Do not take togetherness in families for granted. Have a family shared goal. Pay attention to family governance.

• Appropriate business structures are needed. Develop mechanisms to manage exits.