CU-MCOM-SEM-III-Family Business Management

UNIT - 14 RECENT TRENDS IN FAMILY BUSINESS STRUCTURE 14.0 Learning Objectives 14.1 Introduction 14.2 Emerging Challenges in Family Business 14.2.1 Lack of Succession Planning 14.2.2 Sibling Rivalry 14.2.3 Women of the Family Joining the Family Businesses 14.2.4 Attracting and Retaining Non-Family Employees 14.2.5 Internal Family Conflicts 14.2.6 No Separations of Emotions and Business 14.2.7 Biased Decision Making 14.2.8 Raising Capital 14.2.9 Lack of Training to Family Members 14.2.10 Lacks Talent 14.2.11 Lack of Communication 14.2.12 Absence of Written Document 14.3 Summary 14.4 Keywords 14.5 Learning Activity 14.6 Unit End Questions 14.7 References 14.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  State the Emerging Challenges in Family Business.  Explain the challenges of Women Joining the Family Businesses.  Examine the Lack of Communication. 251 CU IDOL SELF LEARNING MATERIAL (SLM)

14.1 INTRODUCTION Family controlled organizations are the organizations that are under the proprietorship and, much of the time, the executives too of a solitary organizer proprietor or family, that is, close relations. Privately-owned companies structure a significant and vital portion of numerous countries all throughout the planet. Somewhere in the range of 65 and 80 percent of the organizations on the planet are assessed to be family firms. Surviving writing on privately- run companies exhibits that this model of hierarchical construction and proprietorship is very well known across the world, including North America, Europe, and Asia. Internationally, privately-run companies make a significant commitment to the GDP of economies, securities exchange capitalization and work. Contingent upon the nation of beginning, privately-run companies might represent 20–70 percent of the greatest organizations internationally. India has a rich business history and the conventional type of firm possession in India has been founded on families. Countless organizations are yet being controlled and overseen by families. Even though family firms in India are huge supporters of the nation's development, they have confronted genuine contest since the progression of the Indian economy in 1991, from the worldwide monsters. In this way, the Indian privately-owned companies confronted another climate and the privately-owned companies that were proactive and adaptable in their methodology had the option to endure and prosper in the new business climate in India, though others couldn't withstand the pressing factor of the recently made opportunity and neglected to become pioneers in their field. It has been seen that exploration on Indian privately-owned companies, especially on their monetary presentation, doesn't seem, by all accounts, to be altogether proportionate with the predominance of privately-owned company in India and their significance and effect on the Indian economy and business situation. In this reference, it is appropriate to figure out how family firms in India have been performing after advancement and furthermore contrast their exhibition and non-family peers. We study the organizations remembered for the NSE 500 Index for the period 2014–2018 and attempt to discover the monetary exhibition of family firms in contrast with their partners. In the following segment, we notice the potential purposes behind this presentation and the approaches to beat the issues looked by family firms. In conclusion, we talk about certain models from Indian privately-owned companies that fused the necessary changes in their business examples and rose higher than ever. A report by The World Federation of Exchanges on family firms expresses that family firms overwhelm the business scene across both created and creating economies. They represent more than 50% of GDP and work in many business sectors and reach from miniature undertakings to probably the greatest recorded organizations in the whole world. As a critical hierarchical mode, privately-run companies cover more than 66% of organizations in East Asian countries, around 44 percent of the huge organizations in Western Europe and 33% of the Standard and Poor 500 record organizations in the United States. Privately-run companies structure an extensive and pivotal section of the US economy as they add to 62 percent of 252 CU IDOL SELF LEARNING MATERIAL (SLM)

absolute work, dedicate 64% of the GDP and produce 78% of new position creation. All things considered; a few examinations have assessed that around 80–90 percent of the US firms are family controlled. Various examinations propose that all through Europe relying upon the country, privately-run companies address somewhere in the range of 55–90 percent of organizations. As per the European Family Businesses study, privately-owned companies are the pith of the European economy, with more than 14 million organizations utilizing more than 60 million individuals in the private area and EU privately-owned companies address a turnover of more than one trillion Euros, more than 9% of the European GDP. Privately-run companies are very conspicuous in Asia additionally, especially among the bigger firms and a great deal of them have advanced into aggregates comprising of a few free firms. Privately- run companies in China address more than 90% of the complete non-public possessed endeavours and these organizations contribute around 60% to the GDP. Seven out of the ten most seasoned organizations on the planet are from Japan and it has the most noteworthy centralization of old privately-owned companies by any action like GDP, populace, and landmass. Deloitte research reports that family firms establish 85% of all out organizations in India and furthermore contribute a plentiful portion of work and homegrown yield. A Business Today article as cited in this Deloitte research report expresses that privately-owned companies add to 18 percent of India Inc's resources, 25% of deals, 37% of stores and 32 percent of benefits after charge. 14.2 EMERGING CHALLENGES IN FAMILY BUSINESS A family possessed business is any business wherein a larger part of the proprietorship or control exists in a family. Family is one of the most seasoned enduring social framework and privately-run company is the most seasoned enduring financial framework. Privately-owned companies exist all around the world for quite a long time. 80% of the world business is constrained by families. Privately-owned companies establish the biggest size as far as proprietorship contribute important to the gross public item (GNP), absolute mechanical work and complete fares of the country. The world's most established privately-run company is a development organization named 'KongoGumini' of Japan established in 578 AD and is presently overseen by the 40thgeneration. Some of biggest privately-owned company firms overall are WAL – Mart (USA) – Sam Walt man Family, Samsung Group (South Korea), Foxconn (Taiwan) and Tata Group (India) India partakes in a rich and radiant history of privately-owned company. Families like Tata, Birla, Goenka, Murugappa, Bajaj, Modis, Bangurs, Mafattals, Godrej, Wipro, Ambani are making do since multiple ages effectively Long-haul responsibility, family holding, unwaveringness towards clients and workers, social character, hands on preparing experience, hazard taking limit, quick dynamic, regard for ages and family culture are some provisions of privately-run companies in India. 253 CU IDOL SELF LEARNING MATERIAL (SLM)

14.2.1 Lack of Succession Planning Indian privately-run companies are confronting significant test of progression arranging. Progression implies change starting with one age then onto the next. It implies change of authority. It additionally includes set of intense subject matters, tolerating new liabilities, change of authority issues. It is an upset where the way of life of the association is rebuilt by the future, who carries with them ground-breaking thoughts regarding how business ought to be run, how to foster new working practices, new staff, new loyalties and so forth So progression addresses a significant change with the fortunes of the firm laying on how effectively it is to be arranged. Commonly because of absence of progression arranging it breaks privately-run company causing to vulnerability among staff, providers, clients, and family. 14.2.2 Sibling Rivalry One of the best test privately-run companies’ faces is kin competition. This happens mostly due to partaking in the privately-owned company all individuals get. This happens especially when the business begins thriving and growing once again the period. Contention with one another regularly sums to pull each other down at the expense of the hierarchical assets. It prompts sensation of treacherous and unnecessary favouritism contention isn't settled well on schedule; it might prompt split in the privately-run companies e. g. The kin competition of Ambani Brothers annihilated their entire privately-run company. As per Ravichandran privately-owned companies are found to separate like single adaptable cell as they develop and not many of them make do past three ages. 14.2.3 Women of the Family Joining the Family Businesses Indian privately-owned companies are yet male overwhelmed. Presently a day the job of ladies in the business and utilizing ladies is to a great extent acknowledged and supported in India. At whatever point the issue of ladies in the privately-owned companies is raised she needs to adjust between her obligations at home and her obligations at work. Presently this colossal wellspring of ability ought to be appropriately tapped by the privately-owned companies. 14.2.4 Attracting and Retaining Non-Family Employees Non family representatives may likewise experience issues in acclimating to the privately-run company culture. They are utilized to work in organized professional workplace. In privately- run companies there are restricted freedoms for development and progression since family workers possess all administrative role inside the business. 14.2.5 Internal Family Conflicts Commonly privately-run companies are confronting inner contentions because of fluctuated interest of every relative, individual consciences, individual competitions that upsets business 254 CU IDOL SELF LEARNING MATERIAL (SLM)

congruity. The interest of a relative may not be lined up with the interest of the business or the interest of the whole family may not be offset with the interest of their business. 14.2.6 No Separations of Emotions and Business It is extremely challenging undertaking to isolate feelings from privately-owned company. In case there is obstruction of feelings in business, sound business choices will not be made and will upset representatives and clients also. There ought to be correct equilibrium of feelings dependent on the elements of privately-owned company. 14.2.7 Biased Decision Making In a privately-run company larger part choices are taken which are one-sided and not reasonable for non-family representatives. More significant salary scale is given to family representatives dependent on family relationship as opposed to on their capacities and abilities. Ordinarily non-family representatives free the inspiration and interest to work with the privately-run company. 14.2.8 Raising Capital There are restricted choices for raising assets from outside sources to privately-owned companies as contrast with public restricted organizations. Because of restricted assets of raising assets, endurance and sound development of the business can be compromised. 14.2.9 Lack of Training to Family Members In numerous privately-run companies there is no preparing is given to relatives who join business as freshers. Due to absence of preparing relatives who join the business don't know about objectives of the association, assumptions, development, and abilities set needed to run and hold the business. 14.2.10 Lacks Talent Section in the privately-run company is permitted to any relatives, even though he isn't qualified or does not have what it takes and capacities to maintain the business. 14.2.11 Lack of Communication There is consistently poor and miscommunication between relatives. Because of this there is continually blending of family issues with business issues. There ought to be appropriate correspondence channel between relatives who join the business and other relatives. 14.2.12 Absence of Written Document There is not any unmistakable composed archive in numerous privately-owned companies which will characterize the job and obligations of every relative, arrangements and business standards for relatives. Issues like pay rates, portion of benefit, profit, pay and retirement plan, leave strategy from the business are constantly brought and makes struggle up in the 255 CU IDOL SELF LEARNING MATERIAL (SLM)

business because of absence of any composed reports. At last, it upsets the family just as business amicability. Measures to overcome family business challenges and problems  Family Constitution - It is a composed record which traces the family's qualities and pre-concurred rules for how relatives can take part and be perceived in the privately- owned company.  Developing a Succession Plan – Progression plan is perhaps the biggest test looked by privately-run companies and much of the time its interaction is stood up to. Progression turns into an issue when the senior age doesn't permit the lesser age vital space to develop viably. It incorporates objectives for the progression interaction, schedule of change stage, alternate courses of action if there should be an occurrence of unexpected occurring. Preferably a privately-run company should start the interaction of progression arranging 10 years or more before in the occasion. Picking a replacement choice should be founded on capability paying little heed to relational intricacies.  Family Gathering and Get Together – There are part of chances for the family to have get together for example occasions, birthday events, commemorations, unique occasions, and ends of the week in the late spring home, going for film, games, festivity of celebrations and so on These social events help to guarantee that feelings are delighted inside the family and that business isn't utilized as the field for the satisfaction of these requirements. This assists with adjusting and reinforce family relations and family holding.  Appointing an outside Board of Advisors– To succeed clashes in the business arrangement of autonomous outsider as counsel who will go about as unprejudiced arbiter. This keeps up with balance among family and business clashes.  Training - Association ought to have the office of directing exceptional planned preparing programs when any relatives enter in the association. This preparation ought to give explicit data that identified with authoritative objectives, assumptions, and commitments of the situation in the association.  Free and open communication – There ought to be in every case free and open correspondence among relatives to examine family and business issues. In case there is solid correspondence, it won't upset family and business climate. It will keep up with solid work balance among family and business. Shows – The shows offer a decent chance for the cutting-edge family to acquaint with the new and arising difficulties that a family should meet.  Family Council – The family board shields attachment solidarity and coherence of the family. The reason for the family board is to keep family's friendly liability support 256 CU IDOL SELF LEARNING MATERIAL (SLM)

the family's way of life and customs and help the relatives with training and self- awareness. Impact of Family Involvement in Management on Firm Performance The job of relatives in the administration and their effect on the association's presentation shows complex and blended outcomes. A few investigations show that recorded firms oversaw by relatives as CEOs have a positive relationship with an association's monetary presentation. Villalonga and Amit affirm that in a family firm when the author capacities as the CEO or as the Chairman with a non-family CEO, then, at that point the family association's worth will undoubtedly increment with the presence of family the executives. Then again, assuming relatives fill in as Chairman or CEO, it reduces the association's worth. Cucculelli and Micucci in an example of Italian firms reasoned that there is an adverse consequence on an association's exhibition due to keeping up with the board inside the family and that the company's presentation with originator CEO is better compared to after progression by the organizer's beneficiaries. Poutziouris et al. in an examination on UK organizations reason that the presence of family people in administration likes the family firms' presentation across the ages. The job of outcasts, that is, the capacity of a recruited proficient CEO is again questioned, as it showed either an unimportant or a positive relationship with the market execution. Subekti and Sumargo in an example of Indonesian firms expressed that family the executives contrarily impact a company's presentation as a ton of family firms are overseen by relatives who are deft and wasteful. Gill and Kaur in their example of Indian family firms reported that family inclusion in administration is related with higher monetary execution. Then again, Bhatt and Bhattacharya on his example of India firms expressed that family the executives are unessential to the firm worth and execution. Consequently, various investigations are giving a blend of results. Comparison of the Performance of Family Firms and Non-Family Firms Privately-run companies have been a discipline of scholastic examination for a critical period in different nations. A portion of these examinations centre around the worries and hindrances that privately-run companies face when contrasted with organizations where control and value are held in a more differentiated example. Likewise, a few examinations that attention on family firms perform better when contrasted with non-family firms. Their lower office costs, long haul obligation to the business, farsighted speculation, shared family desires and values and better friendly connections and corporate culture make them more brief than non-family firms. At long last, a few investigations set forth no critical differentiation between the family and non-family firms. Bits of proof from the United States, Germany, France, United Kingdom, China, and Japan affirm that family firms are better on both bookkeeping and market execution measures. In the Indian setting, there is not so much exact but rather more expressive exploration on the correlation of the family and non-family firms' exhibition. 257 CU IDOL SELF LEARNING MATERIAL (SLM)

Family-Owned Businesses in India Writing survey shows that reviews on family-maintain organizations' presentation seem, by all accounts, to be very scant in India. This is somewhat alarming given the breadth of such organizations in India. The Deloitte Research Report states that family firms comprise 85% of complete organizations in India and furthermore contribute a plentiful portion of work and homegrown yield. There have been not many investigations of the Indian privately-run companies and business families. Besides, there are restricted examinations on Indian family firms and their exhibition. Ramachandran features that in India investigation of family- claimed organizations stays a black box and considerably very little is thought either about the elements prompting effective progression of family firms in India or their endurance rate. It has been seen that most examinations on Indian family-controlled firms would in general zero in on non-monetary boundaries and qualities, with somewhat lesser consideration regarding monetary information. Indian history has been directed by privately-owned company bunches since Independence in 1947. In the proper area, Indian families had most of the Indian assembling at the hour of Independence and these families had sustained their organizations—for instance, Birla, Tata, Thapar, Sahu Jain and Shingania Families. After freedom, the Indian government took a communist remain on speculation, and the Industrial Policy Resolutions of 1948 and 1956 saved a great deal of enterprises for the state area. The degree of exercises for the private area was limited by the public authority by forcing high import standards, high obligations, and licenses, making imports exceptionally costly. In 1969, syndication enactment further interfered with augmentation of limits, and furthermore restrictions were presented on unfamiliar ventures. Further, during the 1970s, private- possessed ventures greater part of which were family controlled around then, were put through retrogressive strategies to limit extension of private riches. Manikutty focuses that the period somewhere in the range of 1970 and 1990 delivered the Indian ventures wasteful and unsuitable for worldwide norms. In 1991, the kick-off of the Indian economy and decrease of government control, permit, quantities, obligations, and limitations on FDI to an exceptionally low level, lead to a heightening in the degree of unfamiliar speculations, imports and, rivalry for Indian firms. Accordingly, the Indian privately-owned companies confronted another climate and the privately-owned companies that were proactive and adaptable in their methodology had the option to endure and prosper in the new business climate in India while others couldn't withstand the pressing factor of the recently made opportunity and fizzled. Reasons for Family Firms Lagging and Ways to Cope up The above segment shows that regardless of the predominance and meaning of family firms in the Indian economy, they don't appear to perform better compared to their non-family partners. This could be because of an assortment of reasons. The invaluable situation of a 258 CU IDOL SELF LEARNING MATERIAL (SLM)

family in the business can have certain repercussions for the business. For example, privately-owned companies can endure when there are a few antagonistic family investors whose votes empower them to drop each other's drives. With the death of ages, the potential for struggle among the controlling family increment due to the increment in the quantity of family members. Family clashes can prompt a high pace of disappointment among privately- owned companies and are the motivation behind why a ton of privately-run companies can't proceed with their activities past two–three ages. In some privately-owned companies, the controlling family partakes in an unbalanced portion of control when contrasted with its real responsibility for. This can occur in case there are unique sorts of offers that give control little possession or by the utilization of holding organizations for pyramiding purposes. Thusly, it becomes basic to talk about the potential explanations behind family firms slacking in India and measures to defeat them and work on their presentation. Bhattacharyya and Ramachandran and Bhatnagar have talked about the difficulties looked by the Indian privately-owned companies finally. The absolute most significant reasons have been talked about beneath: Implications of the Study and Lessons for New Business Ventures It has been now seen that privately-run companies assume a significant part in the development of the Indian economy. Albeit the writing likewise calls attention to that the greater part of the privately-run companies across the globe can't overcome the third era for a scope of reasons. Hence, this examination on the presentation and difficulties looked by these organizations becomes basic to give a brief look at the Indian privately-run company situation and further recognize the means to be taken to guarantee that they get by past three ages. Given the significance of family firms in India, this examination thinks about the exhibition of family and non-family firms in the Indian setting. As examined in the paper, family firms have certain remarkable qualities and difficulties, along these lines, this correlation is critical as it gives a preview to the new business visionaries to assist them with choosing the sort of hierarchical construction they need to have for their new undertaking as they develop. The discoveries of the examination show that family firms don't appear to perform especially better compared to their non-family partners. However, it ought to be noticed that the consequences of studies on the correlation of family and non-family firms can be affected by an assortment of components, viz., the meaning of a 'family firm' used to contemplate the examination, regardless of whether the investigation depends on private or public firms, firm size, the presentation factors utilized, the way of life of the country in the investigation, and so on The momentum study doesn't think about every such factor and this gives extension to additional exploration on the point. Further, the writing on privately-run company generally focusses on the difficulties that privately-run companies experience when contrasted with organizations where control and 259 CU IDOL SELF LEARNING MATERIAL (SLM)

value are held in a more enhanced example. The current investigation makes an endeavour to feature the actions that such types of business associations need to adjust to defeat these difficulties. This may help in giving certain learnings to new undertakings. In this segment, we have examined the exercises that some Indian family firms can offer to the new undertakings by setting a model in effectively dealing with the issues looked by a family firm and leaving an imprint in the Indian and the world business situation. These business houses have set a norm and shown a way to other business families to gain from them and develop their business across ages. The accomplishment of a privately-run company is a consequence of their enterprising, ardent, and aggressive outlook which gives powerful benefits even during monetary interruptions. Family firms can endure and succeed over an extensive stretch in view of their drawn-out mentality on ventures and benefits alongside strong enterprising drive and pizazz for development. A model is Apollo Hospitals, established during the 1980s by Dr P. C. Reddy, that has developed a significant upper hand through innovative progression. They have an advancement division that supports novel thoughts, and the representatives are buckling down with advancement labs in the United States, Israel, and India to stay aware of the new improvements all throughout the planet. This has empowered them to contact a lot more individuals and develop effectively. New undertakings can gain from such effective family firms and fuse the way of life of strength, enterprising energy, creativity, and solid responsibility. Various privately-run companies in India don't last past two–three ages. The principal justification this is the absence of appropriate progression arranging and family administration set up. A family can guarantee the coherence of its business across ages with appropriate administration components in the family. The popular quarrel between the Ambani siblings for control prompted different families into contemplating making their family constitution on schedule. Following this, the GMR bunch, set up in 1978, and perhaps the most differentiated foundation associations in the country made a definite progression plan, set of accepted rules a lot for passage, and exit of each relative into the business. This offers figuring out how to the new privately-owned company dares to have legitimate progression and administration instruments set up by having a visionary initiative and proficient administration. Obliging external expert administration in family firms is very difficult because the inclination is for the administration to comprise of individuals from the controlling family. This unquestionably limits the accessible administration ability pool, with unfavourable ramifications for the company's exhibition. Following a hundred years of effectively running and overseeing Dabur Ltd., the Burmans had understood that the intricacies in dealing with the family were ascending since it had filled in size. The relatives then, at that point understood the need to professionalize the administration for Dabur to develop quickly. They comprehended that it was important to keep the top positions empty to draw in the best 260 CU IDOL SELF LEARNING MATERIAL (SLM)

administrative ability. Twenty years after the family chose to professionalize their business, it is developing dramatically, and the family is unified. From such instances of fruitful organizations, new family firms can figure out how to be versatile as indicated by the necessities of the venture and stay proficient in their working. 14.3 SUMMARY  The presence of privately-run companies among the business associations on the planet is at huge levels. An assortment of perspectives has been introduced by the current writing about family-maintain organizations' exhibition in contrast with their partners. These shift from privately-owned companies being better entertainers to the differentiating aftereffects of them failing to meet expectations and confronting difficulties when contrasted with their non-family peers.  Family organizations clearly assume an incredible part in the Indian business situation and the Indian economy. The writing additionally features the situation with privately- run companies in India since autonomy, some special elements of Indian privately-run companies, and the difficulties looked by them as underlined in past examinations. In this paper, we endeavour to see if or not family firms perform better compared to non- family firms in the Indian setting given their commonness and significance for the economy.  We examined the organizations remembered for the NSE 500 Index for the period 2014–2018. The outcomes show that in the Indian setting there is by all accounts no critical contrast in the exhibition of family and non-family firms when we consider bookkeeping based proportions of execution, while non-family firms appear to perform better when we consider the market-based proportion of execution. We have referenced the potential explanations behind this exhibition and the approaches to defeat the issues looked by family firms. Ultimately, we examine the counsel and proposals that the new undertakings can take from effectively settled fruitful privately-run companies.  However, it should be noticed that the execution of the counsel given to family-run organizations on the best way to overcome their weaknesses and endeavour to be world players probably won't be simple. This is on the grounds that family esteems, customs and customs are profound established in family firms. They think that it’s difficult to fix what is recognizable to them and make changes in their business examples and customs.  There are some business families in the country that didn't accomplish the necessary outcomes by isolating proprietorship from the board and had to get back to the more established request as the division prompted a decrease in family fortunes. Such 261 CU IDOL SELF LEARNING MATERIAL (SLM)

things make other business families likewise anxious of such changes. The inquiry with respect to what is best for the Indian privately-run companies proceeds.  Family business individuals ought to discover that no age isn't right except for every age has various abilities and culture. When families will comprehend about these progressions and need to see the value in alternate points of view whether youthful or old, they will want to amicably work with experts and across ages. Parent ages need to acknowledge the contribution of new age. The cutting edge needs to figure out how to see the value in guardians' insight and comprehend that there is not a viable replacement for difficult work. Accordingly, if privately-run companies can deal with these elements, they will have extraordinary scope of chances in Indian economy.  Currently, privately-run companies are genuinely predominant in India and assume a noticeable part in the country's business situation. These Indian privately-owned companies are not just sole ownerships and little to medium-sized firms; all things considered; they incorporate an enormous number of openly recorded organizations too. Given their pervasiveness in the district, their significance to the economy, their bearing on key administration hypotheses, just as the absence of earlier observational examination around here, this specific investigation on the similar execution of Indian privately-run companies can possibly not just make a critical commitment towards understanding this wonder, yet additionally call attention to the best approach to direct more nitty gritty exploration on Indian privately-owned companies. This investigation depends on organizations recorded in NSE 500 Index for the period 2014–2018.  It has been seen that exploration on Indian privately-run companies, especially on their monetary exhibition, doesn't seem, by all accounts, to be completely comparable with the commonness of privately-owned company in India and their significance and effect on the Indian economy and business situation. The destinations of this paper are to concentrate how family firms are acting in India in contrast with their non-family partners; to examine the potential purposes behind this presentation and the approaches to conquer the issues looked by family firms and finally, we talk about the learnings that new undertakings can take from Indian privately-run companies that joined the necessary changes in their business examples and rose higher than ever.  The writing on privately-owned company comprises of various meanings of what includes a privately-run company. Extensively, a privately-owned company is characterized to be one that is possessed, controlled and at times oversaw by at least one relative.  A part of articles on privately-owned companies in the US and other western nations, by and large, characterize family firms as a public partnership where relatives own the firm, and its CEOs are either the organizer or his relative 262 CU IDOL SELF LEARNING MATERIAL (SLM)

 A family-claimed business might be characterized as any business where at least two relatives are included and most of possession or control exists in a family. Family- claimed organizations might be the most seasoned type of business association. Homesteads were an early type of privately-run company wherein our opinion about today as the private life and work life were interwoven. In metropolitan settings it was once not unexpected for a businessperson or specialist to live in a similar structure where the person worked, and relatives regularly assisted with the business on a case- by-case basis.  Since the mid-1980s the scholastic investigation of privately-owned company as an unmistakable and significant classification of trade has created. Today family claimed organizations are perceived as significant and dynamic members on the planet economy. As per the U.S. Agency of the Census, around 90% of American organizations are family-claimed or controlled. Going in size from two-man associations to Fortune 500 firms, these organizations represent half of the country's work and half of her Gross National Product. Privately-owned companies might enjoy some upper hands over other business substances in their attention on the long haul, their obligation to quality (which is regularly connected with the family name), and their consideration and worry for representatives. However, privately-owned companies likewise face a remarkable arrangement of the executives’ challenges coming from the cross-over of family and business issues.  A privately-owned company can be portrayed as a communication between two separate yet associated frameworks—the business and the family—with questionable limits and various guidelines. Graphically, this idea can be introduced as two crossing circles. Privately-owned companies might remember various blends of relatives for different business jobs, including married couples, guardians and youngsters, more distant families, and numerous ages assuming the parts of investors, board individuals, working accomplices, guides, and representatives. Clashes frequently emerge because of the cross-over of these jobs. The manners by which people ordinarily convey inside a family, for instance, might be unseemly in business circumstances. Similarly, individual concerns or contentions might persist into the work spot to the impairment of the firm. To succeed, a privately-run company should keep lines of correspondence open, utilize vital arranging apparatuses, and connect with the help of outside counsellors depending on the situation.  As Tracy Pearman clarifies in her Business Week article named \"Taking the Pulse of Family Business,\" two wide patterns are noticeable in the domain of privately-run company as we settle in the 21st Century. In the first place, the maturing of the time of increased birth rates age flags a coming proprietorship change for some privately- owned companies inside the following ten years. Second, increasingly more of these organizations will be taken over by ladies, proceeding with a pattern that has been 263 CU IDOL SELF LEARNING MATERIAL (SLM)

noticeable since the turn of the century. Pearman proceeds to feature a few insights about ladies claimed privately-run companies that causes this pattern towards female proprietorship to appear to be very sure. Ongoing investigations have shown, Pearman clarifies, that \"ladies possessed organizations were bound to zero in on progression arranging, have a 40 percent lower pace of relative steady loss, will in general be all the more financially traditionalist, and convey less obligation than male-claimed organizations.\" 14.4 KEYWORD  Numerous- a lot; being or existing in incredible amount: various visits; various fish. comprising of or containing an extraordinary number of units or people: Recent crowds have been more various.  Incorporated- of an organization or other association) framed into a legitimate enterprise.  Substitute - a games player designated as qualified to supplant another get-togethers match has started.  Potential- having or showing the ability to form into something later.  Apprehensive- restless or unfortunate that something terrible or disagreeable will occur. 14.5 LEARNING ACTIVITY 1. Conduct a session on Internal Family Conflicts. ___________________________________________________________________________ ___________________________________________________________________________ 2. Conduct a survey on Raising Capital. ___________________________________________________________________________ ___________________________________________________________________________ 14.6 UNIT END QUESTIONS A. Descriptive Questions 264 Short Questions 1. What is Communication? 2. Define family conflicts? 3. Define Succession Planning? CU IDOL SELF LEARNING MATERIAL (SLM)

4. Write main aim of Biased Decision Making? 5. What is Sibling Rivalry? Long Questions 1. Illustrate the recent trends in family business. 2. Explain the Lack of Succession Planning. 3. Examine the Sibling Rivalry. 4. Illustrate the Biased Decision Making. 5. Explain the Lack of Training to Family Members. B. Multiple Choice Questions 1. What is mean by communication without words? a. Object communication b. Written communication c. Oral communication d. Non- verbal communication 2. Select the right option for the statement, the person who transmits the message is called. a. Channel b. Sender c. Receiver d. Response 3. What aims at making people work together for the common good of the organization? a. Communication b. Conversation c. Combination d. Connection 4. Select the right option for the statement, at each stage in the process of communication, there is a possibility of interference which may hinder the process. Such interference is known as. a. Sender b. Receiver 265 CU IDOL SELF LEARNING MATERIAL (SLM)

c. Barrier d. All of them 5. Select the right option for the statement, normally communication is wherein the information or message is transferred from one person to another. a. Impersonal b. Interpersonal c. Personal d. Important Answers 1-d, 2-b, 3-a, 4-c, 5-d 14.7 REFERENCES References book  Merchant of Poona, July 2014, Sakal Publication,  Biryani Prakash, (2010), Bharatiya Udojika Shunya Te Shikhar, ISBN: 978-81-8907- 79-6  Bagachi Subroti, September 2011, the High-Performance Entrepreneur, Penguin Publication. Textbook references  Leaver Lindsay, (2010), Family Research Report on Family-Owned Business in India- History and Present Day  Dr. Shaikh Shahabad, December (2013), Succession Planning in Business Enterprises: Implication and Strategies for Emerging India, Journal of Advanced Research in Computer Science and Management Studies, Volume1, Issue 7.  Reuters (23 October 1983). \"AROUND THE WORLD; Greece Approves Family Law Changes\". The New York Times. Website  https://journals.sagepub.com/doi/10.1177/2632962X20960824  https://www.scribd.com/document/254763218/Family-Business  https://www.inc.com/encyclopedia/family-owned-businesses.html 266 CU IDOL SELF LEARNING MATERIAL (SLM)