Explain the status of family business enterprise in india
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A family business is a commercial organization in which decision-making is influenced by multiple generations of a family — related by blood or marriage or adoption — who has both the ability to influence the vision of the business and the willingness to use this ability to pursue distinctive goals.[1][2] They are closely identified with the firm through leadership or ownership. Owner-manager entrepreneurial firms are not considered to be family businesses because they lack the multi-generational dimension and family influence that create the unique dynamics and relationships of family businesses.
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In India, family businesses range from the small mom-and-pop store (or kirana) to large
conglomerates with equally varied business interests. As their growth has skyrocketed,
many have stepped outside their zones to acquire companies in new industries and
geographies. Their contribution to India’s growth is also being increasingly recognised.
Though family businesses have always been in India, managing them has its own unique
challenges:
• Managing the diverse opinions of family members in the business, solving internal
issues and disputes, etc
• Creating clear succession plans between siblings or cousins
• Difficulties the younger generation may face in proving themselves to the former
generation
• Differing views between the older generation and the newer generation
• Hiring external staff which may perceive that career advancement, freedom and
decision-making are solely the purview of family members
• Regular and streamlined access to the capital to help grow and develop the business
The results of PwC’s Family Business Survey 2012 reveal that family firms are robust,
vibrant and successful. Being highly ambitious and entrepreneurial, they are delivering
solid profits even in an uncertain economic environment. These businesses are making
a substantial contribution to the growth of the Indian economy, and hence expect the
government to offer a more targeted support (eg: access to capital, expediting approvals,
clarity in some tax issues, greater predictability, etc). However, family firms can do
more to help themselves, first by adopting professional processes and practices of their
publicly listed corporate competitors, and second, by being more proactive in finding
and securing the assistance they need.
Family business has been as common in the Indian economy like elsewhere in the world, it is perceived in a common sense. Various terms like ‘family-owned,’ family controlled,’ ‘family managed,’ ‘business houses,’ and ‘industrial houses’ are used to refer to family business.
Thus, the term family business conjures up different meanings to different people. While some view it as traditional business, others consider it as community business, and still others mean it as home-based business.
conglomerates with equally varied business interests. As their growth has skyrocketed,
many have stepped outside their zones to acquire companies in new industries and
geographies. Their contribution to India’s growth is also being increasingly recognised.
Though family businesses have always been in India, managing them has its own unique
challenges:
• Managing the diverse opinions of family members in the business, solving internal
issues and disputes, etc
• Creating clear succession plans between siblings or cousins
• Difficulties the younger generation may face in proving themselves to the former
generation
• Differing views between the older generation and the newer generation
• Hiring external staff which may perceive that career advancement, freedom and
decision-making are solely the purview of family members
• Regular and streamlined access to the capital to help grow and develop the business
The results of PwC’s Family Business Survey 2012 reveal that family firms are robust,
vibrant and successful. Being highly ambitious and entrepreneurial, they are delivering
solid profits even in an uncertain economic environment. These businesses are making
a substantial contribution to the growth of the Indian economy, and hence expect the
government to offer a more targeted support (eg: access to capital, expediting approvals,
clarity in some tax issues, greater predictability, etc). However, family firms can do
more to help themselves, first by adopting professional processes and practices of their
publicly listed corporate competitors, and second, by being more proactive in finding
and securing the assistance they need.
Family business has been as common in the Indian economy like elsewhere in the world, it is perceived in a common sense. Various terms like ‘family-owned,’ family controlled,’ ‘family managed,’ ‘business houses,’ and ‘industrial houses’ are used to refer to family business.
Thus, the term family business conjures up different meanings to different people. While some view it as traditional business, others consider it as community business, and still others mean it as home-based business.
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