Thursday, June 3, 2010

Challenges in Family Owned Business

Family based organizations are often devoid of a solid and transparent organizational culture, sans those which brought in professional hands to manage their strategic and operative affairs.The reasons are not difficult to find, on one hand the family run businesses are always willing to keep everything close to the chest of the promoters whether they are able to take the company or the conglomerate to the next level or not.Bold decisions of inducing external professionals within the rank and file of the organizations calls for a big heart and mind as the promoters should be confident of holding on to the reins, while allowing the company to benefit from a professional approach brought in by the external persons.Tata Sons, Wipro catapulting themselves into global entities after being family run businesses are exceptional cases in point.The organizations globally which were family run to start off,gradually metamorphosed into global behemoths, primarily because of the boldness shown by the promoters and the stakeholders, directly and indirectly responsible for facilitating those bold decisions.The importance of succession planning not only for the family members, but also for the smooth transition from a family owned operation to that of a professional managed one.The real clashes of thoughts may arise when the organizational culture undergoes a face-lift by the changing of hands and the actual ownership or control or even management of the company.

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