SUBJECT – BUSINESS ETHICS AND CORPORATE

GOVERNANCE

TOPIC – FAMILY OWNED BUSINESS ,GROUP NO – 5

MEMBERS-

MANSI BHOIR , 2411605

SUHANI CHANDRAMORE , 2411609
JAGDISH GOWDA , 2411615
SHRADDHA KORI , 2411625
VAISHNAVI MATH , 2411630
MERCY BENNISON , 2411635
SHRAVANI SATAM , 2411645
Family Owned Business
Family owned business are the backbone of
economies. They are often characterized by
many
their strong to their communities, their long-
commitment
term vision, and their dedication to their family
members.
Definition of Family Owned
Businesses
A Family Owned Business is a business in which one or more
members of one or more families have a significant ownership
interest and significant commitments towards the business'
overall well- being.
 Characteristics

1 Clearly Defined Roles 2 Embrace Change

Each family member understands their Adaptability is crucial for survival. These
specific responsibilities, ensuring businesses are often quick to adjust to market
smooth operation and clear lines of shifts and technological advancements.
accountability.

3 Close Financial 4 Shared Vision and Goals

Monitoring Family members align their personal goals
Financial stability is paramount, and family with the business's overarching vision,
members actively oversee financial driving collective effort toward shared
performance to make informed decisions. success.
Importan
ce
Employment Economic Development
They are significant They stimulate innovation and
employers, contributing economic growth by introducing
to local communities by new products, services, and
providing jobs and ideas into the marketplace.
supporting local Spirit
Entrepreneurial Quick Decision-Making
economies.
They inspire a culture of The family's close-knit nature
entrepreneurship, allows for swift decision-
encouraging individuals to making, enabling them to
pursue their own ventures adapt quickly to changing
and contribute to economic
Advantages and
Disadvantages

Advantages Disadvantages

Long-Term Family Conflict

Perspective

Strong Nepotism
Commitment

Flexible Succession
Decision- Issues
Making

Enhanced Limited Growth

Types of Family
Businesses

1 Family Owned Business

The family owns the business, but not necessarily
involved
2 in day-to-day operations.
Family-Owned and Managed Business
Family members actively manage the business,
setting strategies and overseeing operations.
3 Family-Owned and Led Business
Family members hold key leadership positions, directing
the company's vision and growth path.
Common
Challenges
Lack of S uccession Planning
Failing to plan for leadership transitions can lead to
instability
and uncertainty within the business.

Sibling Rivalry
Competition between family members can strain
relationships and hinder effective collaboration.

Internal Family Conflict

Disagreements over management styles,
strategic directions,
 Overcoming
Challenges

Family Constitution Family Gatherings Outside Board of

Advisors
Formalizes family values, Regular meetings and
ownership structure, andevents promote open External perspectives and

governance, providing communication and foster expertise can provide

a sense of unity among valuable insights and help
clarity and guidelines for
family members. resolve disputes.
decision- making.
 Strategic Roadmap
1. Family Discussion
Open and honest dialogue within the family to establish shared goals, aspirations,
and expectations for the future of the business.

2. Setting Clear Goals

Defining specific, measurable, achievable, relevant, and time-bound objectives
for the transition of leadership and ownership.

3. Identifying Key Players

Identifying and evaluating potential successors, clarifying roles, responsibilities,
and skills required for successful leadership.
4. Independent Business Valuation
Obtaining a professional assessment of the business's financial health and market
value to inform transition strategies and ensure fairness.
5. Exploring Transition Options
Considering various paths for transferring ownership and management, including
family members, external partners, or a combination.
6. Informing Management Succession
Communicating the planned transition to key stakeholders, including employees,
customers, and suppliers, building trust and confidence.
The Multifaceted S tructure of Family
B us ines s es
1 Non-Family Non- Manager 2 Family Owners
Owners
Members of the founding family who
E xternal investors who provide
hold ownership shares and have a
capital and expertise but do not
say in strategic decisions, but may
participate in day-to-day
not be actively involved in
operations or family governance.
3 Family Owner management.
4 Non-Family Owner
Employees Employees

Family members who work in the Professional managers and

business, contributing their skills staff hired for their
expertise, who contribute to
and knowledge while holding
the success of the business but are
ownership stakes and
The 3-Circle Model: Culture of Family
Businesses

Family
Values, traditions, and dynamics of the family,
influencing decision-making and business practices.

Business
Operational goals, strategies, and financial
performance, driven by market forces and industry
trends.

Ownership
Control and ownership structure, determining
decision-making power and the distribution of
Valuing the Family Business: The Pillars
of Success
1 Long-Term Orientation 2 Strong Values and 3 Commitment and
Culture Loyalty
A commitment to
sustained growth and Shared principles and A dedication to the
profitability, investing in beliefs that guide business's success, with
the future and fostering ethical decision- family members and
a culture of long-term making, fostering trust, employees working
vision. loyalty, and a sense of together toward shared
4 Flexibility and Adaptabilitypurpose.5 Community and Social
goals.
Responsibility
The ability to adjust to
changing market conditions, A commitment to ethical practices,

embrace innovation, and environmental sustainability, and

respond effectively to supporting local communities,

Next Generation's Vis ion:
Embracing Innovation
Ready to Learn and Adapt
A willingness to embrace new technologies, processes,
and market trends, ensuring the business remains
competitive.

Global Market Exploration

Expanding reach beyond domestic markets, seeking
new opportunities for growth and diversification.

New Revenue Streams and Profitability

Developing innovative products, services, or platforms
to generate new sources of income and enhance
profitability.

Breakthrough Innovation
Case Study: Haldiram - A Legacy
of Flavor
Founded by Mr. Gangabhishan
1937 Agarwal, known as Haldiram
Agarwal
Expansion to Kolkata and Nagpur,
1940s establishing a foundation for future
growth
Second generation did not actively
1960s expand the business.

Third generation, Monoharlal and

1970s Shivishan, took the business to
Delhi and Nagpur
Estabhishmentb of branches in
1975 Delhi, Nagpur, and Kolkata,
expanding distribution and export
Recognition as a “most trusted
2003 brand” in the industry, solidifying
its reputation.
Conclusion: The Enduring
Power of Family
Businesses

Family-owned businesses are a testament to the power

of shared values, dedication, and innovation. They play
a vital role in the global economy, creating jobs, driving
growth, and contributing to the well-being of
communities. By embracing tradition and innovation,
family businesses can continue to thrive for generations
to come, leaving a lasting legacy for their families and
the world.