FAMILY BUSINESS SPECIAL...B schools Strengthen Family Business Courses

  B schools Strengthen Family Business Courses 

Institutes address issues unique to these businesses, groom younger generation for leadership

    Family business management is the new hot discipline at business schools in India as the scions of small to large business houses look for specialised skills to take over the reins and work in an increasingly professional corporate environment.
International Management Institute (IMI), Delhi will launch a full-time 18-month global MBA programme in family business management in September 2013. In December this year, premier institute ISB launched a 15-month part-time management programme for family business (MFAB) to groom the younger generation of family-owned businesses for leadership.
“Yes,thereis a spurtin thissubjectlargely because the younger generation in business houses sees it more worthwhile to remain in their own businesses than work for others,” says Mita Dixit, family business advisor and researcher of Equations Management Consulting. With a more positivecorporateclimate in family businesses some specific learning about family dynamics, conflict management, working in a multicultural workforce and succession planning isin demand,shesays.
About 73% of the top 500 companies listed on BSE are family-owned, while almost half the companieson Nifty aresecondor third-generation family businesses.Anecdotally,in the past 20 years, family-controlled businesses in varioussectors,including information technology, pharmaceuticals and healthcare, have outperformed other categories in sales. Keeping families and businesses together is one of the major challenges faced by such businesses. Also, thesebusinesses are growing more professionalbothfrom within families andfrom outside. “There is a growing need and emergence of owner managers who will deliver functional responsibilities relevant to their businesses,” says Ashutosh Khanna, coordinator — global PGDM (MBA): Family Business, IMI. These family business managers,he adds, needworking knowledge of functional areas contextualised in their own business reality, along with the skill to effectively structure and delegate functionaldecision-making to professionals. IMI’s new full-time programme revolves around growthstrategy,building managerial bandwidth, capacitating business owners to identify global assets to buy, leadership, identifying and hiring the right fit, succession planning, legal and regulatory nuances and various other family dynamics.
“There is a huge level of curiosity, interest and awareness about perpetuating family businesses and keeping them united. There is also a sign of growing interest in families for entrepreneurial ventures. Families are open to innovation and new thinking,” says professor Kavil Ramachandran, Thomas Schmidheiny Chair professor of Family Business and Wealth Management, ISB.
MFAB will focus on managing succession, governance, generational struggles around business strategy and professionalisation. Family businesses, which were once run mostly on practice wisdom and solely by family members, have transformed to more professionally-run organisations. Over the years, severalfamily businesseslikeKishoreBiyaniled Future Group or the Burman family-owned Dabur India have got top professionals to run their businesses and empowered them to take independent business decisions. And scions have no choice but to familiarise themselves with emerging innovation, people management, andbusinessstrategiestobe a partof amore professionalenvironment.
“Family business owners today perceive the need of getting children educated on the specific dynamics of such businesses and make them more attuned to working with professionals,” says Professor Ramachandran.
According toDeepakChandra,deputy dean, ISB, it’s the growth oriented mid-sized family businesses that need more support. “Family businesses are one of the major contributors to economic growth and their strengthening is an important agenda, particularly in a scenario where a lot of family businesses fail after second and third generation,” he says.
Traditionally, family-run firms have been sending their progeny for foreign education to expand their market horizon as well as to sharpen their life skills and ability to run a multicultural workforce back in India. While back home there is a dearth of programmes catering to families who arein businessfor atleast two generations. Some of institutes that offer post graduate diploma or certificate or shortterm courses in family business management include,ISB,SPJain Instituteof Management and Research, Narsee Monjee Institute of Management Studies, IMI, Welingkar Instituteof Management, among others.
“However, 80-85% of the programmes offered in this discipline so far focus on business management with very little emphasis on family dynamics, conflict management or succession planning,” according to Dixit.
SP Jain, among others, runs programmes for parents andemployeesof family students.“In a family business it is not possible to segregate business and family thinking. You have to integrate business as well as family and individual himself,”saysParimalMerchant,director,Centrefor Family ManagedBusinesses,SPJIMR. So, as family businesses move on to new growth phases and charter a highly competitive business environment both in India and globally, business schools have a critical role to play in developing the next generation of leadership.

RICA BHATTACHARYYA ET130101