There has been a lot of research on the factors influencing the performance of a
Family Managed Business (FMB) and a Professionally Managed Business (PMB).
Good management practices are not only the monopoly of PMB but also exist in FMB too.
In fact, a lot has been argued on what constitutes a family business, as the
difference between the performance of the family business and that of the non-family one is
minimal in some contexts and industries.
The basic importance of this study is to find out whether FMB has created
superior shareholder value compared to PMB since liberalization (post-1991) of the
Indian economy. This study will discuss the basis for what constitutes a FMB and the
performance related data for the FMB and comparison with a non-FMB. In particular, in this study,
the Indian software industry is taken into consideration where Satyam Computer Services
is taken as FMB and Infosys Technologies as PMB.
To understand the review in a simple way, the literature review is basically divided
into two sections:
a. The definition of FMB; and
b. The performance of FMB vis-à-vis PMB.
Family businesses are owner-operated/managed ventures with family members
(and/or family units) predominantly involved in the administration (managerial and
financial), operations and strategic determination of corporate destiny (Poutziouris, 2000).
Other studies (Sharma et al., 1996) have incorporated a set of criteria to define FMB. |
