Family business feuds have been hitting the news headlines regularly for quite sometime now. In fact, in the last two decades, India Inc. has witnessed more than 20 business feuds. Leading business groups such as the Modis, the Dalmias, the Birlas, the Goenkas, and the Ambanis, with Bajaj being the latest entrant to the list, have all witnessed painful inheritance battles. As a result, today, many of these family empires that once ruled the Indian business landscape have disintegrated.
According to past research, nearly one-third of family businesses don't survive the transition from the first to the second generation. The drawbacks are too many to count, but the common pitfalls include succession battles, sibling issues, poor decision-making, resistance to change, business acts leaning towards family, inability to change with the changing business environment, etc. On the positive side, however, while most of the family businesses end up in disintegration, its impact is nevertheless incredibly favorable on the economy. According to estimates, family-owned businesses generate about 75% of the overall employment and contribute approximately 65% of the country's GDP. Besides, they also enjoy close to 71% of the total market capitalization in the country. Another interesting fact is that they even rule the stock market with 15 of the 30-scrip benchmark index, Sensex, belonging to family-owned businesses. Also, in NSE, there are more than 25 family-owned businesses in the 50-scrip benchmark index. |
