However, family business as a system has inherited an identity associated with features such as, non- professionalism, conservatism and poor governance. The fast-paced changes in business environment In the past two decades have altered this to an extent. Today family owned businesses are perceived as much more respected, entrepreneurial, growth driven and much better governed, contributing immensely to the country's growth story. In some countries, many of the largest publicly listed firms are family-owned.
A firm is said to be family-owned If a person is the controlling shareholder; that is, a person (rather than a state, corporation, management trust, or mutual fund) can garner enough shares to assure at least 20% of the voting rights and the highest percentage f voting rights in comparison to other shareholders. Some of the world's largest family-run-businesses are Walter (United States), Samsung Group (Korea), Data Group (India) and Foxing (Taiwan). Family owned businesses account for over 30% of companies with sales over $1 billion.
Examples of family businesses: Ditty Barilla Group, Vaunt Group ,Bombardier Inc. Dullard's, Ford, Garnett Family of Companies. Jolly Time, Lundeberg Family Farms, Mango, Metal Steel, Panda Energy International, Pet's REV Center, Raymond Group, Samsung, Data Group, Toyota, Trump Organization, UTC Quality Foods, Wall-Mart, Way Weakens, WE Common threats to Family Owned Business Family Feuding: Family businesses are faced with Internal conflict that typically arises from the inability to separate your business and personal lives.
Sometimes the feuding Is due to the varied Interests of each family member, personal egos or personal rivalries that spill into the business environment. Nepotism: Managing family is a delicate matter, and it is important to be aware that the fastest way to alienate the people that work for you is to create a company culture based on nepotism. Everyone wants to help out family, but hiring, promoting, and paying omen based on a familial relationship rather than on their actual merits and ablest, Is a recipe for disaster.
Letting Emotions Run the Business
You have probably heard the phrase, "It's not personal, it's business. " Well, in a family business, it is always personal. Separating your emotions from the business is not an easy task, especially if you are directly managing a family member. It is difficult for people to receive critical feedback from peers or their boss and even more difficult to receive It from someone they love. On the other hand, if you are Insensitive, you may appear cold and unapproachable. Lack of sensitively with family employees can also balance of emotion needed based on the dynamics of your business environment.
Losing Non-Family Employee
There are two main reasons non-family employees will leave: limited growth opportunities and family conflict. Most employees want to advance within a company. Unfortunately, in most family businesses there are often limited opportunities for advancement, because family employees occupy all leadership positions within the company. Without opportunity to advance or take on a leadership role, many talented and ambitious employees will move on. Another problem is that non-family employees will leave because they feel as if they are always in the middle when a family feud breaks out.
No Succession Plan
There is going to come a time when someone retires, leaves, or perhaps passes away. If you do not have a plan, you are setting your business up for failure. Do Family Business fallout by the 3rd Generation? About the myth that says- Family owned businesses do not continue after 2nd generation: According to Nancy Bowman-Upton in the Small Business Administration publication Transferring Management in the Family-owned Business, it is estimated hat less than 33% of family businesses survive the transition from first generation ownership to second generation ownership.
Sometimes this is due to the family not having interest in running the business, but in most cases it is due to the lack of creating a plan. A succession plan is absolutely necessary to ensure the business lives on from generation to generation. The greatest challenge concerns the gap between family generations. A business founder is used to doing everything himself. Thus the members of the family don't get the exposure to handle different situations. Thus developed the unique culture of the present Indian family business: Inward- looking, owner centric, smaller scale, with a restricted perspective, and conservative mindset.
This culture eventually becomes a hurdle in absorbing 'outsiders'. The same culture also poses a serious challenge in absorbing the next generation family members: Different generations, seeing the world differently are supposed to work together. It can be a difficult thing as the young generation is often in a hurry and has big ambitions, while their elders are more conservative and skeptical. Conclusion Conventionally, family firms are viewed as traditional, orthodox and unprofessional businesses that are believed to be at the crude end of sophistication in business.
They have been stereotyped as autocratic and personality driven businesses that are lagging way behind the modern, technology oriented and professionally managed large firms. However, this study revealed that Indian family firms have moved ahead of their stereotypical image and are going through a transition mode. A mixed picture emerged on all dimensions studied in this research. Leadership in family business seems to be undergoing a phenomenal change. While earlier it was autocratic, now it is gradually becoming participative.
The younger generation is Joining the family businesses and increasingly taking up leadership professionals. Slowly but surely, seniors are giving them freedom in decision-making. As a final note, most family businesses also consider both the older and younger market because the business is usually passed from the parents to the sons and daughters, thus the needs of both the older and younger individuals are usually considered when appropriate for business. It also suggests diversity in the products and services.
A family business might have several disadvantages but a tight-knit family can easily overshadow them with the advantages. One should definitely consider this type of business if you want solidarity, simple hierarchy, commitment, internal training, and diversity. "Ancillaries provide one of the quick routes to entrepreneurship" Do you agree with the statement? Explain Yes, I agree with the above statement. Mistranslation - An ancillary unit is defined as an industrial undertaking engaged in . Manufacturer of parts & components, sub- assemblies, tooling or intermediates . Supply not less than 50 % of its production to one or more other industrial undertaking for use in their production.
Mistranslation in India
During ass there were few thousands of ancillary industries which were supplying items/products to large scale industries mainly public sector units. Mistranslation in India started simultaneously with the Gobo. Setting up enterprises almost in all the core sectors biz. Manufacturing equipment for Defense/ Railways/ Telecommunications, ship & Aircraft manufacturing and various other engineering and processing industries. The controlling agency of Us I. E. Bureau of Public Enterprises in consultation with Small Industries Development Organization (SIDE) framed the guidelines in 1978 for promoting linkages between small & large Industries through mistranslation.
Mistranslation of Small and Medium Industries
Very significantly the average size of factories has declined in all the major industry groups. Factories employing less than fifty workers has gone up from 75 percent in 1953 to 82 percent in 1972. Correspondingly the percentage of factories employing 50 to 499 workers has gone down from 22 to 15.
Major part of production of an ancillary unit is used by another company in its Marti is an ancillary unit if 50% or more of its sales come from supply to Marti and other car manufacturers. However, a tire company supplying tires to Marti cannot be called an ancillary unit because its major part of production is not consumed by a few industrial units. Thus, an SSI can be an ancillary but every SSI is not an ancillary. Advantages of Mistranslation -. Investment can be minimized by sourcing part of requirements by subcontracting to an ancillary unit. KIT concept followed by many Ancillary units helps the large companies to bring down the inventory level and saves a lot of money. Sourcing is economical from ancillary units that are normally located near the company. Ancillary units work with the parent companies in the process & product development. Major benefits of Mistranslation Drive to a Country - 1. It is the first step towards full fledged industrialization of the country. India is now embarking on this path through mistranslation of automobile spares. Helps in generating employment. Helps in growth of GAP. Promotes entrepreneurship.
Problems with Mistranslation
Delay in payments puts ancillary company in big trouble. If the parent company is big (which is most often the case), then the ancillary company finds it difficult to take even any legal action for non payment. When parent company revises the specifications, ancillary units are some times not given the expected support for adopting the higher technology, nor given sufficient time to bring changes in the technology to match that of parent co.
Reckless multiplication of suppliers by the parent company makes the ancillary units operate below BEEP (Break even point). As a result these units incur losses because of capacity under utilization. Any problems in production or marketing of parent units product reflect on sales of ancillary unit due to its overconfidence.
Street Smarts - getting out and understanding customers is far more important than book smarts or computer research. Ability to Pivot - it's not good enough to be tenacious and smart. You also need to be sure you have a great entrepreneurs fine tune their product and their business model until they find this groove. Resiliency - being an entrepreneur is sexy for those who haven't done it. In reality it's gritty, tough work where you will be filled with self doubt. Entrepreneurs are survivors. Inspiration - Tenacity street smarts is not enough without inspiration.
You need to lead teams and convince others to move mountains when by all means they shouldn't believe they can. 6. Perspiration - We all know people who can stand up at a conference and deliver a rousing speech or who sound awesome in front of customers. But it takes more than inspiration to build a successful business. It takes perspiration also. Willingness to Accept Risk - I'm not talking about crazy risks, but entrepreneurs are people who are willing to start a business on a leap of faith. They don't wait on the sidelines forever doing "side projects" until the day when they're ready to start a company.
If you aren't willing to take a shot by going full time on your startup it tells investors you aren't confident enough in the idea or in yourself. Attention to Detail - If you're going to lead an early stage business you need to be on top of all your details. You need to know your financial model. You need to be involved in the product design. You need to have a details grasp of your sales pipeline. You need to be hand on. Competitiveness - The best entrepreneurs hate losing. Whether in person life or business they play to win. It consumes them.
Sharing the market is not enough - they want to win every deal, hire every great employee and sign-up every partner. And they want to do it at the expense of the competition. As Leo Drencher famously said, "nice guys finish last. " 10. Decisiveness / Gets Things Done - Entrepreneurs don't "noodle," they "do. " This is what separates entrepreneurs from big company executives, consultants and investors. Everybody else has the luxury of "analysis" and Monday-morning quarterbacking. Entrepreneurs are faced with a deluge of daily decisions - much of it minutiae.
All of it requiring decisions and action. Domain Experience - Domain experience is not an absolute requirement. In fact, some people would argue that the Auber successful ventures come from people outside the industry willing to challenge the conventional wisdom. But I believe that having domain experience and relationships gives you an unfair advantage. Better that you start with this than from scratch. Integrity - I believe that integrity and honesty are very important to most venture capital investors. Unfortunately, I don't believe that they are required to make a lot of money.
Change the world I'. Build a great company iii. Make money Those are three pretty ambitious goals. In my experience it's highly unlikely you're owing to achieve all three by locking yourself in a room and trying to brainstorm ideas until you come up with a good one. There's a lot more serendipity involved. Great process to develop their ideas.
Most great entrepreneurs have a burning desire to build a great company. They instinctively know they need great people to help them achieve their goal, and the only way to attract those helpers is by building a great company, with all that entails. Creating a culture that makes it fun to come to work plays a very important role. To build a great company and culture, you can't be in too big a rush to make money. Making decisions for short-term gain almost always means you're losing sight of the big goal. Family values Miramar communities lay a lot of onus on family and unity.
Major business decisions are often taken after a family, especially elders, into consultation. Working in an environment where more than half your peers belong to your community can be very comfortable and profitable. To start with, you are related to a lot of your peers and therefore the chances of being gypped are minimal. Secondly, finance matters are often done through word of mouth, since there is an underlying belief that these remises will be kept. This can also be a reason why Maria's like to keep the business within their family.
Rupees Kodiak of Jasper's Computer Superstar feels that this can also work against the entrepreneurs. This is because they are more inclined towards their relatives, who might not deserve the position rather than trust an outsider who might be a good worker. Kappa Gain of Opal's Microware is also indebted to his father who put him on the right path when he was wondering which business to get into. Even Sandy Gain of Clan Distributors recollects how his father's contacts in the community eloped him start his business and get orders. Why Maria's are popular?
One major reason is that they are trained early on in life, on the basics of trading. Sara Barrier of Lifeline Enterprises feels that since Maria's traditionally come purely from a business background, they are well versed with its various aspects. That can make a difference. "We transact business worth scores based merely on word of mouth. So people trust the community as business people, especially as payments are made on time. Our forefathers gained this goodwill and this kind of inherited knowledge helps to a great extent. Successful characteristics
Almost the entire Miramar community rate themselves as very honest folk. This is what makes them successful in their chosen business fields. Maria's are also very aggressive when it comes to business, and don't let go of any prospective opportunity that comes their way. Miramar businessmen are very committed to their customers and seek long-term relationships. - Working hard is another aspect about Maria's that helps in the long run. Having a business presence pning much of the subcontinent is a feature that has distinguished the Maria's from other prominent trading communities.
Maria's are the biggest risk takers. The Maria's represent the only business community one would truly call pan- Indian. Revenue is bottom line for a Miramar - not top line. Shindigs - They believe making money is a fine goal. It Just shouldn't be the primary one. Without an incentive to make money, an entrepreneur could never attract financing, which is almost always required to build a large business. It's Just that the great entrepreneurs are far more missionaries than mercenaries. The missionaries are true to their insight, and the money is secondary to it.
Entrepreneurs , whose They seldom have the desire to change the world that is required for a really big outcome, or the patience to see their idea through Example - Tarn Juliann - Tentative Health is a social Justice organization working in partnership with communities in rural Liberia and the Liberia Government to promote equity by advancing healthcare services and the fundamental rights of the poor. As opposed to dollars and cents, Tentative measures its profits by the number of lives saved and changed. Shindig and Politics - A Marriage Made in Heaven Shindig on one hand, politics on the other.
The fit seems natural - Kind's and politics - they do indeed go together. But we're not talking about politics within the immunity. He-man Wading is president of the Asian American Political Coalition of NJ, serves on the World Language Instruction Commission under the NJ Department of Education, is an advisor to elected officials on Asian American affairs, and has volunteered on a number of Democratic Party election campaigns. Joanna Cohabitation is the Vice President of Communications for the US India Political Action Committee (CAUSING) Youth Committee.
An International Trade Specialist at the Department of Commerce, she is the lead Department of Commerce services negotiator in free trade agreements with Latin America and the Caribbean. N. Kumar Lackawanna is the only Shindig appointed by President Bush as a political appointee. A former Senior Manager for Dolomite Consulting, he is currently a Special Assistant at SAID, a government agency that advances US foreign policy objectives Guajarati- "entrepreneurship" is revered almost as a religion. Successful entrepreneurs are worshipped no less than gods.
Gujarat is the land where entrepreneurs have made their own fortunes with sheer hard work and dedication. The inherent spirit of adventure and the huge appetite for risk have led the Guajarati to phenomenal success in their businesses. Be it Diarrhea Mambas of Reliance, Krishna Patella of Naira, Augusta Danni of Danni group, Garish Patella of Para's Pharmacy, Skyjacks Patella of Junta, Camshafts of Rasa, Panky Patella of Kudus... They all had one ambition: Grow big. The same philosophy runs through the minds of Ratio-based Connubial Varian, Chairman & MD of Bali Wafers, who is giving Uncle Chips and Frito-Lay's a run for their money.
His potato chips firm has grown multi-fold in the last decade. Varian recalls that his venture, which churns out revenues of RSI 800 core today, was started with a few hundred rupees in a small canteen that served sandwich. All we want is to grow it to the next level and would never sell it off at any price," says Varian. Major Macs, considering it as a threat to their business, have consistently made offers to Varian for a buy-out. Guajarati make the best entrepreneurs because of their ability to find an opportunity to make a quick buck almost anywhere.
The nation has once again been ranked 32nd of the 185 countries in Doing Business 2013, a study conducted by the International Finance Corporation. India ranks below Bangladesh and Sir Lankan . Though Indian's position remains unchanged room the last year, it still is a bad news for a country that aspires to return to 8%-plus growth rate in the medium term in order to create Jobs and lift a huge mass of its citizens out of poverty.
Among the 10 indicators that countries are ranked on, such as starting a business, investor protection, getting electricity and contract enforcement, Indian's ranking slipped on six parameters, while its ranking improved marginally on two parameters; on two parameters, it remained unchanged. For an economy of its size and aspirations, this can only be called a poor performance. It remains undisputed that businesses create Jobs, leading to higher incomes, higher taxes and high growth.
This is a self-fulfilling cycle which can take an economy from strength to strength. However, if the conditions for doing businesses are not conducive, it is hard for an economy to move forward. In such conditions, inherent strengths such as a large and growing working age population and higher savings can be used optimally. 1. Do you think that business world gives a fair chance to women entrepreneurs. Does gender pose a problem to pose a problem or provide an advantage to an entrepreneur?
Investing in businesswomen will boost the economy for everyone, says Tory Burch, chief executive and designer, Tory Burch Women's empowerment will be front and centre in 2014 as more companies, communities and countries invest in women's entrepreneurship. Increasingly, they recognize what organizations from the World Bank to Coca-Cola already know: that women are crucial to economic growth around the world.
Women entrepreneurs see the world through a different lens and, in turn, do things differently (to my three businesses we start, whether it's Coco Channel, who learned the trade of a seamstress s a child, Este Lauder, who turned a passion for skincare and make-up into a beauty empire, or Opera Winfred, whose media business focuses on helping women to reach their potential. According to the Global Entrepreneurship Monitor, there are mm women operating new businesses and another mm at the helm of established ones. Yet we face a huge equality gap.
In only seven countries Panama, Thailand, Ghana, Ecuador, Nigeria, Mexico and Uganda-?do women take part in business at rates equal to men's; in some countries, like Pakistan, they barely take part at all. Even when women are active business owners, they do not reach their potential: omen own almost three in ten American firms, yet employ only 6% of the country's workforce and account for barely 4% of business revenues. When it comes to finance, women face particular hurdles, from a lack of collateral to discriminatory regulations and ingrained gender bias.
Small loans can make a big difference. Micromanage providers such as Women's World Banking, Grahame and Action are addressing the need. But financial institutions must do a better Job of banking on women's potential by thinking creatively and forging partnerships, like Coca-Cola's $mm initiative with he International Finance Corporation, to give more women a shot at the resources that can enable them to start up or scale up. Nascent businesses need support to flourish.
The value of mentors and, to this day, turn to trusted advisers from many different industries for insight. Most women don't have that support, which helps explain why around the world they see fewer opportunities for entrepreneurship than men. So I feel that things are changing but there needs to be still the concrete support from the government and bureaucrats where the work done by the women entrepreneurs is not only respected but also taken seriously. There's no denying that women business owners have come a long way.
But some say gender discrimination continues to hold them back. Nearly half of women-led business owners say they're on level playing field with men in business, according to a survey conducted by Women Presidents' Organization. Sometimes your gender can hinder women from showing their ability because a prospect doesn't believe they are capable. Even though our constitution speaks of equality between sexes, male chauvinism is still the order of the day. Women are not treated equal to men. Their entry to business requires the approval of the head of he family.