Importance of Family Business Management
Ready to be at the wheel?
March 10 and 11, 2018 gave aspiring and budding entrepreneurs an opportunity to connect and collaborate. As the best and brightest minds came together and brainstormed on on how to fuel their business growth. It is the most important aspect in any of the business. The conference at IIT Mumbai brought together the best breed of entrepreneurs, innovators, venture capitalists, business model creators, consultants, policy-makers, academicians, and business practitioners to present and discuss innovation and success under the aegis of entrepreneurship for Small and Medium Businesses.
Over the past decade or so, in the dilemma between joining family owned businesses and higher studies. The scales have been tipping towards entrepreneurship and joining family owned businesses.
Let us explore the genesis and the reason why:
Today, family-owned businesses account for two-thirds of the world’s businesses and generate most of the world’s economic output, employment and wealth. In many regions of the world, family companies dominate the economy. “Family-controlled firms now make up 19% of the companies in the Fortune Global 500,” states The Economist. In India alone, 67% businesses are family run. McKinsey forecasts, that by 2025,there will be more than 15,000 companies worldwide with at least $1 billion in annual revenues, of which 37% will be emerging-market family firms.
There is a need for Family Business Management Programs whether you are in a successful family business or you are into a business facing challenges and trying to bring about a changeover.
Successful family business:
Successful family businesses are successful because families see important changes in their industry. Simply put, successful families are entrepreneurial. Also,families succeed because they invest in productive activities, emphasise growing assets, and consume relatively little of their wealth. These families maintain a culture that encourages family members to create things of lasting value. It’s not surprising that these families encourage entrepreneurs. Furthermore,successful families remain reasonably united, keeping supportive members loyal to one another and to the family’s mission. Over generations, as families become more diverse, it is likely that only a few relatives per generation will directly work in the business.
Outside-the-business members might still support aspingtons family philanthropic efforts or social activities, and sometimes that level of involvement is enough to maintain family unity. But investing in family entrepreneurs can also keep talented members contributing to the broader family’s wealth and mission. Investing in family entrepreneurs has to be done objectively based on the feasibility of their business plans, and also fairly within the family. Even if some entrepreneurial projects don’t succeed, these investments will help you spot talent to keep your business growing. And you are sending an important message: this family is committed to creating value.
Family businesses – facing challenges
While family businesses on average are stronger performers than other types of enterprise, they face distinct challenges that need to be managed. This constraint often kills the family business.
This creates the need for a course of study in Family Business Management that helps students understand how to capitalize on the strengths, navigate the challenges, and guard against the weaknesses of the companies and the families that own them.
How is Family Business Management program different from an MBA in Entrepreneurship?
Both Family Business Management and an MBA in Entrepreneurship prepare you for setting up and gearing your own business. However, there is a subtle difference. Unlike MBA in Entrepreneurship which prepares students for a setting up a business, the Family Business Management programme is targeted at family business owners looking to sustain, scale and grow their businesses. The content and pedagogy includes concepts of entrepreneurship, business sustainability, market trends which thereby lead to portfolio expansion and business growth. The program would help you evaluate the state of your family businesses and gear you towards accelerating your business to the next level.