Sunday, June 5, 2011

Family Owned Business Family


Problems Faced By Family Owned Business Houses

·         Lack of professional approach
·         Lack of delegation (feudal pattern
·         Less attention to R&D
·         Preference as criteria for promotion instead of performance
·         Inability to take risk in new venture post liberalization
·         Conservative mindset(believed in seller market & could not adjust with buyer’s market realities)
·         Unrelated diversification
·         Family priorities over business priorities
·         Family disputes for control of business
·         Succession planning & incompetent business inheritors
·         Clashes with professional management
·         Cross holding of capital stake
·         Fear of globalization & take over

Positive Aspect of FOBH

·         Concept of stability & continuity of ownership
·         Loyalty & Commitment
·         Family name –Brand value – Acceptance
·         Perception that Business Families can take care of business as they have huge capital stake
·         Insider –Outsider concept

No comments:

Post a Comment