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