In general, Succession planning involves steady process of identifying and training potential candidate/s as successor to fill up key leadership roles in a company for the near future. For many family-run businesses it’s about choosing an heir from the younger generation to take over the business from their elders.
Succession planning is critically important process in family business to ensure business continuity for multiple generations. Most family-owned businesses always wish for a successful continuity of their business from one generation to the next.
A well thought-out succession plan ensures a seamless and hassle-free transition of power and management, ready for unforeseen circumstances such as illness or death of family patriarch. It also boosts confidence in employees and investors that the company will function smoothly once the Chairman or Chief Executive demits office.
A sound succession planning is a steady process that is spread out over years and not a one-time event. Scores of HNI and UHNWI family often make mistake of not choosing and grooming a capable successor while they are in office, thus at the time of eventuality, the company hastily appoints a successor without following a due process. This could result in hasty transition of power and control of business which may often lead to underperformance and /or multiple internal issues, triggering another round of leadership change. Generally, the eldest son is assumed to take over but younger son or even a daughter may be more capable and qualified to succeed. Family & company’s fortunes and reputation are at stake during a transition period, thus the best succession plans are years in making and they ensure that there is minimal confusion when a change of guard takes place. There is also an additional burden of managing personal relationships within the family as many of these neo rich also have high ego issues.
The ‘business of family’ and the ‘business of businesses’ are deeply entangled and company’s professional CEOs often find themselves torn between business concerns and family concerns. In large multigenerational families, succession can often become a sensitive subject and it can lead to disputes & discord, long-drawn court litigations, and succession battles that eat away business profits and eventually the reputation of family & their goodwill. Thus, good governance practices (via formal succession plan) are essential with in family, as they open up formalised lines of communication between family members and thereby sort out any discontent amongst larger family. This involves setting up family councils, adopting family charter, designing regular shareholder assemblies, and designing family protocols are all part of creating good governance structures that can support the process of succession planning. Good governance decisions can unlock the true potential of a family business & family wealth; failing which on the other hand, poor governance can result in family into years of conflict and potential demise. This has been the case with many Business families disappearing from the scene like Mafatlal, Sarabhai, Walchand etc.
Succession planning also involves identifying family members who might be reluctant to join family business. Younger generations of business families today have exposure to the best of global education and are well-traveled individuals with their own interests. Hence, many of them aim to venture out on their own and are reluctant to take over reins of the family business, as was the practice so far.
One of the goals of succession planning is to protect the interest of an individual during his/her lifetime and after his/her death safeguard the interest of his/her loved ones. This can be achieved by different ways of estate planning by distributing assets among his beneficiaries. An estate plan aims to preserve the maximum amount of wealth possible for beneficiaries and flexibility for the individual prior to his death. Hereditary is automatic, whereas Succession needs planning.
Business succession planning consists of two separate, but related parts:
Ø Ownership succession and
Ø Management succession
Ownership succession involves identifying ownership of business amongst various branches of family and finally to each family member. There could be gradual transition of ownership over a period of time whereby a portion of the ownership could be transferred first with the balance at a later date and there could be certain milestones linked to that.
Management succession requires the succeeding family member (or members) to become increasingly involved with the day to day operations of the business. Ideally, this process would occur gradually, with the succeeding member taking on an increasing amount of responsibility over time. Management succession should begin before ownership succession for following reasons:
1. The management capabilities of the succeeding generation may be unknown. Accordingly, it is wise for the older generation to maintain ownership (and ultimate control) over the business until it is clear that the member of the succeeding generation will be a successful manager.
2. The promise of future ownership incentivizes the successive generation to earn their ownership interest and to manage the business in accordance with the older generations’ directives.
3. Waiting to begin ownership succession allows the older generation to match ownership with management responsibilities. This is particularly helpful where multiple children are involved in the business and one clearly performs the bulk of the management duties.
Throughout the management and ownership succession process, it is important to communicate your business values and succession planning goals to the successive generations.
Key issues of the effective Succession Planning Plan
An estate plan aims to preserve the maximum amount of wealth possible for beneficiaries and flexibility for the individual prior to his death. Estate Planning through Succession Plan helps an individual to ensure the following:
Ø Planning for harmonious succession and disposition of your Estate ;
Ø Protection of Estate with family’s needs in mind ;
Ø Effective management of Estate during and beyond your lifetime; and
Ø Preparing Estate for unforeseen eventualities.
Necessity of Succession Planning for small and medium business
Wealth and businesses take years, if not generations, for families to accumulate and set up. Taking concrete steps to protect this wealth and business from changing times, evolving laws and the vagaries and conflicts of successive generations, is no longer an indulgence. It is an imperative.
Succession planning is a necessity and not an option and this awareness has dawned quickly. Many however still deny the inevitability of human mortality. Succession planning remains low down on their priorities, something that can be taken care of with a will, preferably to be made when one is nearly gone! It is never quite as simple.
Family businesses: engines of change
“Before the multinational corporation, there was Family Business. Before the Industrial Revolution, there was Family Business. Before the enlightenment of Greece and the empire of Rome, there was Family Business” William O’Hara
Entrepreneurship, ambition, resilience, dynamism, sustainability, legacy—these are some of the terms that are synonymous with a family business.
Family v. business
In a family business, very often a question arises, ‘What comes first, family or business?’
The answer to this often drives the vision and how businesses are run and managed.
Families, which put the family first, take decisions with the ‘heart’ and emphasises on family harmony. Whereas, families, which prioritise the business, take decisions objectively with the ‘head’ without co-mingling family issues
With family-run businesses continuing to be more the norm than exception in India and most of them progressing fast on the path to globalisation, succession planning has never been as important as it is today. Succession planning is not only a means to safeguard from a potential inheritance tax, but also a method to ensure that legacies remain alive and keep up with changing times with minimum conflict or impact on business.
In India, like much else, succession planning can be quite complex. Families are often large with several factions & branches, and with multiple people involved in the business, deliberations around succession planning can be prolonged and difficult, making it imperative to involve an arbitrator or mediator. The slew of regulations around tax and other regulatory matters, in addition to the personal laws could compound the matters further.
Despite the above-mentioned factors, not planning for succession is not an option. Ruminating over corporate India’s history reveals the immense disruption caused by improper or absent succession planning. Familial ties have been irreparably damaged, wealth accumulated over generations has either been squandered or reached outsiders, protracted and endless litigation between family members has taken up significant time and effort, drainage of valuable resources that could have been put to better use, and most importantly, once-leading business houses have taken a huge hit — on their finances, glory and reputation.
While a WILL remains the most oft-used mechanism for passing down wealth through generations, it has own limitations, apart from the potential levy of inheritance tax. The chances of a will being challenged, tying up the family in litigation for years to come, are high. Such limitations and other concerns, such as ring-fencing assets from legal issues, setting family protocols and ensuring that wealth is not fragmented, has led taxpayers to seriously consider succession planning through a private trust set up for family members’ benefit. Depending on requirements and family dynamics, multiple trusts may be formed. Usually, the trust is discretionary, with family members as trustees. Sometimes, an independent/corporate trustee is brought in.
Succession planning is a process and not an event. It involves the promoters of business houses and also heads of family-run businesses having to think about their current family members, factions within it, generations to come, and, most importantly, the impact on business. Like any other business decision, the process of succession planning can be extremely complex and long drawn. Multiple laws and regulations need to be contended with, apart from all the other intangible issues. Each succession plan is unique in its challenges and constraints.
Following points need to be considered:
Legacy of Family Ownership: Successful family businesses have a sense of pride in family ownership. Founders of the older generation view this legacy as a business asset that has grown large enough to provide for their family for subsequent generations. Successive generations view the business’s legacy as maintaining the successful business built by the founders.
Opportunity not Entitlement: It is important that the legacy of the family business does not create a sense of entitlement in subsequent generations. You should be careful to say that the business is an opportunity, and the opportunity for ownership will only come with actions in accordance with the family business philosophy.
Compatibility and Compensation: It is ill-advised to expect your children and grandchildren to all be cut from the same mold. Still, it is also important to ensure that your successor’s personality is compatible with the business and your business philosophy. If you have multiple children and only one that is compatible with and active in the business, you may be encountered with an estate planning issue as well. It is important to emphasize that the business is the source of the family’s wealth and that active participants deserve to be compensated accordingly for preserving that wealth. Here, what is fair may not also be equal.
Access to Information: Subsequent generations will not blindly succeed the management and ownership of your business. Your family members should be given access to an increasing amount of information that is consistent with their age, maturity, and interest in the business. Family business meetings and family council meetings are not only good opportunities to provide your children with information about the business, but are also good opportunities to teach them your business philosophy.
Issues in Indian Context:
Internal struggles for power and ownership are the primary triggers for family disputes in India. As families move out of the larger home, their values get diluted. They stop communicating with each other and only information sharing exists. Even close-knit families disintegrate because of this.
While instances of familial conflicts between siblings, cousins and other kith and kin are aplenty, father-children rivalries are rare in India. And, even among these, not all were for ownership or control. You could even say it was a difference between licence raj and post-1991 mindsets or Old School of thoughts vs. New School of thoughts.
No family member would want to let go of anything that is due to them without a fight, sometimes very bitter one. Durability of a family business
Family feuds do little for the durability of a family business. The oft quoted statistic globally is 30:13:3 — 30% of firms survive through the second generation, 13% last the third generation and only 3% survive beyond that. While this may yet have to be tested empirically in an Indian context, that succession is a challenge for Indian family firms cannot be undermined. Power struggle in some families is so intense that members are not even willing to segregate ownership from management, or reach a consensus on the roles of family members in the business. If there are multiple stakeholders from the next generation, then the decision on who will be the successor may be a challenge, notwithstanding their capability,
A few business houses have vertically split their businesses to give clear ownership and accountability to each of the children. In a few others, the children have mutually agreed to do what they are best at. The division of roles is done in a way where one member manages day-to-day operations, while the other is involved in long-term strategy-making.
Family Business’s”verticalisation” or diversification could reduce disputes around succession in Indian business families. The pie should be large enough for all the members to gain. Another option is to leave the entire management bit to professionals; but that would not go down well with inheritors who fancy that they are smart to run a business.
Founders and promoters in India are infamous for being unable to let go of their businesses even after retiring from active management, patriarchs should realise that succession planning is a process and not a one-off event. The focus should not only be on who will succeed the incumbent but also on the retirement plans of the incumbent herself, for a successful transition to happen.
Retirement Plan for patriarchs or heads of business families
The term retirement plan is generally used for the salaried class and never for rich successful businessmen. But family business researchers attach a lot of value to retirement planning for patriarchs or heads of business families. Ideally, retirement planning for elders (in business families) should start at the age of 50-55 even though people live up to age of 75-80 and remain active in their business. Differences between patriarchs and their younger generation can occur over anything from strategy to succession. It turns very ugly when centering around the ownership and property.
Absence of a sound retirement plan worked against Father in very recent public spat between Father & son from famous business family having interest in textiles. Quite possibly so, because in a recent interview to media, Father (Singhania) bemoaned, “Do not transfer all your assets to your children while you’re alive.”
The problem is that patriarchs only think about succession, and not retirement. They should have a clear idea as to what they should keep for themselves and what they should pass on.” According to her, elders in business families have now started making ‘private trusts’ to mitigate this problem. A private trust is an arrangement created for the benefit of individuals and it holds asset classes of all types
Managing serious disagreement in the family business
A familiar aphorism “industrialist to beggar” in three generations describes the likelihood of family-owned businesses failing even before the founder’s grandchildren take over.
Around 90% of Indian businesses are family-owned, yet less than 30% of them successfully hand over the baton to the second generation, and less than 10% make the transition to the third generation. Whether it is the grocery shop next door or India’s richest family, there is a high probability that the family business will split after the founder’s death.
Managing succession, next-generation induction and sibling rivalry in a family-run business is a complex, emotional and difficult task that many families are unable to navigate. To compound the problem, Indian families don’t talk openly about succession and leadership transition—it is considered disrespectful to senior generations.
The first casualty of internal family conflict is the organization culture. The freewheeling entrepreneurial start-up culture which took the company to great heights abruptly changes to opaque silos, territorial mindsets, politics, inter-personal friction and bureaucracy. Staff functions which have proximity to the family become powerful at the expense of line functions and the organization loses its ability to respond to a fast-changing environment. In some cases, if the staff sees that a split is imminent, they start aligning themselves with either of the feuding factions. Loyalty begins to take precedence over performance.
Undeniably, the biggest challenge in succession planning is the founder himself. A founder who has worked a 12-hour day over the first 25-30 years of his/her journey finds it hard to walk away from a business he/she has built brick by brick. Founders of family-managed businesses in India typically work till they are at least 75 years old. When the second generation joins the business, sharing power and authority becomes a point of disagreement.
During this period, the second generation seeks increased authority and responsibility commensurate with their growing maturity and experience but can be frustrated by the founder’s repeated intrusions into their assigned “territory". The founder, on the other hand, tends to believe the easy-going next generation doesn’t really measure up, and lacks the grit and determination to succeed.
Before describing the three-step plan for managing family conflicts, it is important to get the context right by starting at the very beginning. For, if a succession plan is to work, it is the founder who must initiate the changes.
A 3 step plan that can help family-run enterprises prepare for the succession when the founder is still around:
1. Think through vision & mission
The first thing to do is take two steps back from day-to-day operations and go off-site with family members to agree on the basics. What are the core values and what is the vision? Where does each family member see himself in five years? If the long-term vision as a family is not aligned, members will keep clashing on operational matters. Sometimes an experienced and trusted external facilitator can help structure discussions and play mediator. Once the vision and values are aligned, there is much less likelihood of conflict in day-to-day operations.
In the unlikely event that there is an unbridgeable gap in vision, it is best to split amicably in a fair and transparent way. Agree to disagree and move on.
2. Document a family succession plan
Succession planning and induction of the next generation cannot translate to a one-day handover of charge that lets the founder walk off into the sunset. It is a 5- to 10-year journey, with increasing levels of responsibility. There should be time allocated for grooming and training the incoming generation. At every level, there should be a process for assessment and feedback by an independent team that should include professionals from outside.
A succession plan takes six-eight weeks to prepare and must factor in the needs of all stakeholders—founders, all members of the family, professionals who report to the founder and share an uneasy relationship with the next generation, but will eventually have to report to them. This plan must also factor in the core capability and potential of every member of the next generation and provide options for those family members who want to exit to pursue other opportunities.
This step has to be implemented by the founder.
3. Adopt a Family charter
As a last step in the three-point plan, a family charter that lists mutually acceptable rules and responsibilities should be put in place to ensure harmonious conduct of business. A family charter helps preserve the legacy of parents and grandparents whose contributions have made the business successful.
Family conflicts usually start with comparisons of visible status symbols—homes, cars, cheque-signing authority, job title and, of course, compensation. So these issues must be covered in the family charter.
A family charter needn’t be a complex legal instrument. It can be a simple, easy-to-implement 5- to 10-page document, depending on the size and complexity of the business. It’s a document that should be reviewed every year and modified to meet the changing needs of the business.
A formal family charter must be put in place within two years of the second generation joining the family business—by this time, areas of concern would have become visible.
While there is no guarantee of success, these three steps will maintain family harmony and help preserve the legacy of the founding generation.
Family Council
Family Councils and Corporate Governance Mechanisms
It is believed that family council partially substitutes the shareholders’ meeting and the board of directors in playing their respective corporate governance roles of ownership and monitoring and be in charge of directing and controlling an organization. Corporate governance systems are typically hierarchical and they are based on agency theory assumptions about the need for contractually assigning distinct governance roles to governance mechanisms at different levels. There are three basic corporate governance roles and mechanisms from this perspective:
ü Ownership role,
ü Monitoring role
ü Leading role.
Family firms frequently have neither the tools nor the mechanisms, or do not know how to use them properly.
There are 3 components to family governance:
1. Periodic (typically annual and timing wise annual festivals like Diwali or Wedding in a family) assemblies of the family; all families in business can benefit from this activity.
2. Family council meetings for those families that benefit from a representative group of their members doing planning, creating policies, and strengthening business-family communication and bond.
3. A family constitution (Charter): This is Family's policies and guiding vision and values that regulate members' relationship with the business. This written document can be short or long, detailed or simple, but every family in business benefits from this kind of document.
The family in business may have a more elaborate family governance structure, with a separate meeting for family-owner-managers or a separate council for family shareholders or periodic meetings between shareholders, the board, and management. Experts prefers the simplest structure that does the job and the three components above are all most families in business need.
Properly composed and managed, a family assembly and family council help:
1. Develop clarity on roles, rights, and responsibilities for family members.
2. Encourage family members, family employees, and family owners to act responsibly toward the business and the family.
3. Regulate appropriate family and owner inclusion in business discussions.
The family assembly typically meets annually, lasts 1-2 days, and includes all adult family members (including in-laws). Families need to decide at what age children should attend these meetings. One family says that children should attend when they are able to feed themselves; most families start bringing the younger generation into meetings at around age 16 or may be 18 or 21. For the young children, families should still consider organizing some group activities where the children can begin to learn about the business and develop relationships with their siblings and cousins.
Family assembly activities include learning about the business through presentations by family and non-family managers, discussing (not necessarily deciding) the direction of the company, being educated about what the company does or about important skills like reading financial statements. It is also a good forum to get updated on changes in the family such as important events and accomplishments, and on changes in ownership. For example, have any shares changed hands since the last meeting? Are there new tax laws shareholders need to be aware of?
If the family has 15 or fewer adults, you may be able to have in-depth discussions and create plans and policies in the family assembly meeting itself. When the family grows beyond this size certainly, families generally benefit from having a family council. The family council can perform all of the following duties:
ü Plan family assembly meetings, which otherwise the CEO usually has to arrange.
ü Discusses current business, ownership, and family issues and direction and keep the family informed about these.
ü Help the family reach decisions and speak with one voice about its goals.
ü Keep the board of directors informed about family views about the company and maintain a dialogue with the board about key business policies and plans.
ü Develop plans and policies, in conjunction with the board, that regulate family activity with the business.
ü Guard against family interference with the business while seeing that the family's key goals are satisfied.
ü Develop loyal, informed, contributing family shareholders.
ü Scout the family for business talent.
ü Create educational events or otherwise encourage the education of family members about the business.
ü Plan family social gatherings and rituals and help to create healthy, harmonious family relationships.
The family council can be composed in several ways, the typical way being one member elected per family branch. One should try to compose the family council so that it "looks" like the family, having adequate representation of all generations, both genders, in-laws, active and passive owners, hometown and geographically distant relatives. Most families reimburse family council members for their expenses but do not offer any compensation for their service. Other families feel at least a modest compensation is warranted and earned.
Business Families need to nurture members' feelings of trust and pride concerning the family and business as well as build a sense of teamwork to keep a family committed and disciplined in its relationship to the business. It is wise, therefore, in the family council and family assembly to emphasize consensus decisions around family goals and policies, openness to various viewpoints, as well as significant transparency in company operations, decision making, and ownership holdings. If the family is reluctant to engage in the discussions it needs to have in the family council or assembly—out of concern about potential family conflict, not understanding what these groups should do or just being shy in these meetings—hire a facilitator to help organize the meetings. Good structures that do not address the right topics are a costly waste of time.
The family council sets policy for the family and recommends policy that concerns the family to the board, such as around family employment in the business. The board of directors sets policy for the business and may also make recommendations to the family council in matters that concern the business.
The board and family council should coordinate their work and not overstep each other's domains. Coordination may take the simple form of having the council and board update each other periodically on their important objectives, having an annual joint planning session, or having a board member sit on the council or vice versa. Again, I opt for the least complicated solution to achieve adequate communication and coordination between these two groups.
The family constitution articulates a family's vision for itself and the business, its core values and the policies and guidelines that maintain family discipline. Among the policies a family council might create include:
ü Employment standards for the next generation.
ü Career development policies for family employees.
ü Family compensation.
ü Succession process, including retirement ages.
ü Ownership, including buy-sell agreements.
ü Dividends.
CEO Succession in the Family Business
Selecting a company’s next CEO is one of the most significant decisions in an organization’s life. In every company, it is critical to find the right fit; in a family-owned business, the fit factor is even more consequential. The success and sustainability of the family’s main asset and source of income, and a significant piece of their identity, rests largely in the hands of the individual selected to be CEO of their family-owned business. For many, choosing the next CEO in a family company may appear apparent and straightforward: the first option is to choose a talented son or daughter of the current CEO—one interested in the work of the business. The next option is to choose a talented relative (a non-lineal descendent), or someone working in the company or from the outside. But it is neither this simplistic nor predetermined as a choice of options, and no family company can afford an error in today’s competitive and fast-changing business environment. An under-performing CEO, or one that is not in sync with the owners’ vision and values, can set a company and a family back, and some companies may never recover or regain their balance, focus and drive.
There is much at stake when transitioning executive leadership. Every family business today must pay close and special attention to the selection of its next CEO, and to the succession process. This begins with the recognition that succession is a dynamic process, rather than a pre-determined decision. Too often, business leaders view the CEO transition as little more than the hand-off of a baton. In reality, the continuity of the family business is a true team effort, with a game plan that is drawn up and implemented over time. It involves both generations of owners and business leaders working together to maintain momentum in the company, and continuing to adapt their succession game plan as needed–even close to the finish line.
Succession Planning: The Wrong Way Typically, in a situation like the one we have set, succession conversations begin with the current CEO asking one of these two questions:
ü “Which of my children is qualified to take my place?”
Or
ü “How do I divide up the CEO role so that two of my children can co-lead?”
Succession issues in family-run businesses
Succession to leadership is common to any organisation, a professionally-run or a family-run company, and other organisations. Succession issues are more pronounced in a family-owned and family-run company because the promoter holding 100% or a majority stake may want his son or daughter to succeed him as a birth-right or his children may think that they have a birthright to succeed him. Majority of the private sector listed companies in India are family-owned and family-run companies. Historically, we have witnessed succession issues even amongst kings. Worldwide, majority of the businesses in number as well as in value are family-run and family managed. Hence, the succession issues are a global phenomenon.
In India, we have witnessed that wealth does not pass in the family beyond the third or fourth generation or business does not remain with the family beyond the third or fourth generation. One of the main reasons for this is that the succession issues are not properly managed. The basic question is can you manage succession, just as you manage a project or a business? Yes, it is possible to manage succession, just as managing a project or a business. In Kautilya’s Arthashastra, Chanakya explains how the succession in the kingdom from generation to generation should be handled.
1. Awareness and recognition: The present leader should recognise the reality and be aware of various events which are likely to happen.
2. Define vision–mission–goals for succession management
3. Understand pre-requisites for effective succession management
4. Understand what influences succession decisions
5. Identify succession challenges/issues
6. Develop appropriate solutions to challenges
7. Have code of family governance
8. Is it possible to develop entrepreneurs/leaders?
9. Build capability of potential successors: train and groom
10. Determine suitability of potential successors: match-making
11. Involve independent directors/mentors/consultants
12. Periodical review and revision
13. Decide entry and exit timing
What role can family`s chartered accountants play?
For most family-run companies, particularly SMEs, Chartered Accountants are the first point of contact for any issue. At minimum, a chartered accountant can play the following roles:
Ø Draw the attention of the present promoter-leader about the need for succession management.
Ø List out the tough decisions required for succession management and assist him in reaching those decisions.
Ø Suggest the relevant business consultant, which could help the leader and the successor.
Ø Any effective success management may involve restructuring of the ownership or the businesses. In this area, a chartered accountant can play a significant role in working out the most tax-efficient and legally effective methods.
A good and effective succession management is achieved through a judicious combination of various factors, such as planning, structure, discipline, mindset, culture, determination, training & implementation. Succession management involves ethical and moral issues rather than legal issues. Hence, the approach to this aspect would vary from family to family depending upon its concepts, views and value systems.
Family Settlement/ Arrangement as tool
Disputes among members of business families have been the stuff of numerous novels and films, except for providing headlines in daily newspapers. Various families have ruined themselves fighting until the closing stages, the last scene of which is usually performed in the court. The judiciary is generally averse to enter into the paddle because the law should come after everything else in family relations. The concept of family arrangement is applicable to all the communities in which there is a common unit, common mass and the practice of joint living. Consequently, so long as the arrangements are made for settling the disputes with or without litigation, the validity cannot be questioned. Only when the dispute cannot be settled by way of family settlement, is adjudication by the way of arbitration possible.
Is it legally valid? A family agreement is a valid, legally binding and enforceable contract, and is applicable to all the signatories. An oral agreement recorded as a memorandum is also readily admissible in court. If it is a written agreement, it should be signed by all the family members involved, and should preferably be attested by two witnesses.
Does a family arrangement help avoid disputes?
Once the members of a family arrive at an amicable understanding regarding movable or immovable property to avoid any existing or future disputes that`s final and resolves present disputes. When it comes to distribution of property, a family agreement need not be a single legal document, but can be a series of documents delineating the property rights of each member.
Conclusion:
Maintaining a family unity is a complicated task. Even the most close people can be involved into a series of arguments. Family feud greatly influences the happiness, well-being and emotional stability of a family. Thus, it is crucial to cope with conflicts without being down in them.
The old adage says to never do business with friends or family. When negative personal feelings seep into business dealings, keeping such matters separate has almost always proved difficult—especially when it comes to blood relatives. And when the business is large, the disputes tend to be large as well. So does the publicity.
The evolution, and sometimes the illusion, of 'family' - inclusive of the vast diversity and uncertainty of a multiplicity of family dynamics that challenge the meaning and screening of the word 'family'- Zakiyah Adjin-Tettey, II
Here are few famous public feuds in India's business families: Mukesh and Anil Ambani, Shivinder and Malvinder Singh, Cyril VS Shardul Shroff-Solicitors, Kirloskar Family, Rajan VS ANIL Nanda, Bajaj Family, Birla Family is few of the famous examples of family feud in public domain and we should learn from these cases.
Why different generations in many of India’s established business families are crossing swords, “Money has taken over relationships. It has become the benchmark for everything.”, “It’s all about expectations — how much more can one expect to get.”
Infighting in family business is almost always value-destroying for any outside shareholders.
“All happy families are alike; each unhappy family is unhappy in its own way.” –Tolstoy
Plenty of long-running family companies have weathered brutal succession battles and ensured cultural harmony and long-term balance. The vitriol-powered ambition of some family members can, just occasionally, provide strong, if unstable, fuel for advancement of personal and corporate interests. But infighting is almost always value-destroying for any outside shareholders and often soul-destroying for the participants.
In the annals of family business, unlike in fiction, it is rare for everybody to live happily ever after.