Importance of Family Business Management
Ready to get behind the wheel?
March 10 and 11, 2018 provided aspiring and budding entrepreneurs the opportunity to connect and collaborate. As the best and brightest minds came together and brainstormed how to fuel your business growth. It is the most important aspect in any business. The conference at IIT Mumbai brought together the best generation of entrepreneurs, innovators, venture capitalists, business model makers, consultants, policy makers, academics and business professionals to present and discuss innovation and success under the aegis of entrepreneurship for small and medium businesses. .
For the last decade or so, torn between joining family businesses and higher education. The balance has been tipping towards entrepreneurship and the union of family businesses.
Let’s explore the genesis and why:
the genesis
Today, family 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 businesses dominate the economy. “Family-controlled companies now account for 19% of companies in the Fortune Global 500,” says The Economist. In India alone, 67% of businesses are family owned. McKinsey projects that by 2025 there will be more than 15,000 companies worldwide with at least $1 billion in annual revenue, of which 37% will be family businesses from emerging markets.
The need
There is a need for family business management programs, whether you have a successful family business or are in a company that is facing challenges and trying to effect change.
Successful family business:
Successful family businesses succeed because families see major changes in their industry. Simply put, successful families are entrepreneurs. Furthermore, families are successful because they invest in productive activities, emphasize growing assets, and consume relatively little of their wealth. These families maintain a culture that encourages family members to create things of lasting value. No wonder these families encourage entrepreneurs. In addition, successful families stay reasonably close, keeping supportive members loyal to each other and to the family’s mission. Over generations, as families become more diverse, only a few relatives per generation are likely to work directly in the business.
Members from outside the company may still support the family’s philanthropic efforts or social activities, and sometimes that level of involvement is enough to maintain the family unit. But investing in family entrepreneurs can also see talented members contribute to the wealth and mission of the family as a whole. Investing in family entrepreneurs has to be done objectively based on the viability of their business plans, and also fairly within the family. Even if some business ventures don’t pan out, 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, perform stronger than other types of businesses, they face different challenges that need to be managed. This restriction often kills the family business.
This creates a need for a course of study in Family Business Administration that helps students understand how to capitalize on the strengths, navigate the challenges, and protect against the weaknesses of businesses and the families that own them.
How is the Family Business Management program different from an MBA in Entrepreneurship?
Both Family Business Management and an MBA in Entrepreneurship prepare you to set up and start your own business. However, there is a subtle difference. Unlike the MBA in Entrepreneurship, which prepares students to establish a company, the Family Business Management program is aimed at family business owners looking to sustain, scale, and grow their businesses. Content and pedagogy include concepts of entrepreneurship, business sustainability, market trends thus leading to portfolio expansion and business growth. The program would help you assess the state of your family businesses and guide you to accelerate your business to the next level.
Business Management Colleges/Institutes
Xavier School of Management (XLRI), Jamshedpur, offering a six-month, full-time Postgraduate Program for Certificate in Business Management (PGPCEM).
India Institute of Business Development, Gandhinagar, offering a two-year, full-time, residential Postgraduate Diploma in Entrepreneurial Business Management (PGDM-BE).
SP Jain Institute of Management and Research – Mumbai, Start Your Business (SYB) Certification Program, Grow Your Business (GYB) Certification Program, The Entrepreneurial Manager (TEM).
Narsee Monjee Institute of Management Studies, Mumbai, MBA in Social Entrepreneurship
Xavier Institute of Management and Entrepreneurship – Bangalore, offering a one-year Entrepreneurship Development Program (EDP)
Nirma Institute of Management, Ahmedabad, which offers a two-year regular MBA specializing in family business and entrepreneurship.
Amity Business School, Noida, offers a two-year MBA in Entrepreneurship
IIM, Bangalore, specialization in Entrepreneurs and Family Businesses.
IIM Udaipur, Management Development Program for Women Entrepreneurs.
National Institute for Entrepreneurship and Small Business Development (NIESBUD), Delhi
The NIESBUD is an apex institute in the area of entrepreneurship and small business development under the Ministry of Micro, Small and Medium Enterprises, Government of India. It oversees the activities of various institutions and agencies dedicated to business development, particularly in the area of small industry and small business. It also offers numerous training and development courses for budding entrepreneurs and small businesses.
Make the right choice:
In the world of family businesses, the entrepreneurs we celebrate are usually company founders. If you want to be a founder of a company, start your new adventure and learn to navigate, do a pure MBA in Entrepreneurship. However, if you want to join your family business and you are supposed to nurture and grow the founder’s brainchild, you are not expected to be an entrepreneur, but to understand and carry out the founder’s vision, an MBA in Entrepreneurship would be more useful. . .
Therefore, it is imperative that you make the right and informed decision…
Are these mutually exclusive?
If this makes you think that family business management programs are incompatible with entrepreneurship. The reason is because they are for students who are in family businesses that are often tied to tradition and multi-generational. Let me tell you, we need to blur the lines here. Family businesses need to be more entrepreneurial. They need to transmit the entrepreneurial mindset and skills. To create new streams of wealth over many generations, not just pass the business from one generation to the next. We have to come up with the concept of ‘family business’. When a leadership transition occurs in a family business, the new generation of leadership must be careful to maintain and develop the networks and knowledge of previous leaders, while expanding their own networks. This will ensure that the business can continue to be entrepreneurial in the future.
And when they do, the distinction between Entrepreneurship and Family Business Management studies would begin to blur…