Management of Succession in Family-Owned Businesses

Family-owned businesses, being the most important segment, exert a major influence on a country’s economy. Succession management in family-owned businesses has been extensively researched. Successful succession implies a combination of relationship within the family and the human resource development strategy of the organization. The recent developments in Indian family business suggest that the rules of succession are being rewritten. The trend towards professionalization is catching up with the younger generation to have a competitive advantage over the changing business scenario. Professional managers are also being inducted at the top management level. Keeping in mind the near-inevitability of divisions in family businesses, proactive succession planning will have to be adopted, to minimize the ill effects of feuding factions. Meticulous planning is required to make the family businesses healthy and dependable entities. Plan for management of succession can be formulated and implemented with communication being a binding force. The book introduces the basic concept of succession management and its relevance to family-owned businesses: how they must prepare for future to survive like non-family firms. Succession planning should be viewed for continuity and vision. The greatest challenge for family-owned business is establishment of effective communication, which is understood and practised at all levels for building stronger families and family businesses. There are issues and perspectives focusing on the consequences of lack of succession planning and management. Finally, the cases from Ranbaxy, Reliance etc. shed light on succession management and its importance through generations.