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Family Owned Business Explained

by orbinside


We have seen businesses incorporating, flourishing, and shutting down. We can segregate all businesses into Government Owned Business, Family-Owned Businesses, Friends Owned Business and New trending term, Entrepreneur Startups. We came to conclude that only Family-Owned Businesses have tested time successfully across generations. Longest Survived Family Business is Takenaka Corp. from Japan, was founded in 1610 with 50.2% Family Shareholding. Longest Survived Family Business from India is Tata Sons Private Limited, was founded in 1868 with 66% Family Shareholding.

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Business runs in our blood.

, here in Inda. It embraces the understanding that It is the Family Culture, Financial Acumen, Succession Planning and Adaptation Appetite that keeps business running across generations. Family Businesses account for majority businesses, is not just true across India but across world. Indian GDP accounts family businesses for more than 70%.


Factors contributing towards Family Owned Businesses or Business Houses Success

Adaptation Towards New Trends

Family Business have shown willingness to adapt to new trends and technologies and see it as way to proliferate and profit. They not only use external manpower and resources to upscale and diversify but also, keeps major shareholding with family to exercise control. They act as Institutions to build appetite for risk, readiness to reinvent themselves in line with newer generation views and impedes quick and innovative decision making.

Business Schools Curriculum Advantage

Business Schools offer structured and comprehensive curriculum covering subjects including marketing, finance, operations, strategy and organisational behaviour. They offer these curriculum advantages while business house success lies in utilising these curriculum advantages through recruiting external manpower for proliferation and profit.

Succession Planning

Succession Planning is an important aspect of Family-Owned Businesses. Some may call it nepotism but in actual, it calls for family legacy. More entrepreneurial and adaptive success comes with next succeeding generation. This is the only reason why Non-Family Business could not test the times. Non-Family Business starts with star performer entry and ends up with star performer as It lacks succession planning.

Curriculum Advantages Shaping Business Houses

Strategic Vision

B-School emphasises Strategic Thinking and Long-Term, helps business houses set objectives and devise strategies to achieve them.

Innovation And Adaptation

Innovation and adaptation are crucial for business houses to survive in rapidly changing market landscape. Business School helps business houses embracing innovation and adapting to market realities.


Family owned business can establish standardised processes, streamlined operations and efficient governance structures using business school trained professionals.

Global Perspective

B-Schools also helps business houses understanding international business dynamics, global markets insights, and cross-cultural management to explore new territories.

Factors determining B-Schools Curriculum Advantage Implementation

Cultural Alignment

Business Houses require delicate balance between preserving core values and while adopting modern management.

Resistance to change

They require resistance to change for Advantage Implementation as they need to change their business from old methodologies to new ones.

Resource Constraints

Curriculum Advantage Implementation might require investment in training, technology and talent.

Succession Planning Instruments available for family owned businesses in India

Private Family Trusts

Private Family Trusts are formed to accumulate family income, assets and investment by non-Hindus persons since there is no religion-based restriction over forming Private Family Trusts. It provides an extra layer of protection since investment will be done under the name of trust and managed by trustees for the benefit of beneficiaries. It helps in succession planning for family owned business despite domestic squabbles and having controlled family shareholding over business founded by their forefathers, embracing the concept of united family and its business in India.

HUF – Hindu Undivided Family

HUF are being formed to accumulate Joint-family income and assets and investment by Hindu persons It has religion-based restriction over forming HUF as it covers only Hindu, Sikh, and Jain religion. Investment channels remain the same, but HUF provides an extra layer of protection and benefit as It acts as a separate entity with benefits of Individual and investment will be performed under the name of HUF and managed by its Karta for the benefit of family. It helps in succession planning for family owned business despite domestic squabbles and having controlled family shareholding over business founded by their forefathers, embracing the concept of Hindu undivided family and its business in India.

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