Working PapersRamachandran, Kavil., Ray, Sougata. "Corporate Governance and Role of Board of Directors in Family Business"
Working PapersRamachandran, Kavil., Bhatnagar, Navneet.,Kancharla, Manjusha.,Phadke, Sayali. "Family Business Performance and Survival through Macroeconomic Crises - A Study on Post-Economic Liberalization Era in India (White paper)"Read Abstract >Close >Indian economic landscape had been traditionally dominated by a strong public sector, owing to the socialist leaning economic system that it adopted soon after independence in 1947. Besides the government owned companies, many family owned businesses formed a significant part of the Indian economy. Indian economic reforms were initiated in 1991, to liberalize policies and move towards a market-oriented economy. As part of the reforms, many industrial sectors were opened up for competition, markets were de-regulated, import tariffs and taxes were reduced and foreign investment was permitted. All these changes transformed the Indian economy and brought challenges to family businesses that they had never faced before. Suddenly, family businesses that were used to operate in a protected economy that was a seller's market with little competition were to face global competition. This was a big change that forced businesses across several ownership groups to adjust to the new realities and transform themselves. This study was aimed to analyze and understand how Indian family businesses performed during the two decades since the reforms were initiated in 1991. Additionally, the study was aimed at understanding if there were any significant patterns across times and geographic zones.
Large macroeconomic disturbances are a threat to the survival of business. Major economic upheavals in the recent past had seen the collapse of iconic business organisations. Though all businesses aim to secure their long-term survival, this is an important objective for family businesses because of their core objective of ensuring a lasting family legacy. However, literature on family business survival through macroeconomic crises is sparse. Therefore this paper attempts to study the performance and survival of family businesses across three prominent macroeconomic crises of the last two decades and tries to understand the underlying patterns.
Working PapersRamachandran, Kavil., Bhatnagar, Navneet. "Familial Socio-political Influences on New Venture Creation in Family Business"Read Abstract >Close >New venture (NV) creation has been extensively studied in Entrepreneurship literature (Perrow, 2002). However, recent discussion on NV has moved to ecosystems such as family businesses (Sharma et al., 2014). As a business family grows, creating new business ventures becomes crucial for family business sustainability (Zahra, Hayton & Salvato, 2004). Family plays an important role in NV creation (Rodriguez et al., 2009). Though it is critical for family business sustainability, researchers have regularly emphasized that our understanding of the actual venture creation process in family business requires further exploration (Steier, 2009). particularly, the role played by the socio-political forces within the family in NV creation process is an area that is not understood well. This paper is an attempt to address this crucial gap in literature. The key questions we researched are: (i) Besides commercial viability, what other considerations influence NV creation in family businesses? (ii) Why some economically viable NV proposals receive family’s support, while others do not?, and (iii) What influence do family members have on resource allocation to NVs? We report answers to them based on empirical research done on Indian family businesses.
Working PapersRamachandran, Kavil., Bhatnagar, Navneet. "Family Togetherness’ in Governance and Family Business Sustainability "Read Abstract >Close >The unique competitive advantage of family firms (Sirmon & Hitt, 2003) is derived primarily from the ‘familiness’ (Habbershon & Williams, 1999) of the business. The controlling family’s beliefs, practices and policies are crucial inputs that shape the ‘familiness’ of a family firm. Familiness is a manifestation of the practice of governance in the family (Ramachandran, 2015). It implies agreement among family members on policies and processes related to the management of the interface between family and business (Carlock & Ward, 2010). Well governed business families focus on implementation of the same on a continuous basis that leads to openness in communication, goal-congruence and overall trust among members (Eddleston et al, 2010). Family togetherness is therefore central to enriching family’s resource-bundle. However, the extant literature does not clearly define the meaning of family togetherness, and its role in family business governance. We find answers to questions such as: What is 'family togetherness? Are there different levels of togetherness in different contexts?, and, What are the key constructs of togetherness that can help improve governance in family business.
Working PapersRamachandran, Kavil., Bhatnagar, Navneet. "New Venture Creation in Family Business: Influence of Familial Socio-political Forces"Read Abstract >Close >Family businesses hugely contribute to economies across the world, yet research on family entrepreneurship is fairly young. Though new venture (NV) creation is important for the survival and growth of a family business, our understanding of NV creation process in the family enterprise context remains limited (Steier, 2009). Extant literature suggests that a standalone entrepreneur’s NV creation process is mainly driven by passion and economic rationale, while in the family business context, the NV creation process is shaped by the interactions of both the family and business systems. A NV has to be a subset of the larger set of family enterprise, and its strategy is driven by the overall strategy of the family. This paper studies the forces that influence NV creation process in family business. In a survey conducted among 120 Indian family businesses, we found that besides economic logic, socio-political considerations within the family also greatly influence the NV creation process and the destiny of individual entrepreneurial passion. These forces of positive and negative energies influence at all three critical stages of NV creation – i.e. opportunity recognition, evaluation and resource allocation. The paper concludes with implications for family firms and suggestions for objective evaluation and resource allocation mechanisms.