Working PapersBang, Nupur Pavan., Ramachandran, Kavil. "Culture and Trusteeship at Hilti"
Working PapersBang, Nupur Pavan.,Vishwanathan, Anierudh.,Ray, Sougata., Ramachandran, Kavil. "Does Family Ownership Impact Firm Performance?- Evidence from India "Read Abstract >Close >Concentrated ownership of a firm in the hands of a family presents unique opportunities and challenges that may have an impact on the performance of the firm. A unique proprietary database of scientifically classified listed family and non-family firms covering 4,186 firms in India from 1990 to 2016 has been used to study the impact of family ownership on firm performance, thus advancing the debate that has so far been skewed towards studies from the developed markets and larger firms. Family ownership classification used in this considers ownership concentration in the hands of the family, the management control with the family and ownership continuity within the family. Accounting and market measures of firm performance have been used to conduct a time-series cross-sectional comparison of family and non-family firms. Results show that family ownership and control per se are a significant impediment to firm performance for the listed firms in India.

Working PapersBang, Nupur Pavan.,Vishwanathan, Anierudh., Ramachandran, Kavil. "How Family Ownership Impacts Firm Performance- A Study of Listed Firms in India "Read Abstract >Close >Ownership of firms and their impact on firm performance has been a topic of interest for long. Concentrated ownership of a firm in the hands of a family presents unique opportunities and challenges that may have an impact on the performance of the firm. Multiple studies have arrived at differing conclusions with regards to performance of family firms. Using a unique proprietary database of scientifically classified listed family and non-family firms covering 4,186 firms in India from 1990 to 2016, this paper studies the impact of family ownership on firm performance, thus advancing the debate that has so far been skewed towards studies from the developed markets and larger firms. Our treatment of family ownership takes into account ownership concentration in the hands of the family, the management control with the family and ownership continuity within the family. We have subjected the data to many sub-sample and post hoc analyses with several robustness checks to ensure that our findings and conclusions are reliable and valid. Using accounting and market measures of firm performance, we conduct a time-series cross-sectional comparison of family and non-family firms. Our analyses consistently reveal that family firms performed poorly in comparison to non-family firms in India. We observe that family ownership in general has made negative contributions to firm performance. We, therefore, conclude that family ownership and control per se are a significant impediment to firm performance for the listed firms in India. To the best of our knowledge, this is the first large sample study to examine the relationship between family holdings and performance of firms listed in major stock exchanges of India.

Working PapersBhatnagar, Navneet., Ramachandran, Kavil. "How Family Politics Influences New Venture Creation in Family Business"Read Abstract >Close >Family firms comprise significant part of economies around the globe. Creation of new ventures (NV) is vital for their long-term survival. One of the critical success factors of a NV is the process of setting up of the venture. Yet our understanding of the ‘process’ of NV creation in family enterprise context remains limited (Vogel, 2017; Marion et al., 2015; Steier, 2009). Family as a system has its unique dynamics of socio-political pulls and pushes among its members. These forces constantly influence the functioning of the business system as well since family members are different personalities in several ways. They also exhibit varying degrees of influence on the dominant coalition. These lead to variations in the way each member is perceived and dealt with, by the top decision-makers in the family. We posit that NV creation process in family business context is influenced by socio-political forces within the family. This paper examines those socio-political forces and their influence on the NV creation process in family business. In a survey study of 120 Indian family businesses we found that familial socio-political forces significantly influence the NV creation process. Using factor analysis, we identify seven dimensions of familial socio-political influence such as Political/ Social clout and In-group/ Out-Group effects. Family embeddedness of the NV proposer was found to enhance the family’s support for the NV proposal. We conclude with the implications of the study for family firms and offer suggestions for objective assessments of NV proposals.

Working PapersMondal, Arindam., Ramachandran, Kavil., Ray, Sougata. "Multinationalization of Family Firms from India: The Role of Socioemotional Wealth"Read Abstract >Close >We investigate the multinationalization strategy of family businesses from an important emerging market, India. Based on insights from international business, emerging market multinationals and socioemotional wealth literature, we assess how familial heterogeneity may impact various dimensions of their multinationality, namely the scale, scope and direction of it. The hypotheses are tested on 278 family owned Indian firms listed on the S&P BSE 500 index covering a six-year period from 2007-08 to 2012-13. We find that differences in family involvement alter the perceptions of potential gains and losses to socioemotional and financial wealth; thus impacts different dimensions of multinationality differently.

Working PapersBhatnagar, Navneet., Ramachandran, Kavil. "Ready, Steady, Go!’: Influence of Family Politics on New Venture Creation in Family Business"Read Abstract >Close >Family firms comprise significant part of economies around the globe. Creation of new ventures (NV) is vital for their long-term survival. One of the critical success factors of a NV is the process of setting up of the venture. Yet our understanding of the ‘process’ of NV creation in family enterprise context remains limited (Vogel, 2017; Marion et al., 2015; Steier, 2009). Family as a system has its unique dynamics of socio-political pulls and pushes among its members. These forces constantly influence the functioning of the business system as well since family members are different personalities in several ways. They also exhibit varying degrees of influence on the dominant coalition. These lead to variations in the way each member is perceived and dealt with, by the top decision-makers in the family. We posit that NV creation process in family business context is influenced by socio-political forces within the family. This paper examines those socio-political forces and their influence on the NV creation process in family business. In a survey study of 120 Indian family businesses we found that familial socio-political forces significantly influence the NV creation process. Using factor analysis, we identify seven dimensions of familial socio-political influence such as Political/ Social clout and In-group/ Out-Group effects. Family embeddedness of the NV proposer was found to enhance the family’s support for the NV proposal. We conclude with the implications of the study for family firms and offer suggestions for objective assessments of NV proposals.

Working PapersRamachandran, Kavil., Bhatnagar, Navneet.,Ray, Sougata. "Togetherness in Indian Family Businesses"
Working PapersBhatnagar, Navneet., Ramachandran, Kavil., Ray, Sougata. "Bridging the Leadership Gap: How Indian Family Firms are Developing the Next Generation Members"Read Abstract >Close >Effective leadership transition across generations is important for continuity of family legacy and control over the family business. Weak next generation leadership is a major reason attributed for the failure of family firms (Miller, 2015). The next generation members are key constituents of the family human capital (Sirmon & Hitt, 2003) and critical links in transfer of tacit knowledge (Royer et al., 2008) who require careful nurturing (Sharma, 2008). The ability to develop committed and competent leaders in younger generations is critical to family business performance and survival (Ward, 2011; Sharma & Irving, 2005; Brockhaus, 2004; Foster, 1995; Handler, 1994). Next generation leadership development is a long and significant process but it has not been studied in –depth, particularly in an emerging economy like India. Following case methodology, in this paper, we examine case studies of next generation leadership development process of 15 Indian family firms and identify the pathways adopted by the senior and next generation leaders. The key questions we asked to understand the phenomenon were: (1) How Indian family businesses developed their next generation leaders?, (2) what processes did the firms follow that were successful in developing next generation leaders?, and (3) what specific roles did the senior and next generation leaders play at various stages of the leadership development process. Based on the common patterns that emerged from the cases, we developed a conceptual framework for next generation leadership development process, mapping all the capability development stages observed. We observe two broad phases of leadership development that involve acquisition of multiple capabilities. Phase I involves intrapersonal and Phase II interpersonal capabilities in the family business context. Leaders who adhere to the building up of core capabilities tend to be more successful. For family businesses that failed to achieve such leadership transition, we observed absence of certain keys stages. We conclude the paper with practical implications.

Working PapersLampel, Joseph., Ramachandran, Kavil., Bhalla, Ajay. " Inter-Institutional Venture Governance in Indian Family Firms "Read Abstract >Close >

Working PapersMondal, Arindam.,Bhadra, Shantanu., Ramachandran, Kavil. "Does Family Involvement Matter for Internationalization of Firms? An Investigation into Emerging Multinationals from India"Read Abstract >Close >Emerging Multinationals (EMNEs) have attracted significant research attention in the recent years so are the internationalizing family firms (FFs) for being embedded in unique contexts - country for the former and family for the later. As FFs constitute a significant proportion of the EMNEs in some big emerging economies like India, drawing from both research streams, we investigate how family owned EMNEs differ from non-family EMNEs and how the heterogeneity of family owned EMNEs explains the full spectrum of internationalization of family owned EMNEs - spanning from lower commitment mode of exports to higher commitment mode of overseas foreign direct investments and subsidiary formations. Anchoring our research in the socioemtional wealth perspective in family business literature and behavioral risk taking theory we theorize how family owned EMNEs would differ in their internationalization trajectories from the non family owned EMNEs and how non-family professional managers shape the internationalization trajectories of family owned EMNEs differently as compared to those led by owner-managers. We test our predictions using a proprietary, longitudinal panel data set of 213 EMNEs from India featuring in the S&P BSE 500 index covering a six year period from 2007-08 to 2012-13. We report general empirical support for most of our predictions.

Working PapersBhatnagar, Navneet., Ramachandran, Kavil., Ray, Sougata. "Preparing the Next Generation Battle Ready: Learnings from Indian Family Firms"Read Abstract >Close > Weak next generation leadership is a key reason for the failure of family firms (Miller, 2015). Hence, it is critical to develop effective next generation leadership to ensure long-term sustenance of family business. Continuity of family legacy and control over the family business depends on successful leadership transition across generations. Next generation leadership development involves a systematic process spread over time and acts. However, inspite of its significance the leadership development process has not been adequately studied, particularly in an emerging economy like India. Following case method this paper examines case studies of next generation leadership development process of 15 Indian family firms and identifies the pathways adopted by the senior and next generation leaders. The study finds that there are two distinct phases of leadership development that involve acquisition of multiple capabilities in several stages. The first phase involves stages that contribute to building next generation leader’s intrapersonal capabilities. The second phase involves stages in which the leader builds interpersonal capabilities in the family business context. Some of the stages in both the phases were found to be essential for successful leadership development. Family businesses in which these key stages in leadership development were absent failed to achieve an effective leadership transition. We present a conceptual framework for next generation leadership development process, mapping all the capability development stages observed. We conclude the paper with implications and suggestions for future research.

Working PapersChaudhuri, Bikramjit Ray.,Ray, Sougata., Ramachandran, Kavil. "Effect of Business Group Affiliation on Corporate Environmental and Social Sustainability Strategy"Read Abstract >Close >In spite of an overwhelming importance of business groups (BGs) in economic value creation, how they approach and contribute to sustainable development and social value creation, and whether they differ from other firms in executing corporate sustainability strategy, has hardly been systematically researched. Using a proprietary dataset built from a questionnaire survey and secondary data of 163 Indian publicly listed firms, we theorize that BG affiliation makes firms more inclined to execute corporate sustainability strategy. We also hypothesize the effect of the stock of fungible resources with these strategies, and the negative moderating effects of BG affiliation in these relationships, drawing from BG and resource-based view literature. Our research indicates that BGs make as significant a contribution to sustainable development as in the economic development

Working PapersMondal, Arindam., Ramachandran, Kavil., Gadepalli, Sarada. "How Managerial Discretion Influences Internationalization of Indian Family Managed Firms "Read Abstract >Close >We investigate the impact of family ownership and CEO attributes on internationalization strategy of family managed firms. Empirical results based on a unique panel dataset of large Indian firms for the period 2007 to 2013 indicate that while concentrated family owners create impediments in internationalization efforts, firms with either a first generation founder CEO or a family CEO with international exposure at the helm, are able to internationalize more effectively. We also theorize the moderating influence of different family CEOs on the relationship between family ownership and internationalization. Our results suggest that differential objectives of the CEOs derived from their idiosyncratic ownership and behavioural traits are responsible for heterogeneous risk behaviour of family managed firms. Our study has several implications for the theory of family firm internationalization.

Working PapersBang, Nupur Pavan., Ramachandran, Kavil. "DODLA’S DILEMMA"Read Abstract >Close >D. Sunil Reddy established Dodla Dairy in the year 1995 at Nellore district of Andhra Pradesh, as a greenfield company. An industrial engineer from Mangalore University, Sunil started Dodla Dairy at the age of 27, with the seed money given by his father. He would often wonder if the brand ‘Dodla’ and the Company sustain beyond ‘Sunil Dodla’. While Sunil continues to put in efforts to increase capacity, expand and capture more market share, he keeps asking himself, “What next”, “How do I build a legacy?” If the company had to move to the next orbit, both in term of size (revenues, assets, market share) as well as professionalization, certain organizational changes were necessary. “What were these changes and who would do it?” How could Sunil better prepare himself and the company for the future? How would the company move from being a family owned enterprise to a professionally run, sustainable organization? Would one of his daughters bring about that freshness by joining the company and yet provide continuity in terms of the family values? Would it be an outsider? “Who after me?” thought Sunil. After two decades, a certain degree of fatigue was beginning to set in and he had been contemplating his own role in the company. The days when he was under pressure or had a bad day, he would think of selling off the company, take the money and live peacefully ever after. On the other days, he would think of building a sustainable organization and leaving a legacy!

Working PapersRamachandran, Kavil., Bhatnagar, Navneet. "Touchdown Footwear on Slippery Slope"Read Abstract >Close >This case is based on the professionalization and governance challenges faced by Touchdown Footwear Limited (TFL) – an Indian mid-sized footwear manufacturing family business. It was setup in1965 by three brothers, Ramnath, Krishna and Ganesh Pai who had inherited their father’s rubber trading business. Initially, TFL made flip flop slippers and catered to the local market. Over the years, TFL had a larger product portfolio, and by 2013, they had a pan-India presence with some exports to African markets. In the early years, the three brothers managed all functions. As the next generation grew up, they started joining the firm and took up different roles often based on business exigencies. By 2013, TFL had a turnover of 6.23 INR, but lacked a clear strategy and professional management. In the absence of appropriate structure, systems and processes, decision-making was ad-hoc. Inefficiencies and wastages were evident all across, and working capital was under severe strain. The firm suffered from governance deficit at both family and business levels. Lack of clear policies and processes delayed many crucial decisions. Earlier attempts to professionalize the business failed to achieve the desired results as family members neither had clear policies nor could change their mindset. Besides, there were questions about the level of commitment and discipline of the next generation. Vivek, the case protagonist, who managed TFL’s finances, realized the need for a transitional change on multiple fronts to sustain the business but was unclear about roadmap.

Working PapersRamachandran, Kavil. "Krishna's Dilemma"Read Abstract >Close >The case presents a typical decision situation faced by managers. The context is the students'convocation of an academic institute. The organisers have to decide the most appropriate venue that can accommodate the institute's growing class of students and their parents. The case discusses several available alternatives and explains their merits and demerits to help the readers arrive at an appropriate solution.

Working PapersRamachandran, Kavil., Ray, Sougata.,Chakrabarti, Amit Baran. "Effect of Family Business Group Heterogeneity on New Venture Creation: Evidence from India"Read Abstract >Close >The purpose of this paper is to examine the impact of family business group (FBG) heterogeneity on new venture creation in India. Using a multiple regression model, this study examines the moderating effect of FBG heterogeneity (relative size and relative profit) on FBG size and new venture creation relationship in a sample of 8344 new projects initiated by 526 Indian FBG firms. We find that, bigger FBG firms on average have higher positive impact on new venture creation, and this positive impact is further enhanced by powerful firms within the FBG. This study adds to literature on the strategic choices adopted by family firms as too little is known about the effect of family business group heterogeneity on new venture creation in emerging markets such as India.

Working PapersRamachandran, Kavil., Ray, Sougata.,Chakrabarti, Amit Baran. "Effect of Business Group Heterogeneity on New Venture Creation: Evidence from India"Read Abstract >Close >This paper examines how heterogeneity among business group (BG) affiliated firms influences key strategic choices like new venture creation. The study considers heterogeneity among groups based on size, and heterogeneity within groups based on resources, relative importance and structural considerations. Using a database of 8344 new projects initiated by 526 BG firms within a 28 year period from 1988 to 2015 we find that, bigger groups are more likely to be associated with higher intensity of new venture creation. Moreover we found support that inter-organizational power from structural considerations and resources enhance the positive impact of BG size on new venture creation.

Working PapersRamachandran, Kavil., Ray, Sougata.,Chakrabarti, Amit Baran. "Family Business Group Heterogeneity and New Venture Creation: Evidence from India"Read Abstract >Close >Purpose – The purpose of this paper is to examine the impact of family business group (FBG) heterogeneity on new venture creation in India. Design/methodology/approach – Using a multiple regression model, this study examines the moderating effect of FBG heterogeneity (relative size, relative profit, and relative market share) on FBG size and new venture creation relationship in a sample of 8344 new projects initiated by 526 Indian FBG firms. Findings – First, bigger FBG firms on average have higher positive impact on new venture creation. Second, FBG firms that have higher relative profit or higher relative size are able to enhance the positive impact of FBG size on new venture creation. Finally we found that FBG firms within bigger groups that have higher relative market share are able to execute higher number of new ventures, but are conservative in terms of the size of projects undertaken. Originality/value – Too little is known about the effect of family business group heterogeneity on new venture creation in emerging markets such as India.

Working PapersRamachandran, Kavil., Ray, Sougata.,Chakrabarti, Amit Baran. "Impact of Family Business Group Characteristics on New Venture Creation: Evidence from India"Read Abstract >Close >The purpose of this paper is to examine the impact of family business group characteristics on new venture creation in India. Using a multiple regression model, this study examines the effect of family business group characteristics (public listing, age, and size) on new venture creation in a sample of 16455 new projects initiated by 1659 Indian firms. We find that, FBG firms on average have higher positive impact on new venture creation. Moreover, FBG firms that are listed or are bigger in size or are older enhance the positive impact of FBG membership on the number of new ventures undertaken. We also found that older and bigger firms are conservative in terms of the size of projects undertaken. This study contributes to study of strategic choices adopted by family firms by examining heterogeneity among family firms in emerging market context such as India

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