Role of Religious Affiliation of Family Firm Founder on Organisational Performance

By Anupreet Kaur, Sougata Ray, Kavil Ramachandran

Citation

Kaur, Anupreet., Ray, Sougata., Ramachandran, Kavil. (2024). Role of Religious Affiliation of Family Firm Founder on Organisational Performance .

2024

Abstract

While prior research has explored the intersection of national religious cultures and business practices, the direct impact of family-level religious identity on organizational performance remains insufficiently examined. This study addresses this critical gap by analysing how the religious affiliation of controlling families influences firm performance in a non-Western, multireligious context. Leveraging the unique setting of India—a nation characterized by religious pluralism, with Hinduism as the dominant faith alongside significant minority communities such as Jainism, Zoroastrianism (Parsi), Christianity, and Islam—we investigate the role of family owners’ religious identities in shaping organizational outcomes. We argue that religious logics fundamentally shape the cognitive frameworks, risk orientations, and strategic priorities of family owners, which in turn influence firm performance. Our findings demonstrate that Hindu-owned firms exhibit lower profitability, driven by a pronounced tendency for liquidity hoarding and risk aversion. These effects are further reinforced in family-managed firms, where religious and familial imperatives are embedded within strategic decision-making processes. This study contributes to institutional theory by highlighting religious identity as a form of informal institution that exerts differential impacts on organizational performance. Additionally, it enriches family business research by positioning religion as a critical source of performance heterogeneity, offering nuanced insights into the interplay between religious identity, economic behaviour, and firm outcomes in a multireligious organizational environment.

Sougata Ray is a Professor of Strategy and Entrepreneurship (Practice), Thomas Schmidheiny Chair Professor, and Executive Director of the Thomas Schmidheiny Centre for Family Enterprise, at the Indian School of Business (ISB). Earlier, he served at the Indian Institute of Management Calcutta for over two decades as a Professor of Strategic Management, a member of the Board of Governors, and Dean. He was also a senior-level executive at Infosys Technologies Limited for two years in a strategic role as Head of innovation Lab. He is an alumnus of Indian Institute of Management, Ahmedabad and the Indian Institute of Engineering, Science and Technology, Shibpur.

Professor Ray’s research interests have evolved over the years in understanding various facets of strategic management, entrepreneurship, innovation and the governance of firms and business groups in high-growth economies. Given the ubiquity of family firms in India and observing how family owners and leaders play a pivotal role in shaping the future of enterprises, he was gradually drawn into family business research. In recent years, under the aegis of the Thomas Schmidheiny Centre for Family Enterprise, he has been spearheading a mega programme towards developing a solid research-based understanding of family firms and business groups in India and South Asia. He has also been leading a research programme in the areas of social entrepreneurship, corporate sustainability strategy and practices, bottom-of-the-pyramid initiatives, and involvement of corporations in inclusive and sustainable development.

Professor Ray is one of the most prolific and cited home-grown strategy scholars in India. He has been publishing regularly in reputed scholarly journals and presenting in leading peer-reviewed international conferences. He has received over half a million dollars in research grants, several prestigious research and teaching awards, and numerous award nominations.

He blends over three decades of experiences in diverse roles – as an international-quality academic, research, and institution builder, alongside hands-on corporate managerial and governance roles as an executive, member of the Board of Directors, and co-founder of startups.. He has been an advisor to numerous medium and large corporations, family businesses, and startups, and he has served as Principal Consultant to leading international development agencies. He currently sits on the governing and advisory boards of several listed and unlisted companies, startups, and social enterprises.

Professor Ray has taught in numerous executive education programmes and has designed and conducted many workshops exclusively for owner-managers, entrepreneurs, and C-level executives of companies in India, Asia, Middle East, Nordic and Scandinavian countries. Over the years, he has led over thirty C- level executive delegations to countries on every continent for high-level meetings with the ministers, high-ranking officials, multilateral agencies such as the WTO and ILO, Chambers of Commerce, MNCs, industrial organisations, research labs, and academic institutions.

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