Dynamics of succession planning for Indian family-owned businesses: learning from successful organizations

Abstract

Purpose The purpose of this paper is to highlight the process and challenges faced by Indian family-owned businesses (FoBs) during succession planning and examine the recent advancements in succession planning of successful Indian FoBs. Design/methodology/approach The authors make use of recent developments in terms of succession planning by FoBs to prepare their impartial comments and summary. Findings It is evident that India has the third highest number of FoBs after China and the USA. The challenges for these organizations during the transition of the ownership to the next generation start from finding a competent family member to manage the conflict between the family and the board. Practical implications The paper provides strategic insight into leading FoBs in India for creating a systematic and robust succession plan in their respective organizations. Originality/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information, and presenting it in a condensed and easy-to-digest format.

Passing on the legacy: exploring the dynamics of succession in family businesses in Pakistan

“…The succession process largely pertains to two key steps: the selection of a successor and the transfer of ownership from the successor to the heir. Scholars (e.g Miller et al , 2003; Budhiraja and Pathak, 2018; Chirapanda, 2019) defined succession process as a complex system as it subsumes two complicated systems: a corporate system as well as a family system. While it has been extensively asserted by family business scholars that a formal succession planning must be conducted; research indicates that it is often an ignored element (Wang, 2002; Decker et al , 2016; Josephy et al , 2017).…”

Importance of Socioemotional Wealth in Indian Family Business Group: The Case of Tata Group

“…The other research works also indicate the dynastic succession in Indian family-owned firms. More than 75% of the Indian family-owned businesses do not have a proper succession plan with an understanding that mostly the eldest son gets the mantle (Budhiraja & Pathak, 2018). There are only few instances like Gujarat Ambuja where the promoter family give up the control of the firm while passing on the baton.…”

Succession Planning as a Critical Management Imperative: a Systematic Review

“…Besides the planning paralysis, conflict between the incumbent and potential successor was identified as a huge impediment to effective SP; the case of Ratan Tata (the incumbent) and Cyrus Mistry (the successor) of Tata Group in India was a case in point (Yadav, Shankar, 2017;Budhiraja, Pathak, 2018). To overcome these impediments, SP must be considered as an important part of a broader talent management strategy meant to ensure that the organization continues to run smoothly regardless of what happens to key personnel (Nyberg et al, 2019;Page, Gerstberger, 2019;Perrenoud, 2020).…”