09 March, 2021

MBA: A School For Scions

Research favours the specialised MBA for family businesses

Illustration by Sajith Kumar
MBA: A School For Scions

Family businesses are different.  For most of us, the term evokes a picture of a mom-and-pop store, or some other small enterprise catering to a local market. “But they could also be unimaginably big,” says Arvind Nigam, an INSEAD graduate who’s with Zoho. Take for instance India’s Tata group, the Future Group, Wal-Mart and even Porsche. Even in such behemoths, decisions are often taken by close-knit groups. Management gurus say that such businesses inevitably face the same problem: when and how to pass the baton to the next generation.  When should heirs be given full executive powers? Sometimes, the problem lies at the opposite end of the spectrum: reluctant heirs, who have their own plans. And when the next generation does take over, the biggest challenge that lies ahead of them can be how to expand and where. Should they remain core-business focused or should they diversify? When is it good to go from private to being publicly traded?  All this really boils down to a single issue: how do family-run enterprises differ from publicly...

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