The Indian economy is dominated by family owned businesses which generate most of the world’s economic output and wealth. In some regions of the world, family owned companies virtually control the economy. While family owned companies are often strong competitors they have vulnerabilities that need to be managed. Family managed businesses have been a round for a long time and India has a history of very successful family run businesses. However, most of these have been run with traditional processing and its time for all family business owners to keep up with changing times and know the rules of game.
What has worked till today might not necessarily work in the future. If business owners want to continue doing even half as well as they have been doing, they will need to listen, see and do things they have never done before. A formal training helps simulation of what they need to gear up for.
Family managed businesses face challenges pertaining to interaction of and transaction with family members who want to build their business as well as retain the same within their family lines. Often, family businesses lack the adequate managerial and technical skills to speed up the growth of their businesses. However, since the core of these family businesses is about relationships and interaction within the family, there is a dire need to manage the business with a more objective and professional outlook.
Family controlled businesses are characterized by challenges that threaten their continuity and distinct core competencies required to retain a unique competitive advantage. The challenges are primarily the result of issues presented by the interaction of family, management and ownership particularly where the family wishes to perpetuate its influence and/or control from generation to generation . Similarly the first generation entrepreneurs often witness various difficulties due to inadequate management skills and experience which make them lag behind what they could have actually achieved.
The vast majority of family controlled businesses experience difficulties of moving from one person general management to an institutionalized competence that results into competitive fitness across generations.
For a family business to grow beyond the above mentioned constraints one needs to understand the underlying aspects challenges opportunities that surround the business. And thus there is a need to pursue a formal training that combats these basic issues and also serves as a great learning tool for young entrepreneurs
A professional program in family business management would focus on enhancing entrepreneurial skills, inculcating systematic and strategic planning, designing effective strategies suitable for changing the environment , propelling innovative ideas in marketing, financing and operating a business. It also focuses on applying management science to FMBs, developing family members as family business managers learning to evaluate situations and problems in FMBs, encouraging professionalism in family businesses, imbibing family values and ethics in the business, cultivating global thinking to the applied to the business understanding latest international trends family managed businesses and appreciating strategic issues peculiar to family managed businesses.
During the course of a standard MBA program, students are trained to seek jobs in corporates / MNCs etc, whereas an FMB program trains students with management skills to be entrepreneurs. MBA trains a student to operate one function of management such as marketing operations finance, HR or some other whereas an FMB program provides knowledge of all functions as required for the head of a company. Thus, while a general MBA program divides management into functions and focuses on one specialization, FMB integrates all the functions together.
MBAs are typically not responsible for major decisions of the company in the early stages of their career whereas FMB owners are sculptured to take important decisions for their own company immediately by understanding their own business better. MBA programs are designed to sustain the needs of the company whereas the FMB program is designed for the rapid scaling up of ones business.
An ideal course module addresses small and medium enterprises to focus on developing an in depth knowledge about the issues and challenges in a family business. The sessions also include business owners sharing their experiences with others in turn confronting situations commonly face by all family businesses owners.
Keeping in view different issues which confront family managed businesses, a course should explore challenges faced by businesses in issues relating to:
1) Family continuity challenges for leading family owned businesses for first generation entrepreneurs.
2) Process changes required to meet cost challenges in an economy providing cheap import options.
3) Staffing challenges – Issues related to finding and retaining talented people so you can take the time to grow your business
4) Scaling up the business
5) Usage of technology and access to information.
It is very important to implement the classroom learning back to your business almost immediately so that any challenges faced can be addressed and hence enable a faster learning curve.