Professional Documents
Culture Documents
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Professionalism
1. Professionalism and A Professional 2. Factors that make a family business unique 3. Cultural environment in a family business 4. Complex roles and relationships 5. Management practices in a family business 6. Managerial succession in a family business 7. Problems and pitfalls of a family business
Professionalism
Professionally Managed Co. or Professionals
Everyone wants to become a "professional" these days or to work in a professionally managed organisation. While being professional may be a virtue, what exactly is implied by being a professional is often found lacking in individuals and companies. In fact, some family owned companies have higher professional standards than the so-called professionally managed companies.
A Professional
To be a professional, it implies that a person is good in his job and can be depended upon putting in his best effort. A professional or a company needs to be evaluated against the following yardsticks. A professional therefore means: Highly educated person (or a company employing) engaged in challenging work providing considerable autonomy of working Highly competent and conscientious and Trustworthy following strict ethical and moral standards.
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In India, 95% of registered firms are family businesses. Family businesses are the key drivers of the economy. Companies with founding family participation performed better than non-family businesses. (Standards & Poor s 500)
Wal-mart, USA Revenues $245b, Sam Walton family Fiat group, Italy Revenues $54.7b, Agnelli family IKEA, Sweden Revenues $10.4b, Kamprad family Tata group, India Revenues $7.9b, Tata family
Weaknesses: Poor management, inefficient funds growth Lack of procedures and practices (articulated) Lack of discipline
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Business
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OWNER SHIP
FAMILY
BUSINE SS
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Organisation structure with authority/ responsibility relationships among the board, family and senior management Key family governance policies
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1. Family Meetings: where the family stakeholders meet, peers discuss issues of common interest for family business success. Lines of communication are established and opened on a regular basis at least once a year. Family Council: Many families establish a Family Council a family executive board to act between family meetings. If the family is to own and manage a business for generations then all stakeholders need a place to be heard as equals individuals need to move from family relationships to business partners. 2. Advisory Boards bring a challenge and objectivity to business management. Real outsiders as advisors are a requirement for the board to work and a true board of directors is even better. This group can help separate the family from the business issues. They can mediate big issues. They can add vision and wisdom. And, they can make management accountable. 3. Family Constitutions are nothing more than an assembly of written policies and agreements both legal and informal. Families that can identify issues, both current and future, and debate their resolution to a consensus, then put it in writing, are highly likely to run a successful business.
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Compensation
Leadership
Business Concern
Care and nurturing of family members Employment and advancement in the firm Loyalty to the family
Production and distribution of goods and/or services Need for professional management Need for effective and efficient operation of the firm
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Assignment
Q DESCRIBE THE 3-CIRCLE MODEL OF FAMILY BUSINESS AND DISCUSS THE CONTRIBUTIONS MADE BY Indian FAMILY BUSINESSES WITH EXAMPLES FROM THE HOUSE OF : TATA 1-10 61-70 AMBANI 11-20 71-80 SINGHANIA 21-30 81-90 BIRLA 31-40 91-100 SHRIRAM 41-50 101-110 MODIS 51-60 111-120, 59 JINDAL Date of submission: 4/3/11 12/3/11
Business Pattern
Paternalistic Laissez-faire Participative Professional
Governance Pattern
Paper Board Rubber-Stamp Board Advisory Board Overseer Board
Family Pattern
Patriarchal Collaborative Conflicted
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Succession Planning
Family Roles and Relationships
Parental Concerns in succession of business:
Does the child possess the temperament and ability necessary for business leadership? Can the founder, motivate my child to take an interest in the business? Type of education and expertise most helpful in preparing my child for leadership Timetable for promoting my child How to avoid favoritism in managing and developing my child? How to prevent the business relationship from damaging or destroying the parentchild relationship?
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A Professional
To be a professional, it implies that a person is good in his job and can be depended upon putting in his best effort. A professional or a company needs to be evaluated against the following yardsticks. A professional therefore means: Highly educated person (or a company employing) engaged in challenging work providing considerable autonomy of working Highly competent and conscientious and Trustworthy following strict ethical and moral standards.
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Elements of Professionalism
Accountability: towards whatever job is performed by
him.
Concern for others: without any expectation in return Excellence: Knowledge, competency, skillful,
communicative. Integrity: honesty, morality, values, undivided loyalty. etiquettes, manners shown towards colleagues and others.
Dutiful and Respectful: duty bound, comradeship, Receptive: to new ideas, ready to experiment and take
calculated risk
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Solution:
Identify family-only reserved positions in advance. Treat both family and nonfamily employees fairly in matters of reward and promotion.
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1. Family vs. Working Relationships 2. Full Family Employment 3. Lack of Professionalism 4. No Succession Plan leading to Rivalry 5. Input from Younger Generations
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No Succession Plan
Lack of succession plan or otherwise are the causes of continuous sibling rivalry within the family Sibling rivalry cant be avoided but can be minimized. Dont use arbitrary approach to these issues; use management approach instead.
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