Presented By :

Amit K. Karalia
UGP | SS 10 13 | IIPM Pune

Introduction to Family Owned Business

Introduction to MNCs
Advantages & Disadvantages of Family Owned Business Advantages & Disadvantages of MNCs

Vodafone Vs. Reliance Communications

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One or members of the family have significant ownership.

A Firm is said to be family owned if a person is the controlling shareholder; i.e. a person (rather than a state, corporation, management trust, or mutual fund) can garner enough shares to assure at least 20% of the voting rights and the highest % of voting rights in comparison to the other shareholders.
India has the highest % of Family Business in Asia, accounting for 67% among the listed companies. (Silicon India, Nov 8 2012)
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As defined by the International Labor Organization, a MNC is one, which has its operational headquarters based in one country with several other operating branches in different other countries. Where the H.Q. is located is the home country where as the branches are referred to host nations. Emergence of MNCs in India was after LPG in 1991 and has helped Indian economy grow at a faster pace.
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Advantages
Long term view regarding investments & benefit to the next generation. More committed members or employees towards the business. Employment benefits to the community. Less bureaucratic & improved customer relations through personal contacts. Be your own boss and can be innovative.

Disadvantages
Breeding ground for family issues. Misuse of benefits in the organization.

Under qualified members as stakeholders and at higher positions.

Managerial incompetence & lack of exposure to the business. The interest of the family members may not align with the business due to personal interests.
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Advantages
Wide market opportunity. Efficient research & development system. Provide latest technology. Help for the growth of domestic industry. Control over monopolies. More employment opportunities.

Disadvantages
High competitive advantage over local firms may also destroy the domestic competitors.

Have a highly autocratic structure & less intimate with customers.

May not operate with the nations autonomy. Fetch tax benefits by transfer pricing & large sum of money flows to foreign countries in terms of profits, dividends, royalty.
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Vodafone
British Telecommunication Company. H.Q. London, U.K. Worlds 2nd Largest Telecom Company. 439mn subscribers as of Dec2011. Operates in 30 countries, Partner Networks in 40 nations. Vodafone Global Enterprise wholly subsidiary of Vodafone Group. Established in 2007. Headed by Jan Geldmacher (CEO)

Reliance Comm
Indian Broadband & Telecomunication Company. H.Q. Navi Mumbai Worlds 15th Largest Telecommunication Company. 150mn subscribers as of Dec2011. Operates in India, USA, Europe, Middle East & Asia Pacific Region. Reliance Communications or RCOM is a subsidiary of Reliance Group. Established in 2004. Headed by Anil Dhirubai Ambani.
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Source : Job Buzz, Times Jobs.com

Source : Job Buzz, Times Jobs.com

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