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Family owned business management vs professional companies

In India, family owned businesses have done very well. They generate a lot of jobs and keep the economy growing. Millions of employees work with a single entrepreneur managed or family businesses. Quite a few of such family businesses grow into empures, big enough to take on the might of the best multinational companies. But the original small company culture tends to get retained. Some like it, some don’t.

Shantanu Bhattacharya has worked with both types of companies and has strong opinions about why the family owned business model doesn’t work for him. Shantanu is also a King Kong when it comes to Ping Pong. A very talented Table-Tennis player who could have done very well in sports (national and international level) if the corporate work hadn’t lured him in.

Family business management – Advantages and disadvantages

Family business managementMy Background: A Mechanical Engineer with Professional Management Diplomas from IIM Lucknow & ICFAI. I have around 17 years of experience in various roles and functions and have been part of some Large Organizations. I also have around 6 years experience of running an Organization which was built from Zilch.

I have put down my thoughts from experiences which I have had while working with some of the Family owned business groups visa-vis the MNC culture.

So what is it about these companies where I have seen people spend their entire career, do the same mundane job, follow a monotonous routine and still not want to look for a change?

Here are the pros of being associated with these kind of Organizations, where there is minimal bureaucracy, easier access to the Top Man of the Organization, a faster growth in terms of fat pay checks and hierarchy, quicker decisions being taken and a feel of being part of one big family…so?

So far so good…but is it true for everybody who work here, necessarily not and that’s is one of the biggest cons, here one needs to be of a kind who can please and appease and get their way to the top, say a YES to every YES coming from the TOP. These typically are not organizations which are driven by policies & processes, most of these organizations have ad-hoc policies in place which get twisted and ‘made to fit‘ depending on a particular situation

For those who cannot accept to see a downfall because of unilateral decisions being taken find it a very difficult place to work, a small scuffle with the top boss and you could find yourself in an unwanted position in the organization, and in no time hunting for a new job.

In my opinion, after seeing the greener and not so greener pastures of both MNCs and the Family Owned / Single Owner Organizations, I feel one should start his / her career in these kind of organizations, where there is an opportunity to cut across lot of domains and functions, choose where one wants to be and then pursue a career in a more structured and process-oriented organizations.

Do I have the right or the authority to write on this subject? Maybe not, however I am writing only from what I have experienced…an experience which I think could assist a lot of people wanting to make a choice in their selection of organizations.

There are quite a few who start the family way (in the broader sense) and then recruit professionals to run the organizations…say an Infosys, an L&T and many others and who can forget Apple where even the founder was once sacked for non performance!

I leave this discussion to thoughts and suggestions and contribution from others who have had similar experiences.

Food for Thought: Not everybody should be authorized to start and run organizations, just on the sheer strength of money…as by doing so we may put to risk the career of few thousands or even lacs of people, and with that the overall economic and social structure of the society at large is put to risk.

Some strong sentiments in there, eh? Have you had better or worse experiences with family owned businesses? Share your experience with us in the comments below.

Related read,
Family Business applicants: Tips for MBA essays and recommendations

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Sameer Kamat
About Sameer Kamat
Founder of MBA Crystal Ball. Author of Beyond The MBA Hype & Business Doctors. Here's more about me. Follow me on: Instagram | Linkedin | Youtube

2 thoughts on “Family owned business management vs professional companies”

  1. Interesting post… My 2 pence on this
    Infosys was a Professionally run organization but now with the appointment of Shibu for CEO instead of Mohandas Pai…it has proved to be just another family kind of run business…
    THe employees have no faith in senior management and its falling behind in competitions to firms like Cognizant….
    Talented employees are leaving…
    working with Infy hence you can call it an insider view..

  2. Good comparisons for the two types of organizations.

    To study the entrepreneurial spirit, the family-owned business is ideal. Most often too much process hinders entrepreneurship in larger, more structured organizations.


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