{"id":763,"date":"2018-02-26T10:16:29","date_gmt":"2018-02-26T10:16:29","guid":{"rendered":"http:\/\/blogs.isb.edu\/centre-for-family-enterprise\/?p=763"},"modified":"2025-12-31T09:39:23","modified_gmt":"2025-12-31T09:39:23","slug":"the-rise-and-rise-of-family-firms","status":"publish","type":"post","link":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/2018\/02\/26\/the-rise-and-rise-of-family-firms\/","title":{"rendered":"The Rise and Rise of Family Firms"},"content":{"rendered":"

Though late on the scene, standalone family firms have established themselves as formidable players<\/em><\/p>\n

This article was first published in Forbes India magazine, Issue: March 02, 2018; Authors: Kavil Ramachandran and Nupur Pavan Bang<\/p>\n

http:\/\/www.forbesindia.com\/article\/column\/the-rise-and-rise-of-family-firms\/49485\/1<\/a><\/p>\n

The year 1991 ushered in a new dawn for the Indian economy with economic reforms across sectors. The entrepreneurial spirit among Indians took advantage of the opportunities, and a new class of family businesses\u2014the standalone family firms (SFFs)\u2014emerged.<\/p>\n

In a paper titled Family Business 1990-2015: The Emerging Landscape published by the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business in July 2017, we said that by 2015, SFFs accounted for 57 percent of the 4,809 listed firms studied. Close to 73 percent of these were incorporated between 1981 and 1995. SFFs were, in a sense, a creation of the new reforms.<\/p>\n

Prominence in the ecosystem<\/strong><\/p>\n

Though SFFs emerged late in the entrepreneurship ecosystem, they soon established themselves as an integral and leading player, belying worries about the potential of family firms to withstand competition. Evidence suggests that the removal of restrictions and controls led to this spurt. Several factors have shaped the destiny of SFFs.<\/p>\n

New opportunities<\/u>: Post-1991, structural changes in the economy and industry provided multiplier effects. Many entrepreneurs were either from business families or became one because of ownership structures. Reduced controls enabled the entry of first-generation-entrepreneurs-turned-SFFs into new territories. Ease of access to the capital markets enabled them to raise funds early on. The average difference between their listing year and their incorporation year was 10.01 years, much lower than business group-affiliated firms or MNCs.<\/p>\n

Need for scale to be competitive<\/u>: The removal of ceilings on capacity and investment, the need to improve efficiency, and scale up led SFFs to focus on a single firm with related products, services and markets. Entrepreneurs did not need to diversify and establish multiple firms to grow, as was the case earlier.<\/p>\n

Break-up of the joint family<\/u>: Historically, business groups had flourished under the ownership of joint families. The emergence of nuclear families meant there was room for next generations to get involved in the same business, without the need to incorporate multiple firms for the members of the next generations.<\/p>\n

Unique value creation by SFFs<\/strong><\/p>\n

SFFs have long-term orientations towards success across generations; rarely is enterprise exit an option.<\/p>\n

Most successful SFFs have a strong synthesis of entrepreneurial energy, professional discipline and organisational governance. Promoters with sound family governance provide a strong platform to build the enterprise on a rich resource pool of emotional support, committed manpower and continued purpose.<\/p>\n

One of the compulsions faced by SFFs is to remain together for economic reasons, if not for emotional reasons.<\/p>\n

Emerging challenges<\/strong><\/p>\n

More than half of SFFs are less than 30 years old, with the founders still actively involved in most. Many would be staring at a change of guard soon. It needs to be seen if these firms survive the change.<\/p>\n

SFFs have to pay greater attention to their future strategy, professionalisation and governance at family and business levels. There is every chance of a well-run SFF getting into a growth trap unless proactive action is taken on strategy, professionalisation and governance.<\/p>\n","protected":false},"excerpt":{"rendered":"

Though late on the scene, standalone family firms have established themselves as formidable players This article was first published in Forbes India magazine, Issue: March 02, 2018; Authors: Kavil Ramachandran and Nupur Pavan Bang http:\/\/www.forbesindia.com\/article\/column\/the-rise-and-rise-of-family-firms\/49485\/1 The year 1991 ushered in a new dawn for the Indian economy with economic reforms across sectors. The entrepreneurial spirit […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false},"categories":[2],"tags":[],"yoast_head":"\nThe Rise and Rise of Family Firms - Thomas Schmidheiny Centre for Family Enterprise<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/2018\/02\/26\/the-rise-and-rise-of-family-firms\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Rise and Rise of Family Firms - Thomas Schmidheiny Centre for Family Enterprise\" \/>\n<meta property=\"og:description\" content=\"Though late on the scene, standalone family firms have established themselves as formidable players This article was first published in Forbes India magazine, Issue: March 02, 2018; Authors: Kavil Ramachandran and Nupur Pavan Bang http:\/\/www.forbesindia.com\/article\/column\/the-rise-and-rise-of-family-firms\/49485\/1 The year 1991 ushered in a new dawn for the Indian economy with economic reforms across sectors. The entrepreneurial spirit […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/2018\/02\/26\/the-rise-and-rise-of-family-firms\/\" \/>\n<meta property=\"og:site_name\" content=\"Thomas Schmidheiny Centre for Family Enterprise\" \/>\n<meta property=\"article:published_time\" content=\"2018-02-26T10:16:29+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-12-31T09:39:23+00:00\" \/>\n<meta name=\"author\" content=\"Editorial team\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Editorial team\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/2018\/02\/26\/the-rise-and-rise-of-family-firms\/\",\"url\":\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/2018\/02\/26\/the-rise-and-rise-of-family-firms\/\",\"name\":\"The Rise and Rise of Family Firms - Thomas Schmidheiny Centre for Family Enterprise\",\"isPartOf\":{\"@id\":\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/#website\"},\"datePublished\":\"2018-02-26T10:16:29+00:00\",\"dateModified\":\"2025-12-31T09:39:23+00:00\",\"author\":{\"@id\":\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/#\/schema\/person\/36b0b1fce0228ee6b0380926861571cc\"},\"breadcrumb\":{\"@id\":\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/2018\/02\/26\/the-rise-and-rise-of-family-firms\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/2018\/02\/26\/the-rise-and-rise-of-family-firms\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/2018\/02\/26\/the-rise-and-rise-of-family-firms\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The Rise and Rise of Family Firms\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/#website\",\"url\":\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/\",\"name\":\"Thomas Schmidheiny Centre for Family Enterprise\",\"description\":\"Creating value for families and businesses through research and innovation\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/#\/schema\/person\/36b0b1fce0228ee6b0380926861571cc\",\"name\":\"Editorial team\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/20fb226145337a9ce5d93494a13b2d55?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/20fb226145337a9ce5d93494a13b2d55?s=96&d=mm&r=g\",\"caption\":\"Editorial team\"},\"sameAs\":[\"https:\/\/blogs.isb.edu\"],\"url\":\"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/author\/isb_blog_user_admin\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"The Rise and Rise of Family Firms - Thomas Schmidheiny Centre for Family Enterprise","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/2018\/02\/26\/the-rise-and-rise-of-family-firms\/","og_locale":"en_US","og_type":"article","og_title":"The Rise and Rise of Family Firms - Thomas Schmidheiny Centre for Family Enterprise","og_description":"Though late on the scene, standalone family firms have established themselves as formidable players This article was first published in Forbes India magazine, Issue: March 02, 2018; Authors: Kavil Ramachandran and Nupur Pavan Bang http:\/\/www.forbesindia.com\/article\/column\/the-rise-and-rise-of-family-firms\/49485\/1 The year 1991 ushered in a new dawn for the Indian economy with economic reforms across sectors. The entrepreneurial spirit […]","og_url":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/2018\/02\/26\/the-rise-and-rise-of-family-firms\/","og_site_name":"Thomas Schmidheiny Centre for Family Enterprise","article_published_time":"2018-02-26T10:16:29+00:00","article_modified_time":"2025-12-31T09:39:23+00:00","author":"Editorial team","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Editorial team","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/2018\/02\/26\/the-rise-and-rise-of-family-firms\/","url":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/2018\/02\/26\/the-rise-and-rise-of-family-firms\/","name":"The Rise and Rise of Family Firms - Thomas Schmidheiny Centre for Family Enterprise","isPartOf":{"@id":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/#website"},"datePublished":"2018-02-26T10:16:29+00:00","dateModified":"2025-12-31T09:39:23+00:00","author":{"@id":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/#\/schema\/person\/36b0b1fce0228ee6b0380926861571cc"},"breadcrumb":{"@id":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/2018\/02\/26\/the-rise-and-rise-of-family-firms\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/2018\/02\/26\/the-rise-and-rise-of-family-firms\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/2018\/02\/26\/the-rise-and-rise-of-family-firms\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/"},{"@type":"ListItem","position":2,"name":"The Rise and Rise of Family Firms"}]},{"@type":"WebSite","@id":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/#website","url":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/","name":"Thomas Schmidheiny Centre for Family Enterprise","description":"Creating value for families and businesses through research and innovation","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/#\/schema\/person\/36b0b1fce0228ee6b0380926861571cc","name":"Editorial team","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/20fb226145337a9ce5d93494a13b2d55?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/20fb226145337a9ce5d93494a13b2d55?s=96&d=mm&r=g","caption":"Editorial team"},"sameAs":["https:\/\/blogs.isb.edu"],"url":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/author\/isb_blog_user_admin\/"}]}},"_links":{"self":[{"href":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/wp-json\/wp\/v2\/posts\/763"}],"collection":[{"href":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/wp-json\/wp\/v2\/comments?post=763"}],"version-history":[{"count":1,"href":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/wp-json\/wp\/v2\/posts\/763\/revisions"}],"predecessor-version":[{"id":1974,"href":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/wp-json\/wp\/v2\/posts\/763\/revisions\/1974"}],"wp:attachment":[{"href":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/wp-json\/wp\/v2\/media?parent=763"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/wp-json\/wp\/v2\/categories?post=763"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.isb.edu\/centre-for-family-enterprise\/wp-json\/wp\/v2\/tags?post=763"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}