Working Papers

Working PapersBang, Nupur Pavan.,Bhatia, Nandil.,Ray, Sougata., Ramachandran, Kavil. "Pledging of Shares and Primary Shareholders: Antecedents to the Decision to Pledge"Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >While borrowing funds through share pledging (offering shares as collateral by primary shareholders to avail loans from financial institutions) is widespread in many institutional contexts, research on the causes and consequences of this corporate governance phenomenon is limited. We examine the influence of firm ownership (family or non-family), business group affiliation and size of business group on the decision to pledge shares. We find that business group affiliation and family ownership have a positive impact, while business group size has a negative impact on both likelihood and propensity to pledge shares in affiliates.

Working PapersBhatnagar, Navneet., Ramachandran, Kavil., Chittoor, Raveendra. "Taking Governance to the Next Level: Learnings from the Case of Merck"Thomas Schmidheiny Centre for Family Enterprise
Working PapersBhatnagar, Navneet.,Ray, Sougata., Ramachandran, Kavil. "Developing the Next Generation Leadership in Family Business"Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >Effective leadership transitions across generations are crucial for long-term sustenance of family business - the dominant form of business organisation across the world. Yet, most family businesses struggle to survive beyond three generations. Weak next-generation leadership is a major reason attributed for this failure. Existing leadership-development frameworks do not take into account the peculiarities of family business context. We analyse next-generation leadership development pathways adopted by 15 large Indian family businesses and present a framework for developing next-generation family business leaders.

Working PapersBang, Nupur Pavan., Ramachandran, Kavil. "Evidence on Family Firm Performance and Relevance of Context in an Emerging Economy"Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >Ownership of firms and their impact on firm performance has been a topic of interest for long. Concentrated ownership of a firm in the hands of a family presents unique opportunities and challenges that may have an impact on the performance of the firm. Multiple studies have arrived at differing conclusions with regards to performance of family firms. Using a unique proprietary database of scientifically classified listed family and non-family firms this paper studies the impact of family ownership, control and management on firm performance through the lens of external and internal context. It thus advances the debate that has so far been skewed towards studies from the developed markets, larger firms and micro analysis. Using accounting and market measures of firm performance, we conduct a time-series cross-sectional comparison of family and non-family firms. Our analyses consistently reveal that family firms performed poorly in comparison to non-family firms in India. We also find that the impact of family does not weaken over time and that family management results in poorer performance. We, therefore, conclude that family ownership, control and management per se are a significant impediment to firm performance in emerging markets contexts like India.

Working PapersRamachandran, Kavil., Bhatnagar, Navneet.,Ray, Sougata. "Gridlock that Family Firms Build for Themselves"Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >One of the main reasons for family business failure is the inability to manage the challenges that arise from the growing complexities of the intertwined business and family systems. Though scholars have studied the challenges of growing business complexity, the effect of its interplay with the growing family complexity has not been adequately examined. Using multiple-case study method in the Indian family business context, this paper examines the interplay of the increasing complexity in both the systems. The paper finds that family businesses get trapped in a decision-making gridlock that they themselves create without being consciously aware about it. The paper identifies five stages of the decision-making gridlock and also suggests how family businesses can avoid the gridlock trap.

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