Only 13 per cent businesses survive till third generation while 4 per cent businesses survive till 4th generation. One third of the businesses split because of generational conflict. Earlier 60-70 per cent of all businesses were family businesses all across the world and in India this number was between 90 and 95 per cent. However over the years,the percentage has fallen drastically in India,said Ramachandran K,Professor,Indian School of Business,Hyderabad,while speaking in a seminar organised by the CII on Family Business Network (FBN). The decreasing percentage shows the rising conflicts among the families,he added. Attitude is the main reason between the younger and older generations which is splitting businesses and hence decreasing wealth as well,he added. Deliberating on the issues and challenges faced by business families,Sunil Kant Munjal,former president,CII,and Chairman,Hero Corporate Services Limited,said ,Less than 5 per cent companies last family business beyond third generation and this is because of communication gap business values and lack of exposure. If we need to change the scenario,we need to guide our successors with the the family values which gets transmitted somewhere in business and also blend the experience of older generation with the exposure of the new generation at the same time. Munjal also urged the youngsters attending the session to think such as mangers of the company rather than born heads of the company,as once they learn how to manage ,they will know how to rule. He said in business the head of the family need not necessarily be the head of the business. Core competencies of family members should be considered while allocating roles and responsibilities. Munjal,however,did not comment on the recent split in the Hero Group. R M Khanna,President of CII Northern Chapter,said family businesses need to develop a clear vision of what it takes to create an effective sibling team.
