AR_1502_ENTREPRENEURIAL MANAGEMENT

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ENTREPRENEURIAL MANAGEMENT IN FAMILY
OWNED BUSINESSES

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Abstract
The main purpose of this project is to analyze the impact of entrepreneurial management on
family-owned business. The researcher has conducted this study on the basis of both UK and
Indian markets. The researcher has interviews some entrepreneurs of Tata Group, Bestway
Group, Birla group and ABF group. Apart from that, the researcher has interacted with
some management experts to gather more information related to the topic.
The researcher has conducted the introductory part of the study by providing the topic
background, brief description about the companies, research objectives, aim and questions.
The researcher has analyzed the present scenario of both UK and Indian market in the
research context. Other than that, a brief structure of the overall dissertation has also been
added in the first chapter to provide a reflection of the project.
In the next chapter, the researcher has critically analyzed the topic by mentioning facts and
theories of several scholars. This chapter has added an extra importance of this research, as
the readers may gather knowledge about the previous research study. A conceptual
framework has included in this chapter to depict an overall structure of the concept. The next
chapter is all about the research methodology. This chapter is fully dedicated to discuss
about the Positivism research philosophy, Deductive approach and Descriptive design.
Even, the researcher has mentioned about the sample size, ethical consideration, accessibility
issue, etc. The researcher has added a time table to mention the work schedule for this study.
The chapter four was dedicated to discuss about the data that were collected by the researcher
from the entrepreneurs and the management experts. The researcher has analyzed the findings
of the discussion in detail. It makes the chapter as one of the most important parts of this
study. In the final chapter, the researcher has concluded the overall study. This conclusion
has mainly based on the responses of the management experts and the entrepreneurs. Other
than that, the researcher has linked up the objectives with the questionnaires of both the
groups. In addition, suitable recommendations have also mentioned here. Apart from that, the
researcher has discussed about the future scope of the study too.

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Acknowledgment
I am very glad to deal with this research topic. This research topic has immensely helped me
to gain experience and acquire knowledge. I am also very glad that as this research topic to
understand the topic in a wider manner. I would like to thank my teachers, mentors and
colleagues for helping me out in this particular research work. Without their proper guidance
and help, it would have not been easy to complete my research work in an appropriate
manner. I would also like to thank my friends for helping me out to collect data. Further, I
would also like to thank the business organizations for letting me to collect information.
Thanking You,
Yours Sincerely,
_____________

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Table of Contents
Chapter 1: Introduction..............................................................................................................9
1.1 Introduction:.........................................................................................................................9
1.2 Background of the study:.....................................................................................................9
1.3 Rationale of the study: .......................................................................................................12
1.4 Problem Statement:............................................................................................................14
1.5 Research Aim:....................................................................................................................14
1.6 Research Objectives:..........................................................................................................14
1.7 Research questions:............................................................................................................15
1.8 Structure of the dissertation: ..............................................................................................15
1.9 Summary:...........................................................................................................................16
Chapter 2: Literature Review...................................................................................................17
2.1 Introduction:.......................................................................................................................17
2.2 Conceptual Framework:.....................................................................................................17
2.3 Concept of Entrepreneurial management:..........................................................................17
2.4 Theories of entrepreneurship: ............................................................................................19
2.4.1 All trade theory: ..............................................................................................................19
2.4.1.1 Advantages of Trade theories: .....................................................................................20
2.4.1.2 Challenges faced due to Trade theories: ......................................................................21
2.4.2 O-ring theory:..................................................................................................................21
2.4.2.1 Advantages of O-Ring theory:.....................................................................................22
2.4.2.2 Challenges faced due to O-ring theory: .......................................................................23
2.5 Concept of Family-Owned Business: ................................................................................24
2.6 Characteristics of Family Business:...................................................................................25
2.7 Influence of Entrepreneurial on family owned businesses: ...............................................26
2.8 Advantages of family owned business:..............................................................................27
2.9 Major challenges faced by family owned business: ..........................................................28
2.10 Comparison between the previous researches and the existing research:........................31

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2.11 Summary:.........................................................................................................................31
Chapter 3: Research Methodology...........................................................................................32
3.1 Introduction:.......................................................................................................................32
3.2 Method Outline:.................................................................................................................32
3.3 Research Onion:.................................................................................................................33
3.4 Research Philosophy:.........................................................................................................34
3.4.1 Justification for choosing Positivism research philosophy:............................................35
3.5 Research Approach:...........................................................................................................35
3.5.1 Justification for choosing Deductive research approach: ...............................................36
3.6 Research Design:................................................................................................................36
3.6.1 Justification for choosing Descriptive research design:..................................................37
3.7 Data collection Process:.....................................................................................................37
3.7.1 Data sources – Primary and secondary:..........................................................................37
3.7.2 Data analysis Techniques – Quantitative and Qualitative: .............................................38
3.8 Population of the research:.................................................................................................38
3.9 Sampling Technique: .........................................................................................................38
3.10 Sample Size:.....................................................................................................................38
3.11 Accessibility Issues:.........................................................................................................39
3.12 Ethical considerations:.....................................................................................................39
3.13 Research Limitation:........................................................................................................39
3.14 Time Table:......................................................................................................................39
3.15 Summary:.........................................................................................................................40
Chapter 4: Data analysis and discussion..................................................................................41
4.1 Introduction:.......................................................................................................................41
4.2 Qualitative analysis of the data collected from entrepreneurs of India and UK:...............41
4.3 Qualitative analysis of the data collected from management experts:...............................46
4.4 Summary:...........................................................................................................................50

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Chapter 5: Conclusion and Recommendation..........................................................................51
5.1 Conclusion .........................................................................................................................51
5.2 Objective Linking ..............................................................................................................51
5.3 Recommendations..............................................................................................................52
5.4 Future Scope of the Study..................................................................................................53
Reference List ..........................................................................................................................54
Appendices:..............................................................................................................................59

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List of Figures
Figure 1: Structure of the dissertation......................................................................................15
Figure 2: Conceptual Framework ............................................................................................17
Figure 3: Characteristics of Family Business ..........................................................................25
Figure 4: Advantages of Family Business ...............................................................................27
Figure 5: Some Challenges of Family-Owned Businesses ......................................................28
Figure 6: Research Onion ........................................................................................................33
Figure 7: Research Philosophy ................................................................................................34
Figure 8: Research Approach...................................................................................................36
Figure 9: Research Design.......................................................................................................36

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List of Tables
Table 1: Gantt chart..................................................................................................................40
Table 2: Entrepreneur management in a family business ........................................................42
Table 3: Advantages of being an entrepreneur of a family business .......................................43
Table 4: Challenges faced while working as an entrepreneur .................................................44
Table 5: Reasons behind the arrival of challenges while running a family business ..............45
Table 6: Future plans to improve the entrepreneurship management in the business .............46

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Chapter 1: Introduction
1.1 Introduction:
In this research, the researcher gives a comprehensive study regarding the challenges and
problems that arise in the entrepreneurial management in the family owned businesses.
Based on previous research works, the researcher presents an outline of the background of the
entrepreneurial management. Along with this, the researcher also studied the emergence and
prevalence of family owned businesses in the world. On the basis of the background studies,
the researcher established the rationale behind conducting this work. The rationale of the
study help the learners to gain an understanding regarding the importance of entrepreneurial
management the family owned businesses. The researcher is also able to identify the gaps in
the study. These gaps help the researcher to formulate problem statement, research aim,
objectives and questions appropriately. In order to make the study more realistic, the
researcher has taken the help of the family owned businesses in UK and India. At the end, the
researcher outlines a structure of the dissertation that will give an idea to conduct the
research.
1.2 Backgroundof the study:
In the recent years, entrepreneurship is increasingly becoming a global dream for a lot of
people in the world. Epstein (2013) commented that establishing a new enterprise requires
certain amount of passion, personal traits, dedication, self-motivation etc. Though, it takes
a lot of time, however, in the coming years, it provides significant benefits. One of the most
important advantages received from entrepreneurship is financial independence. However,
entrepreneurship also increase the risks associated with the company.
Murdoch (2011) stated that entrepreneurial businesses play a critical in the economic
development of the country of origin. It significantly adds to the GDP. The smaller
entrepreneurial businesses substantially stimulate local economies as well. One of the most
major roles of entrepreneurship is that it reduces the unemployment rates of the country.
Particularly, nowadays, when a large number of countries are facing unemployment crises,
entrepreneurial business is very important.
According to the Forbes statistics in 2013, the world witnessed around 28 million
entrepreneurial businesses. Among this, approximately 19.4 million business enterprises are

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sole proprietorship, 1.4 million are corporations and 1.6 million are partnership. The
businesses employed approximately 120 million individuals. In addition to this, they have
generated 65% of the new jobs dice 1995. Fast (2015) noted that each months, almost
543.000 businesses get started. It was also observed that 7 out of 10 new entrepreneurial
firms survive for at least 2 years. 5 out of 10 exist for at least 5 years. However, 3 out of 10
exist for 15 years or more. Along with this, the author stated that 52% of all the businesses
are family owned (Fmblinks.org, 2015).
In the present study, the researcher has primarily focuses on the family-owned businesses. It
constitutes a large number of businesses in all over the world. This is considered to be a
legacy that the founding member envisages will prevail for generations. However, the reality
is that approximately Tomasov (2010) opined that 20% of the family businesses are actually
passed to the second generation. The Entrepreneurial Family Business Centre has been
developed in UK to provide relevant research and insight to the challenges faced by these
family businesses.
The family owned businesses play a vital role in generating employment and GDP in the
countries. Allen (2013) contended that 75-95% of these business enterprises produce 65% of
the global GDP. According to the Fortune Magazine List 2013, 90% of the business
organisations in US are operated by families. These family owned businesses produced 50%
of the GDP in US. It also generated 80% of the employment.
In the European Union, Danes et al. (2014) the rate of family organisations is 70-80%. They
approximately share 20-70% of the GDP. Their participation in generating employment is
also high. In 2014, it generated 40-50% employment. As per the information from the
Entrepreneurial Family Business Centre, the large family businesses in the world are
basically dominated by small and middle sizes enterprises (Ifb.org.uk, 2015).
According to a survey by Chen and Li (2010), the main concern of family entrepreneurial
businesses is succession. It is assumed that 1/3rd of the worldwide enterprises face the
problems of succession. Many families establish enterprises just for a short period of time
after which they plan to sell it. Based on Central Statistical Office, 30% of the family
enterprises are actually passed to the second generation. While, only 13% of the enterprises
are passed on the third generations. 85% of the entrepreneurs fail to perform productively in
the first 5 years. Poza (2015) noted that in Asia, only 15% of the enterprises are passed to the
third generation and 8% to the fourth generation.

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According to Distelberg and Schwarz (2013), the highest number of second generation family
owned businesses are in Belgium with 55%, Italy with 48%, Asia 44% and US 40%. The
highest number of third generation family operated business is in Germany with 34%, UK
with 23% and US with 20%. In case of the present study, the researcher has taken into
consideration the family owned organisations of UK and Indian market.
Background of the markets:
UK market:
According to the Family Business Survey 2013, almost 75% of all the business enterprises
in the private sector of UK are family owned. It has employed around 9.2 million people. The
family owned businesses of UK is the fastest growing enterprises in the world. It contributes
more that £200 billion a year. There are more that 2 million family owned enterprises in the
UK with a growing sales rate of 22% per year (Fmblinks.org, 2015).
Gendreau (2010) opined that the end of recession has motivated dynamic families of UK to
establish and run their businesses. In the following part, the researcher discusses in detail the
contribution of largest family-owned businesses in UK.
Associated British Foods (ABF) in UK owns brands like Twinings, Pataks, Kigsmill and
Primark. The Weston family controls the ABF through the help of family holding company
name Wittington Investments. ABF is currently prevailing in the third generation. It has
employed 1,180,000 people and earned revenue of £12,943 billion in 2014. On the other
hand, Stemcor is the largest independent steel trader on the world. It has 80 offices and
employs 1,400,000 people. The Swire Group has operates in Hong Kong and Asia Pacific
apart from UK. It has employed around 1,250,000 people worldwide. Another family
business named Laing O’ Rourke is presently the largest privately-owned construction firm
in UK. It is the largest privately-owned IT group in UK and earned revenue of £3574.30
billion in 2014. The Bestway group is also a family owned business in UK. It is the second
biggest wholesale cash and carry operator and is currently in the second generation. It
employed 50,000 people and earned £2.2 billion revenue in 2014 (Ifb.org.uk, 2015).
These business operations of UK have significantly contributed in the economic development
of the country. Santiago (2014) contended that these businesses have generated total revenue
of £540 billion in 2013. The number is expected to rise to £661 billion by 2018.

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Indian market:
Like UK, the family owned businesses of India form the backbone of the economy as well.
As per the information of CII’s Family Business Network, the family operated businesses of
India account for 90% of the industrial output. It has also generated 79% of the employment
in the private sector and 27% of the overall employment. Here, the researcher gives a
detailed discussion on the large family operating businesses in India.
The Tata Group is one of the largest and oldest trading companies of India. It employees
around 455,947 people and has an annual revenue of $103.27 billion in 2014. On the other
hand, the Dabur Group is the largest manufacturer of ayurvedic and herbal medicines. In
2013, it has employed around 300,000 people. Apart from India, it also operates in UK and
Nepal and has revenue of $61.46 billion in 2012-13. Another family owned business named
the Birla Group has employed 136,000 people and has net revenue of $40 billion. It has
mainly established its business in various fields like mining, cement, telecommunications,
financial services etc. The Godrej Group is currently being operated by the 4th generation. It
has employed 260,000 people and earned revenue of $3.5 billion in 2012-13 (Fmblinks.org,
2015).
Wennberg et al. (2011) stated that the family owned business enterprises have been the most
flourishing in the UK and Indian markets. India, being a developing country, has been greatly
supported by the family organisations. It has not only increased their employment but also
generated employment. On the other hand a developed country like UK, the family
organisations has enhanced their private sector. Hence, the researcher has selected UK and
India as a case study,
1.3 Rationale of the study:
What is the issue: Vassiliadis et al. (2014) stated that the family owned businesses are
increasingly facing challenges and problems in the global market. These family organisations
are unable to implement proper strategies to overcome these problems. It reduces the
potentiality and capability of the organisations. Santiago (2014) commented that commitment
among the family members is very important. However, challenges faced in the enterprises
often hamper the relationships among the members. In such a situation, family members are
unwilling to contribute effectively to the businesses. Many times, the entrepreneurs are
unable to formulate alternative options that would reduce the risks faced in the organisations.

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Therefore, the family organisations must be concerned about these issues and try finding
appropriate measures to reduce them. Hence, the researcher believes that it is an important
issue that needs to be studied.
Why it is an issue: Huxham and Vangen (2010) opined that family owned businesses have to
face with a wide range of challenges. Family members across generations have different
personal and business values and goals. These goals might not be clearly understood or
expressed by everyone. Personality clashes, intergenerational rivalry, sibling conflict have
adversely affected the productivity and profitability of the family owned businesses. It has
also been observed that family members have different expectation regarding ownership,
compensation, employment etc.
However, Gendreau (2010) stated that in several situations, these expectations are not
fulfilled or managed efficiently. This has negatively impacted and challenged the survival of
the enterprise. The researcher has stated that organisations have increasingly faced problems
due to an inadequate planning of succession. Most of the family enterprises do not have
proper plans regarding transfer of powers to the next generation. Hence, the researcher
believes it is important to identify the challenges that the family organisations face. This will
help the firms to develop measures that will overcome these challenges.
Why is it an issue now: In this era of excessive globalisation and competition, family
organisations are continuously struggling to survive. Distelberg and Schwarz (2013) reflected
that family businesses are facing problems to manage time effectively and efficiently. In the
recent scenario, it has been observed that many new organisations do not have a particular
goal or vision. Moreover, the existing organisations have lost theirs in the course of time.
New generations have taken over the business who fails to comply with the goals that were
set by their ancestors.
It has also been noticed that members of family organisations try to push their successors in
the business without analysing their capability and wish. In such a situation, the productivity
and profitability of the organisation is inevitably affected. Hence, the researcher believes it is
an issue that the family owned businesses are facing in the recent world
What could the research shed light on: Every business enterprise has their own set of
unique problems and challenges. The family owned business organisations are no different.
Poza (2015) stated that family businesses go through an extensive process of growth and

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development. Many such businesses face various problems due to inadequate succession plan
and insufficient cash flow. It has also been noticed that problems increase once the second or
subsequent generations enter the organisation. The researcher has also noticed that these
challenges have adversely affected the personal relationships between the members of the
family. Fast (2015) opined that financial problems have created rift among the members that
have created political situations between the members.
This, in turn, has affected the smooth operations of the businesses. Thus, the present study
will help to shed light on the challenges that these family operated organisations face. The
researcher has taken the family owned business of UK and India as a case study in order to
make the study more realistic in the present scenario.
1.4 Problem Statement:
The problem statement of the present study is regarding the challenged and problems faced in
the entrepreneurial family owned business that affects the personal relationships. It has been
observed that previous research works have mostly emphasised on insufficient cash flow and
inadequate succession plan. In this research, the researcher tries to critically investigate all
the challenges that are normally faced by the businesses. Along with this, the researcher also
highlights the impact that the challenges have on the personal relationships between the
members of the family.
1.5 ResearchAim:
The main aim of the present research is to discover the challenges that arise in the family
owned businesses and its impact on the personal relationships of the family. This research has
been analysed in respect of family owned businesses in UK and India.
1.6 ResearchObjectives:
The objectives of the research are:
 To undertake a critical literature review on entrepreneurial management
 To analyse the challenges that are faced by the family owned businesses
 To evaluate the reasons behind the rising challenges

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 To provide suitable recommendations by analysing and evaluating the scenario in two
family-oriented businesses of UK and India
1.7 Researchquestions:
The questions of the research are:
 What is the existing literature on entrepreneurial management?
 What are the challenges that are faced by the family owned businesses?
 What are the reasons behind the rising challenges?
 What can be recommended by analysing and evaluating the scenario of two family
owned businesses in UK and India?
1.8 Structure of the dissertation:
Figure 1: Structure of the dissertation
(Source: As created by Author)
Introduction: In the first chapter, the researcher outlined that background of the study as
well as the market. Here, the researcher also mentioned the rationale behind conducting this
study. The rationale of the study helps the researcher to identify gaps. Through these gaps,

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the researcher is able to develop a problem statement and formulate the aim, objectives and
questions.
Literature review: In the second chapter, the researcher conducted a secondary analysis.
The secondary data help the researcher to draw a link between the current study and the
previous work. Through literature review, the researcher is able to identify the areas that have
not been focussed in the previous work. This also lays a basis for future study.
Research methodology: In the third chapter, the researcher gives a detailed understanding
regarding the way the research will be conducted. In this chapter, the researcher states the
philosophy, approach and design of the study. In addition to this, the ethics, limitation and
time horizon is also discussed.
Data analysis and Findings: In the fourth chapter, the researcher makes an analysis of the
collected data. For this purpose, the researcher uses graphs, tables and chart. This analysis
helps the researcher to deduce appropriate results.
Conclusion and recommendations: In the final chapter, the researcher gives a summation
of the research findings. Through this, the researcher is able to draw appropriate
recommendations that will help in the future studies.
1.9 Summary:
In this chapter, the researcher has taken the initiative of introducing the topic
‘Entrepreneurial management in family owned businesses’. Based on previous literature,
the researcher outlines a background of the study. Along with this, a background of family
owned enterprises in UK and India has also been mentioned. In this chapter, the researcher
developed a rationale that gives a precise understanding regarding the importance of the
work. It also helps to understand the relevance of the research in the present scenario.
Through this chapter, the researcher is able to understand the challenges and problems that
the family organizations face and its impact on the personal relationship.

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Chapter 2: Literature Review
2.1 Introduction:
Literature review refers to an evaluative study related to the topic of the research paper. The
researcher has discussed several theories and facts related to research topic. This study should
be summarized, described, clarified and evaluative review of the literature. Lorz (2011)
opined that it should provide a theoretical base to the researcher that may help the researcher
to determine the nature of the particular study.
2.2 ConceptualFramework:
Figure 2: Conceptual Framework
(Source: Created by author)
2.3 Conceptof Entrepreneurial management:
According to Rautiaine (2012), entrepreneurial management refers to a more proven and
influential strategy that is needed to get more benefit in business. The term ‘entrepreneurship’
indicates a start-up business. Most of the business firms are facing operational and strategic
challenges. Using the corporate entrepreneurship helps the firms. Firms can handle those
Concept and Theories of
Entrepreneurial
Management
Challenges of Family
Business
Overview of Family
Business
Advantages of Family
Business

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challenges successfully. Adams et al. (2014) added that corporate entrepreneurship is
important for all the organizations to maintain its flexibility and vitality. In addition,
corporate entrepreneurship helps the business organizations to achieve their competitive
positions in both international and domestic businesses. It inspires to renew capabilities to
acquire and use more new competence.
Aronoff (2011) suggested that a successful corporate entrepreneurship can be linked up with
the improvement of firm’s performance. Most recent studies based on corporate
entrepreneurship include three dimensions, such as innovativeness, risk taking and pro-
activeness. These dimensions are specially used in discriminating the less-entrepreneurial
and entrepreneurial firm behavior. Astrachan and Kolenko (2014) discussed that however, the
behavioral approach of entrepreneurship is comparatively new. Entrepreneurial management
contributes extra values to increase the social level of a firm. Some of the scholars mentioned
entrepreneurship as a management approach and it is featured by using the currently
controlled resources. The process of creating the entrepreneurial value can be occurred in any
kind of business firm (IMD.org, 2015).
A proper measuring instrument is needed because it helps an organization in assessing the
degree of entrepreneurial management. Barnes and Hershon (2012) opined that other than
that it may help the firms to design more useful strategies. These strategies will improve the
entrepreneurial behavior of the firm. Entrepreneurship is not about to start a new business.
Entrepreneurial management should be considered as a management mode that is different
from the traditional management. Astrachan and Shanker (2013) stated that entrepreneurship
management is generally created based on several foundations. The traditional service
reforms and designs throughout the years have spread between the decentralized approaches
and centralized approaches. While Beckhard and Dyer (2013) argued that it indicates the
centralized approaches, the users intend to concentrate on the flaws on the mode.
Lack of consumer responsiveness, one-size-fits-all, hierarchy and rigidity advocate more
decentralization. Beehr et al. (2010) discussed that observers may criticize the
decentralization flaws as well. These flaws include fragmentation, waste opportunities, have-
and-have-not agencies; inconsistency as well as the demand re-centralization (Refer to
appendix 1).

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2.4 Theories ofentrepreneurship:
2.4.1 All trade theory:
According to Bird and Sapp (2014), all trades theory of entrepreneurship focuses on the skills
developed in the entrepreneurs to progress a family business. It implies that an entrepreneur
must have knowledge about all the fields of expertise that speeds up the process of
entrepreneurship. Chibucos and Leite (2015) opined that the entrepreneur with considerable
knowledge about all the subjects can be called as Jack-of-all-trades. The idea is about
managing different people and different tasks at different point of time in a family business.
On the other hand, the theory states that the new aspirants of entrepreneurship must have a
sound mind to formulate strategies. It may help in managing human resource, financial
resources and the other competencies in a family business. Chrisman et al. (2013) argued
that the strategies formulated by the entrepreneurs must be aligned to the objectives of the
new business. Human capital investment strategy is one of the vital strategies that profess in
stratifying balance between different competencies.
Filbeck and Lee (2010) stated that a family business needs a person who is Jack-of-all-
trades-Theory. It is beneficial in handling different aspects of the busyness single handedly.
It is believed that if any of the members of the family business is cheating in the business
then the leader who is Jack-of-all-trades would be able to check on the cheating. The
different departments at the workplace of the family business can be handled by the single
member. From this analysis, it can be sated that this All Trade theory can be helpful to
develop the entrepreneurial management in family owned business. However, Westhead and
Howorth (2011) opined that there are some disadvantages for the person who is Jack-of-all-
trades in a family business. Firstly, the person may be overburdened with work load.
Confusion in the work can cause financial loss to the family business. Aronoff (2011) added
that weak project management can be another disadvantage as the person does not possess
expertise in a particular subject rather applies a similar method to all sorts of jobs. Therefore,
it can be said that all trade theory comprises of advantages as well as disadvantages in case of
a family business.
On the other hand, Coleman and Carsky (2011) opined that Jack-of-all-trades-Theory
cannot control the changing attitudes of the human resource working in the family business.
The changing characteristics of the employees are seen to be unpredictable and vigorously

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changeable. It has a heavy impact on the process of skill accumulation. Chua et al. (2012)
added that a person with qualification in more than one field might be able to handle different
situations at different point of time with ease. Danes and Lee (2014) explained that a skilled
person is more able to manage the human resources of the family business for its success.
The main task of an entrepreneur is to manage the available resources. In this way, the
entrepreneur encourages the human resources to produce innovative products and satisfy the
respective customers.
Filbeck and Lee (2010) stressed on the talent of merging human resource and the financial
resources to work towards the accomplishment of the company’s mission. Getz and Petersen
(2014) opined that skills of an entrepreneur can be divided on the basis of ‘generalists’ and
‘specialists’. For instance, an entrepreneur of a family business having a degree in creative art
might have the ability to design the promotional websites. Similarly, an entrepreneur with a
business background might have interest towards web designing. In such cases, the
entrepreneur would not need the support of fellow web designers and would be able to
structure the promotional activities for the business. Thus, Chua et al. (2013) criticized the
theory to be focusing on the responsibilities for a single person rather than dividing it among
a group.
2.4.1.1Advantages of All Trade theory:
It has figured out that managing human, financial and physical recourses is supposed to be
the major challenges and issues for the majority of the business organizations. All Trade
theories help in unitizing the available resources of the family business in very proper and
gaining more and more competitive advantage in unique target market. Apart from that, the
theory also helps in taking actions against the issues and challenges faced by the family
businesses. It has also noticed that most of the family business in market faced such type of
problems and issues and this theory helps business firms to continue its business in very
effective way.
For example, Tata group and Birla Group being two Indian companies had some of the
advantages for following the trade theory. It had been found that the two groups could not
solely follow the All trade theory. Jamshetji Tata having the immense idea about the
communication system in India developed the Tata communications. On the other hand, the
business of metals and cements has been made popular by the Birla group by using this

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theory. Barnes and Hershon (2012) stated that by using its idea about managing human
resource and financial resource, this group is able to extend its business in market. According
to Aronoff (2011), ABF group has a single product of foods and ingredients that followed
the all trade theory by its managers. George Western having a huge knowledge on the
demand of fast food in UK utterly followed the all trade theory. The theory could not be
followed by Bestway group as the group handled three sectors of wholesale, banking and
cement.
2.4.1.2ChallengesofAll Trade theory:
It has been noticed most of the family business fail to implement trade theories in its business
firms effectively. Family business face different types of issues and challenges while
implementing trade theory into the business firms. Proper management of employees,
financial management and understanding the market situation are also supposed be the major
challenges faced by the family business in market.
For example, ABF group had to face challenges on following the trade theories. Chua et al.
(2014) stated that since, the owner only had idea about the domestic changes coming in UK,
it could not expand its business in the international market. The owner on following a single
pattern went out of innovative ideas to be used for the improvisation of the company. At such
situation, the owner engaged few extra employees to improve its operations and for the cause
of business expansion.
Therefore, it is recommended that small group could be created comprising of food experts
from different parts of the world. It will give a brief about the tastes of people residing in
International market. The company would be able to produce food materials in accordance to
their choices.
2.4.2 O-ring theory:
According to Gomez-Mejia et al. (2013), O-Ring theory refers to the different abilities of the
individuals with possession of different talents and abilities to perform jobs. The
entrepreneurs must have an aim to fulfill a specific task in least time period even in case of a
family business. Hall and Nordqvist (2009) opined that the theory focused on the
performance of a group towards the family business rather than concentrating on the talent
management of a single person. The emphasis on the team performance creates certain

22
implications. Firstly, huge recruitments are processed that leads to a larger number of
business groups. Hienerth and Kessler (2010) opined that it is a tough task for the
entrepreneur in a family business to handle the large groups as the dimensions of their talent
are different. In such cases, conflicts can also arise between the team members. In this case, it
is the duty of the entrepreneur to minimize the conflicts arising among the team members.
Lee et al. (2010) explained that more diversity in the talent distribution within a group
enhances the chances of increasing the per capita capital. It is believed that the persons
present in a working team consist of different people having complete knowledge on a
specific subject. It refers to the presence of specialists in a family business group. Ward
(2011) argued that if a single person in a family business group stops performing then the
mission and vision of the company might get blurred. It means that a single underperforming
member of a business group can harm the entire business structure. The risk lies with the fact
that the possibilities of quick replacements are also prone under this theory. Westhead and
Howorth (2011) stated that if the entrepreneur finds a more capable person then the
permanent member can be replaced by a part time employee. This situation gives rise to the
situation of frictional employment.
From this analysis, it can state that O-ring theory has few advantages in a family business in
entrepreneurial management. Chibucos and Leite (2015) stated that the output of the project
handled under O-ring theory in a family business always provides expertise results. Since, a
single person is handling the project within the genre the possibilities of mistakes are quite
less. It can be said that the project management is of high level that drives the family business
towards financial success. The disadvantage of O-ring theory too affects the family business
to a high extent. The entrepreneur would not be able to solve the problem occurring in other
departments of the family business in the absence of the respective leader. It might result in
economic loss and conflict among the non family members. The lack of innovation and
productivity could be another disadvantage of the O-ring theory in the family business
(Rautiaine, 2012).
2.4.2.1Advantages ofO-Ring theory:
The major advantage of O-Ring theory helps in getting an ideas and perception of the
different operations of the family business. The theory also helps in formulating the

23
operational and marketing planning of the family business. One of the major advantages of
this theory is to increase the competitiveness in the current market.
For example, Tata group and Birla Group generally follow the O-ring theory as it has
different departments of operations. The different groups of Tata group have human
resources having expertise in airlines, automobile, finance, construction, hospitality, retailing,
IT etc. Chibucos and Leite (2015) said that the owner of Tata group does not intend to
interfere in the jobs undergone by these above mentioned departments. The similar situation
exists in case of the Birla group.
However, in case of ABF group O-ring theory could not be much beneficial for the group as
the owner preferred to follow a personalized approach for the business whereas, Bestway
group followed the O-ring theory that helped it in creating brand image for its three different
sectors (Rautiaine, 2012).
2.4.2.2Challengesfaceddue to O-ring theory:
There are so many challenges and issues associated with this theory. It has been observed that
most of the family business firm fails to apply this type of theory due to lack of
personalization within the firms and improper people management. Apart from that, family
business also fails to implement O-Ring theory due to lack of effective communication with
the external and internal market.
For example, due to engagement of a huge number of employees in the family business, Tata
group and Birla group had to face a conflict of ideas between the employees. The
bifurcation of different departments specialized in IT, construction, telecom and others
deployed the organizational culture created at its initial days.
On the other hand, Bestway group had to face the challenge of perplexed brand image
created in the minds of the customers. Astrachan and Shanker (2013) commented that the
innovative ideas offered by different members of the group had been implemented after few
intervals that developed a confused brand image in the consumer’s perspectives.
Therefore, it is recommended that Laissez Faire style can be followed by the managers. It
will on one hand accept the innovative ideas of the employees and on the other hand final
decision making phase will be attended by the managers. It will help the companies in
coming down to a collaborative decision.

24
2.5 Conceptof Family-Owned Business:
Winter et al. (2009) discussed that the family business may appear in different forms. They
are the sole proprietorship, holding companies, limited companies, publicly traded and so on.
This type of businesses can have any size like big multinational corporations or small store.
The most important feature of such business is the future generation of the owner may get a
valuable post in the company. For example, the son or daughter of the owner may become the
CEO of the company. Chua et al. (2014) stated that this personal influence may consider as a
form of ownership, participation, strategic preferences, control, etc. family members usually
get involved in this type of businesses as a member of management team, shareholder, board
members, etc.
However, Akdogan (2010) argued that defining the family business is quite difficult and
controversial. In short, it can be narrated as the family business includes three combinations
of management and ownership. Family managed and family owned is considered as a
combination of this type of business. However, the owners of the family businesses
sometimes fail to gain profits in their businesses as most of them are unskilled and out of
proper knowledge. Alcaraz (2014) contributed that family businesses need to face several
challenges due to some unprofessional behavior. On the other hand, these business owners
always get support from the family members and sometimes they try their level best to
achieve the goal. Actually, an emotion always works there that has both the positive and
negative sides.

25
2.6 CharacteristicsofFamily Business:
Figure 3: Characteristics of Family Business
(Source: Chibucos and Leite, 2015, pp.455)
According to Ward (2011), the characteristics of family business refers to the business size,
home-based business, business age, problems of the business, business finances and many
more. Business size is all about the study for determining the proper employee size of the
business. It has already been mentioned that the size of a family business can be small or
large as well. It is definite that the numbers of involved employees may depend on its size.
Alcaraz (2014) mentioned that the owners of home-based businesses usually get supports and
help from their family members as they mainly conduct their business from their homes.
Lorz (2011) opined that the owners of home-based businesses can enjoy their businesses as
they usually start the businesses from their passions. For example, a lady who loves cooking
may decide to start a home delivery business from her own house. Other family members
may help her at the beginning as she may not have much human resources with her.
Gradually she will start earning profit in her business. Business age indicates from its starting
date to till the date on which the business is running. Rautiaine (2012) discussed that in a
business, the entrepreneur may face several problems. Therefore, the entrepreneur needs to
overcome the business problems and lead it to the success. Business finance refers to the
Family Business
Characteristics
Business
Size
Home-
based
Business
Business
Age
Business
Problems
Business
Finance

26
monetary investment of the business. The entrepreneur can arrange the amount by availing
several loans too.
2.7 Influence of Entrepreneurial on family ownedbusinesses:
Adams et al. (2014) mentioned that reliability and sustainability are the main keys to achieve
success in family business. Some specific characteristics are there that influence the family
businesses. These features are durability, decency, honesty and reliability. These
characteristics can be observed into their private matter as well as in their entrepreneurial
actions too. Aronoff (2011) opined that family businessmen are more distinct that they are
more regard to the business as it is their own company and the source of their incomes.
Family business may have the chance to lose its profit. Other than that, it may be tempered
own selfishness it should be remember that these are the human nature
(Digitalcommons.usu.edu, 2015).
However, the successful family business men are the role models to the entrepreneurs. These
people have already faced numerous risks, they have trust on their own capacities and
creativities. Besides that, Astrachan and Kolenko (2014) stated that the entrepreneur should
remember that the employees of those successful business owners are quite innovative and
keen to perform. However, to take the responsibility of a business from parents or any other
relative is not just an emotional challenge, it is further a standard to assess the economic
performance. Astrachan and Shanker (2013) discussed that it is expected that the family
businessmen are better entrepreneurs. It is because they have their upbringing through the
business environments.
Barnes and Hershon (2012) commented that some of the entrepreneurs face poverty,
negligence and insecurity in their childhood as they did not get proper guidance from their
parents. After becoming an adult, they want to do something to forget their miserable
childhood. However, this is not the ultimate reason to become an entrepreneur. However, this
psychodynamic fact often creates problems in the next life of these entrepreneurs. These
entrepreneurs generally become confused and inconsistent about their motives wishes and
desires. These people generally react irrationally and impulsively. Beckhard and Dyer (2013)
added that some people like to start their own businesses rather than to work in others’
companies. Thus, they start their carrier as an entrepreneur.

27
2.8 Advantages of family ownedbusiness:
Figure 4: Advantages of Family Business
(Source: Lorz, 2011, pp.150)
According to Beehr et al. (2010), there are certain advantages in running a family owned
business. The interference from the outward sources is avoided in such cases. Firstly, the
speed of completion of the job in a family run business is quite high as compared to the
other forms of businesses. Secondly, the harsh office politics are not seen as a part of the
family business. Bird and Sapp (2014) opined that most of the businesses face a tough time
with the trade unions demanding the convenient operations of the employees. In such cases,
the smooth operations of the business get disrupted. In family run business, all the employees
work collaboratively towards one goal.
Thirdly, the top management does not need to be fed with the values and ethics of the
company. The employees belong to the same background. The authenticity of the tasks done
can be relied upon. Fourthly, the trust is another advantage of running a family run business.
Fifthly, a set of equilibrium is set between all the employees. The family members are
working collaboratively in the business. Even, they can share the pressure of profit and losses
at the same time. The sixth advantage stands to be a sense of ingenuity between two
generations. It implied that a private company working in alliance can lose its competitive
advantage when the technologically advanced new companies arise in the market. In case of
Advatages
of Family
Business
Quick Job
Completeion
No Office
Politics
No Pressure of
Obeying the
Company
Ethics
Trust
Balance
between the
Employees
Sense of
Ingenuity

28
the family run business, when the next generation of the family takes the charge of running
the business the business automatically gets upgraded with the latest trend in the market
(Digitalcommons.usu.edu, 2015).
2.9 Majorchallenges facedby family owned business:
Figure 5: Some Challenges of Family-Owned Businesses
(Source: Chrisman et al. 2014, pp.467)
Chua et al. (2014) stated that while the family members work united, the emotion may occur
there in the business. Other than that, some conflicts may also arise there because the
involved relatives may observe the business from various perspectives. These perspectives
are completely different from each others. However, the entrepreneurs should appreciate their
own efforts as they have established their own businesses.
Emotional: Coleman and Carsky (2011) commented that the main challenge of this business
is emotion. There is a chance to get affected by the family problems. For example, divorce,
financial or health problem, separation, etc create some difficult political atmosphere for the
members of a family.
Informality: However, Danes and Lee (2014) stated that informality can be considered as
another problem that affects the family business. It indicates the deficiency of proper policies,
business rules and professional attitudes among the family members.
Emotion
Informality
Tunnel VisionCompensation
Role
Confusion

29
Tunnel Vision: Another problem has been identified there and it is known as tunnel vision.
It signifies that lacking of important opinions from the outsiders may affect the business. It
means the family business owners should talk to outside experienced people to gather idea
about their businesses. Even, they should generate diversity in their business techniques.
Chua et al. (2012) suggested that absence of written document creates another complicacy in
family businesses. Actually, as it is a professional field, the participants should behave
professionally, in spite of being the members of a family. In most cases, no written strategies
have been found. Yet, it is one of the primary duties for the business owners to maintain the
written documents of everything (IMD, 2015).
Compensation: Filbeck and Lee (2010) found out that compensation problem sometimes
affect the family business from a huge aspect. Family members have not usually properly
mentioned about salary, dividends, compensation and benefits for other non-participating
members belong to the same family. Even, sometimes some of the business owners have set
such compensation packages those are not justified.
Role Confusion: Getz and Petersen (2014) mentioned that role confusion can be considered
as another challenge in family businesses. The business owners must clear the particular roles
and responsibilities of every participant. No ego clash or emotion should be considered there.
The roles should be allocated on the basis of their capabilities and experiences.
Other Challenges: Gomez-Mejia et al. (2013) identified the missing of proper talent as one
of the major problems in family businesses. In most cases, the business owners include such
family members those are not so much skilled and talented. However, later on when their
inabilities create real problems, the owners cannot dismiss them as they belong to a same
family. Hua et al. (2013) argued that the major problem in this field is related to the huge
turnover of those members who are out of the family. The management should always
remember that the remuneration should be divided in accordance to their capacities and
talents. Even, the outside employees should be judged properly by their skills.
On the other hand, a successful family business may get hampered due to unplanned
succession. Hall and Nordqvist (2009) noticed that most of the family business organizations
do not plan properly about the next generation to handle the business in future. It definitely
creates great confusion. Even, sometimes it leads the business to its end. Hienerth and
Kessler (2010) discussed that the family business owners should make a good plan for the
retirement. It indicates that the business owners should design the long-term planning for

30
meeting their requirements for future perspective. Another most important point is training.
This is obviously the basic problem that most of the family-owned businesses usually face.
Lee et al. (2010) opined that proper training is needed while involving the family members in
the business. It may help the participants to get proper information about the businesses and
their goals. Paternalistic is considered as another vital challenge of family businesses.
Control is influenced and centralized by the traditional businesses. Yet, it should be based on
the proper management practices. Westhead and Howorth (2011) contributed that
conservativeness is another challenge that the family businesses usually face. For example,
the older members of the family generally try to preserve the old status whereas the new
generation tries to bring some changes. Conflict occurs then when the older people resist
changes.
Winter et al. (2009) recognized that communication problems create several problems in
family businesses. These include role confusion, political division, emotion or other
relationship conflicts. Systematic thinking can be considered as another challenge faced by
the family-owned business people. Actually, these businesses design their decisions on day-
to-day basis. However, for getting better achievement strategic planning or long-term
planning is needed. Akdogan (2010) discussed that exit strategy is another challenge of this
type of business. They do not have any clear plan about their selling strategy of the product.
This may influence walk away of the business. Business valuation is a challenge that
indicates no knowledge about the business value. Thus, they cannot even identify those
factors that make the business more valuable.
Sometimes the family businesses face problems in their growths. Chibucos and Leite (2015)
suggested that lacking of required capital create a problem and becomes the barrier in the
growth of the business. The business owners should always try to reinvest in the businesses.
Every family member has their own vision. Therefore, diversity in vision creates another
problem for the family-owned businesses. According to Alcaraz (2014), control in
operations is such a problem that should be overcome immediately to gain profit in family
businesses. Actually, it sometimes becomes difficult to manage or control other family
members. Some members do not provide proper efforts in the business. Therefore, the
family-owned business owners should be careful and strict to handle the challenges.

31
2.10 Comparison between the previous researches and the existing
research:
In the previous research, the researcher has found out the discussion on the concept of
entrepreneurship and family business. Therefore, the researcher has decided to conduct this
present research on the impact of entrepreneurial management on the family based business.
The researcher has gone through some journals like ‘the Impact of Entrepreneurship
Education on Entrepreneurial Intention’, ‘Dynamic Ownership in Family Business
Systems- a Portfolio Business Approach’ and so on. Thus, the researcher has tried to fill up
the gap such as the effectiveness of entrepreneurial management on the family-owned
businesses (Digitalcommons.usu.edu, 2015).
2.11 Summary:
In this chapter, the researcher has discussed about the basic concept of family business and
entrepreneurial management. The researcher has depicted the influence of entrepreneurship
on the family businesses also indirectly by the concise discussion. A conceptual framework
has been depicted in this chapter as it may help the readers to get a proper idea about the
overall chapter at a glance. Most importantly, the researcher has mentioned about the
comparison between earlier researches and the existing study. It may help to understand the
gap on which the present research has been conducted. In overall aspect, the literature review
part is providing a theoretical base of the topic with references of several scholars.

32
Chapter 3: Research Methodology
3.1 Introduction:
In this chapter, the researcher has used different research methods in order to conduct the
research work in a scientific manner. Research methodology helps the researcher to conduct
the research work in a scientific manner. The researcher has selected four family owned
business entrepreneurs from UK market and Indian market. From UK market two family
owned business entrepreneurs have been selected they are Associated British Food (ABF)
and Bestway Group. From Indian market Tata Group and Birla Group are the two chosen
family owned business entrepreneurs. Therefore, the researcher has further applied research
philosophy, research design and research approach in the research work in order to
understand the challenges faced by theses family own business entrepreneurs. For this
particular research, the researcher has used research onion as it gives the outline to conduct
the research work in a systematic manner.
In the words of Brannen (2009), research methodology plays an important role in terms of
collecting data. The researcher in this chapter has described about sampling methods,
sampling techniques and sample size. Addition to it, the researcher has also mentioned about
the ethics, limitations and accessibility issues of the research. The researcher has provided a
method outline to give the basic idea of conducting the research in a systematic may.
3.2 Method Outline:
For this particular research work, the researcher has applied different research methods to
conduct the research work in a proper ways. The researcher has successfully followed the
research onion for conducting this research work. The researcher has used positivism
philosophy to conduct the research work. Further, the researcher has applied deductive
research approach for effective research work. Descriptive research design helps the
researcher to conduct the research work in a descriptive manner. The data are collected from
primary sources and secondary sources. It also helped the researcher to collect enough
information. For this research, the researcher has applied primary qualitative analysis to
analyze information.

33
3.3 ResearchOnion:
According to Saunders et al. (2009), different layers of conducting the research has been
mentioned in the research onion. Research onion is layer of onion. This layer unfolds the
important elements of the research onion in order to conduct the research work in systematic
way. Research onion immensely helps the researcher to conduct the research work layer by
layer.
Figure 6: Research Onion
(Source: Saunders et al. 2009, pp. 52)
Ellis and Levy (2009) stated that in the first layer, which is also known as the outer most
layer in the research onion has different research philosophies. In the second layer of the
research onion, research approaches have been depicted. The research approaches are of two
types namely deductive and inductive. The third layer of the research onion comprises of
research strategies. The strategies in the research onion help the researcher to choose
alternatives from the case study in order to conduct the research work in an effective manner.
Truscott et al. (2010) commented that strategic choices are the fourth layer of the research
onion. Under the fourth layer there are mono method, mixed method and multi-method
through which the research. The time horizons are drawn in the fifth layer. In this layer, the
researcher is able to conduct the research work in longitudinal format or in cross-sectional
manner. The innermost layer describes the data collection and data analysis methods. The

34
researcher further presents the collected data in excel sheets or in order to get the correct
numerical figure.
3.4 ResearchPhilosophy:
Bernard (2011) stated that research philosophy helps the researcher to compare the present
data with the previously collected data. Through the research philosophy, the researcher is
able to conduct the research work in a scientific manner. The three research paradigms have
given rise to the different research philosophies. The three research paradigms are
epistemology, axiology and phenomenology.
Figure 7: Research Philosophy
(Source: Burns et al. 2008, pp.67)
In the words of Morgan (2007), epistemology is the nature of knowledge. It mainly deals
with the nature, sources and limits of knowledge. Axiology deals with the study of
philosophical value. On the other hand, phenomenology is base on the consciousness on the
experienced on the viewpoint of the person. Further, there are three research paradigms
under epistemology positivism, realism and interpretivism.
Positivism
Post positivism
Interpretivism Realism
Research Philosophy

35
According to Cameron (2009), positivism deals with the philosophical aspects of the
research work and observable phenomenon that is used in order to conduct the research work.
In this research philosophy, the researcher tries to narrow down towards simplest elements. It
is through the facts, figures and data. Realism deals with the facts and evidences in the
research work. Onwuegbuzie and Leech (2009) commented that dealing with the subjective
or social phenomenon is the interpretivism. It is the understandings of the human as social
actors. Post-positivism is the derivation of positivism.
3.4.1 Justificationfor choosing Positivismresearchphilosophy:
For this particular research, the researcher has chosen positivism philosophy in order to
perform the research work in a scientific manner. Positivism deals with the reality and
therefore it helps the researcher to uncover the truth. It is a structured method of conducting
the research work. The aim of positivism is also to predict and control it. Therefore, the
researcher has chosen positivism to conduct the research work in an effective manner. It is so
because positivism helps the researcher to understand the real facts. Those are based on the
perception and emotions on the human.
3.5 ResearchApproach:
Theory
Hypothesis
Pattern
Tentative Hypothesis
Theory
Observation
Observation
Confirmation
ResearchApproach
Inductive ApproachDeductive Approach

36
Figure 8: Research Approach
(Source: Riege, 2008, pp.75)
Research approaches are of two types named deductive research approach and inductive
research approach. Onwuegbuzie, A. J. and Leech, N. J. (2009) explained that the focus of
the deductive research approach varies from theories to confirmation. On the other hand,
inductive research approach starts from objectives and ends towards the theories. In
deductive approach, the research approach emphasis is given towards the hypothesis.
Addition to it, in deductive approach only qualitative data is collected. In inductive research
approach, the journey of the research is based on observable phenomenon. Bryman (2006)
commented that it takes longer time to conduct the research work. In inductive research
approach, the data that is collected is qualitative. Under inductive approach, the research is
more flexible and the findings are not generalized.
3.5.1 Justificationfor choosing Deductive researchapproach:
For this particular research, the research has applied deductive research approach.
Deductive research approach is theoretical based and therefore, it helps the researcher to
conduct the research work through the theories. Conducting the research work through
deductive approach helps the researcher to complete the research work with very short period
of time. Further, the hypothesis on the other hand helps the researcher to gather specific data.
Therefore, this hypothesis leads the researcher towards the confirmation of the theories.
3.6 ResearchDesign:
Figure 9: Research Design
(Source: Freshwater, 2007, pp.134)
Explanatory
Design
Descriptive
Design
ResearchDesign
Exploratory
Design

37
There are three types of research design named explanatory, exploratory and descriptive
design. These research designs are a way to conduct the research work in wider manner. In
the opinion of Bryman and Bell (2011), in explanatory research design, the researcher is
able to explain the research topic. This way the researcher is able to gain knowledge about
the research topic. The aim of the explanatory research design is to make a cause-effective
relationship and connect between the different ideas and the research topic. In exploratory
research design, the research work is explored. The role of the researcher in the exploratory
research design is like a wanderer. Knox (2008) explained that the journey during the
research work starts from a theoretical idea on the research topic. It can be further divided
into two sections new topic and new angles. Descriptive research design describes the topic
in broader manner. The understanding under this research design is through explorations and
explanations. Descriptive research design expands the research understanding.
3.6.1 Justificationfor choosing Descriptive researchdesign:
The researcher has chosen descriptive research design in order to conduct the research work
in a broader manner. Descriptive design describes helps the researcher to collect descriptive
forms of data and evidences related to the research topic. The researcher in the descriptive
research design is able to complete the research work in a philosophical manner. The
descriptive design is also supposed to be an ideal one for conducting cross-sectional research
work.
3.7 Data collectionProcess:
3.7.1 Data sources – Primary and secondary:
The data can be collected from both the sources primary and secondary sources. Primary
sources are collected from survey and questionnaires those are directly and indirectly
connected with the research work. On the other hand, secondary sources are collected from
websites, journals, books, magazines, articles, blogs and forums. For this research work, the
researcher has used primary sources to collect appropriate data.

38
3.7.2 Data analysis Techniques – Quantitative and Qualitative:
There are two types of data analysis techniques namely quantitative and qualitative data
analysis techniques. Bergh and Ketchen (2009) commented that through quantitative analysis
technique, the collect data is quantified to get the accurate numerical data. On the other hand,
qualitative data analysis technique is qualified, to get descriptive data. Therefore, the
researcher has applied qualitative analysis technique to understand the problems faced in
family owned business entrepreneurs. The primary data are collected from the management
experts of the family owned business. The interviews are taken from the family
entrepreneurs.
3.8 Population of the research:
The population of this particular research eight family owned business entrepreneurs are
taken. They are Associated British Foods (ABF), Stemcor, Swire Group and Bestway Group
from UK market and from Indian market Tata Group, Birla Group, Godrej Group and Dabur
Group. The management experts of each company are interviewed.
3.9 Sampling Technique:
There are two types of sampling techniques probability sampling and non-probability
sampling. Riege (2008) stated that in probability sampling, the individual respondents get
equal opportunity to respond on the particular topic. The questionnaires are open-end
structured. In non-probability sampling, the particular respondents are selected from the
population in order to give their point of view. The researcher has used non-probability
sampling for this particular research. Since it is based on the interview, the researcher is
direct contact with the family business and management experts.
3.10 Sample Size:
The sample sizes for this particular research are four family owned business entrepreneurs.
For this research, the researcher has selected two family owned business entrepreneurs from
UK market and two from the Indian market. They are Associated British Foods (ABF) and
Bestway Group from UK market and Tata Group and Birla Group from Indian market.
Further, 6 management experts from the four family owned business entrepreneurs were

39
interviewed in order to collect the correct information on the challenges faced in the family
owned business.
3.11 Accessibility Issues:
While conducting the research, not all the managers were available and so the researcher was
not accurate. The busy schedule of the management experts was unable to give the correct
and appropriate information. This was the major accessibility issue faced by the researcher in
collecting correct information.
3.12 Ethicalconsiderations:
According to the Data Protection Act 1998 of UK, the researcher protects the collected data.
The questionnaires are set according to the mindsets of the family owned business
entrepreneurs and management experts. The researcher further promised that the collected
data will not be misused and kept protected. The data are to be used only for research
purpose. The researcher also promised that the data would be destroyed after the research
work is completed.
3.13 ResearchLimitation:
The authentication of the collected data is the first limitation faced by the researcher. It is so
because some of the respondents did not give all the response because they are bound not to
answer all the questions. Further, time is also a main factor. Since all the management experts
had busy schedule that limited the research work.
3.14 Time Table:

40
Main activities/ stages Week
1
Week
2
Week
3
Week
4
Week
5
Week
6
Week
7
Select the topic  
Data Collection (Secondary Sources)
Layout Creation
Literature Review
Form the Research Plan
Select the Appropriate Research
Technique

Data Collection (Primary)
Analyse and Interpret the data
Data Findings
Conclusion of the Research
Forming Rough Draft
Final Work Submission
Table 1: Gantt chart
(Source: As created by author)
3.15 Summary:
In this chapter, the researcher has used different research methods in order to conduct the
research work in an effective way. The researcher has applied research philosophy, research
approach and research design. The researcher also justifies on the chosen research methods.
Addition to it the researcher has also mentioned about the different data sources, techniques,
sampling techniques. Finally, the researcher mentions about the research limitation,
accessibility issue and provides Gantt Chart.

41
Chapter 4: Data analysis and discussion
4.1 Introduction:
In this chapter, the researcher has analyzed the primary data collected from the entrepreneurs
of family owned businesses and the management experts from India and UK. The primary
data has been collected with the help of interviews. The data has been analyzed in qualitative
form. Entrepreneurs of Tata group, Birla Group, ABF group and Bestway group has been
chosen by the researcher. The Qualitative analysis has been presented in the Microsoft word
sheet in a descriptive format. 4 entrepreneurs from India and UK have been chosen by the
researcher. Along with that, 6 management experts have been chosen by the researcher for
conducting the Qualitative data analysis.
4.2 Qualitative analysis of the data collected from entrepreneurs of India
and UK:
Q.1 What is entrepreneur management in a family business?
UK market
ABF group Bestway group
Indian market
Tata group Birla Group
The present manager
said that
entrepreneurship
business is all about
running a business in
the host country with
a single owner.
The present manager
said that
entrepreneurship deals
with the management
of the entities by a
small group of people.
The CEO commented
that the
entrepreneurship
management needs to
divide the profits and
loss incurred by the
company to all its
relevant public. It
implied that the credit
and responsibility of a
work must be sub
divided among the
The manager said that
entrepreneurship
management confers
the entire
responsibility of the
business on the sole
trader.

42
management and the
employees.
Table 2: Entrepreneur management in a family business
The researcher understood the fact that entrepreneurship management raises the level of
responsibility in the manager. The complex concept of entrepreneurship has been found to be
having some of the implications. From the discussion of Concept of Entrepreneurial
management in literature review section, it can be said that the identification of the skilled
employees and the accumulating the funds from the funders are the biggest responsibility of
the entrepreneurs.
Q1.1 What are the approaches of the managers towards entrepreneurship management?
The consequences can be achieved smooth or hurdles can arrive in the process but it can be
said that the collaborative approach of the managers and the employees can lead the company
towards success. The profits or loses should be shared among the employees and the
managers. It creates a supportive environment in the organization. The researcher analyzed
that the managers try to create a peaceful environment but to meet the expectations of the
employees is a tough task. On the other hand, to drive the employees towards quality
performance need expertise in entrepreneurship management. It encompasses the interactive
sessions between the managers, employees and the customers. The findings were found to be
similar for both UK and Indian market.
Q.2 What are the advantages of being an entrepreneur of a family business?
UK market
Indian market
The CEO said that the
funding process is
supported by all the
family members. The
the investment costs
needed for the
workers and the
The CEO stated that
stability in the
business is one of the
advantages that can be
the sense of
commitment amongst
the employees is

43
entrepreneur needs not
to depend on the
outsider funders or
banks.
suppliers decrease in
case of the family
business. It increases
the profit margin to
some extent.
experienced by an
entrepreneur of family
business. He added
that ethics, values,
objectives of the firm
remain stable for a
long period of time
due to consistency in
the leadership styles.
much higher in the
family business. It is
due to the fact that
majority of the
employees belongs to
the same family.
Table 3: Advantages of being an entrepreneur of a family business
From the discussion in Advantages of family owned business in literature review, the
researcher found that funding for a family business does not require any external sources like
banks or angel partner. It has been found that all the family members contribute towards the
funding process in a start up business.
Q2.1 What kind of Organizational culture is being developed by the entrepreneurs?
In addition to that, it has been found that family businesses run in UK market consider the
revised investment costs in case of a family business. It implies that the financial profit in
family business is captured by decreasing the number of external employees and funders.
Most of the family members play the part of an employee or funder.
On the other hand, the researcher figured out that entrepreneurs in the Indian market is more
inclined towards a gaining a collaborative working environment in the family run business.
The researcher understood the fact that since the higher position of the company is being
handled by the heir of the house, stability in the ethics is expected. Consecutive generations
keep working towards the same goal. The amount of commitment and dedication is also seen
to be considerable enough to acquire the desirable position in the market.
Q.3 What are the challenges you have faced as an entrepreneur?

44
UK market
Indian market
The new innovative
products of the group
had to face a
challenge of imposing
its name in the minds
of the people. Along
with that, construction
of different outlets of
the group had been a
tough job as it initially
could not recognize
their potential market.
The CEO explained
that the prices of the
products could not be
decreased in the
market as the number
of funders and
shareholders are less
for the family
business.
The shares of the
properly could not be
divided equally
among all the family
members after the first
tenure. This led to
conflicts in among the
internal stakeholders.
The inflation rate in
the country has
stressed the meager
amount of outside
funders. In case, the
value of the currency
declined the company
had to decrease its
exports and limit the
business to the
boundaries of India.
Table 4: Challenges faced while working as an entrepreneur
By discussing the point Major challenges faced by family owned business in literature
review, the researcher found that Indian family businesses are more prone to family conflicts
as compared to the UK market.
Q3.1 How international markets are affecting by the family businesses?
It has been found that the equal distribution of shares is demanded by the family members
that cannot be fulfilled by entrepreneurs. Such situation leads to bifurcation of the equity
shares. The weak currency value is also acting as a hurdle for the Indian entrepreneurs. The
import and export activities of the family businesses are affected by the inflation rates.
On the other hand, it has been seen that entrepreneurs in UK is challenged by the complex
process on funding. Due to fewer funds the process of innovation and creativity is being
hampered in the family run businesses.
Q.4 What are the causes of such challenges in a family business?

45
UK market
Indian market
The manager
commented that since
the employees were
belonging to their own
family, they could not
get enough idea about
the current potential
market. The less
knowledge of
competencies has led
them to face such
challenges.
The CEO said that
only family members
have been the family
members for the new
start up. The
competitors in the
market lessened the
prices in order to gain
the competitive
advantage.
The CEO explained
that due to lack of
written documents the
equal shares of the
properties could not
be done by the
entrepreneur.
The manager stated
that lack of security
funds have created the
problem of funds. The
funds collected from
the savings of the
family should been
under a security
deposit scheme so that
it could have been
used at the time of
scarcity.
Table 5: Reasons behind the arrival of challenges while running a family business
In analyzing the point Major challenges faced by family owned business portion of
literature review, the researcher has observed that Indian market is exposed to fluctuations in
its economy. This has affected the family businesses as well.
Q4.1 How far the present market scenario has influenced the family businesses?
The mutual trust among the family members has developed the reluctance towards signing a
formal documentation. Thus, it has been found that the vulnerability of the Indian economy
has affected the progressions of the Indian entrepreneurs in terms of their imports and
exports.
On the other hand, entrepreneurs in UK market could not get the exact figures of the
competitions present in the market. The fluctuations in the prices and quality of the product
channelized by the competitive companies could not be measured by the entrepreneurs of
family businesses.
Q.5 What are your future plans for entrepreneurship management?

46
UK market
Indian market
The CEO proposed
that recruitment will
be done on the basis
of the skills and
qualifications.
The manager said the
emergency funds will
be conserved by the
firm in banks.
The manager assured
that written
documents will be
made for family
members as well as
the outsiders.
The CEO commented
that economists and
accountants will be
consulted for
upgrading the status
of the company in
world economy.
Table 6: Future plans to improve the entrepreneurship management in the business
By analyzing the Characteristics of Family Business in literature review, it has depicted
that entrepreneurs in Indian market are working towards strengthening their bond with the
family members. Along with that, the aim of the Indian entrepreneurs is to spread their name
in the world economy for which the family businesses are bending towards fund raising
schemes.
Q5.1 What is the difference between the future plans of entrepreneurs of India and UK?
The major difference is that the entrepreneurs in UK market are planning to excel the
periphery of their human resources. The contingency of remaining within the members of the
family are yet to be broken. New talents are in the verge of entering the family businesses.
The funding process is also planning to be running out of the family reserves to the walls of
the banks.
4.3 Qualitative analysis of the data collectedfrom managementexperts:
Q.1 What are your views regarding entrepreneurship?
According to 3 out of 6 experts, entrepreneurship refers to the process of starting a new start
up business with the help of a stable stock of human resources and financial resources. They
have added that the concept of entrepreneurship must not be confused with the concept of
small business. It has been found that the entrepreneurship business is run by a single person
or a small group of people. They added that generally the aim of an entrepreneur business is

47
to channel an innovative product that can excel the existing standards of the present market.
Apart from that, 2 out of rest of the 4 experts said that the funds for the entrepreneurship are
generally gathered from the outside investors and the venture capital. Only 1 management
expert opined that the profit and losses earned by the entrepreneurship solely depend on the
performance of the entrepreneurs.
On the other hand, it can be said that the credit for the gain or loss directly goes to the sole
trader. The involvement of few shareholders is counted as an important characteristic of
entrepreneurship. All the management experts explained that the entrepreneurship is quite
prone to huge losses and declination.
By discussing the Concept of Entrepreneurial management in literature review, the
researcher found that management experts consider the entrepreneurship to be risky business
type. It implies that the global acceptance of entrepreneurship needs a skilled and experienced
outlook in order to grab a profitable stance. Along with that, the innovation and creativity has
been found as prime notions of entrepreneurship. As the sole trader takes the responsibility of
the whole business, there needs to be a single focus towards upbringing the company in such
a way that it acquires the attention of the potential market. Therefore, it can be summarized
that entrepreneurship focuses on the singular attempt of a person to run a business without
much support of outside human resources.
Q.2 What are the skills of a successful entrepreneur in a family owned business?
2 out of 6 management experts said that in family business an entrepreneur owes the liberty
to intensify the passion and interests. It implied that business does not stand to be a
compulsion for an entrepreneur. On the other hand, other 2 out of rest of the 4 experts said
that in addition to the in build talents, an entrepreneur must develop some skills in order to
run the family business efficiently. The expert further explained that the communication
power of the entrepreneur must be convincing enough to pursue the employees and the
customers at the same hand.
Only 1 management expert said that the inclination towards the selfless serving must be the
motto in case of a start up business. 1 management expert compiled the fact that networking
must be an additional skill in an entrepreneur. The networking must be established with
suppliers, skilled talents, shareholders, financial sources, local government bodies and the
potential customers. Another expert agreed to the fact that an entrepreneur must have an

48
academic qualification of business management. It will help the entrepreneur to manage the
different aspects of family business.
The researcher also linked this question with Concept of Entrepreneurial management in
literature review and found that interactive skills must be improved in an entrepreneur who is
about to start a family business. It can be said that if an entrepreneur is able to interact well
with the employees then only the employees would be able to perform towards the
achievement of the objectives of the business. In contrast to that, it has been observed that
most of the employees in a family run business are the family members. In such cases, the
interactive skills need to be used to attract the customers. It suggested that the services
towards the customers must be in accordance to the desires and needs of the customers. It
implied that profit making must not be the sole aim of the entrepreneur working in a family
business.
Q.3 Which are the different sources needed for a family business?
4 out of 6 experts said that in case of a family business, the self-finance is the best way at the
time of a startup business. They have added that the savings of the family can be incorporated
ton fund a new start up business. They further commented that other family members and
friends can be consulted for the extra funds. On the other hand, the rest of the 2 experts said
that an entrepreneur can apply for bank loans and government grants at the time of new start
up. They have also opined that an entrepreneur might find an angel investor who might find
interest in the passion of the entrepreneur. In such cases, the interactive skills of the
entrepreneur can act as a boon. All the experts commented that along with financial resources
the vital need rises with the efficient work force and suppliers. The human resources need to
found out by the management so that a laborious team can be formed. The suppliers are the
backbone behind the production process of a company. Therefore, relations need to be
developed with the suppliers and the employees so that the objectives of the company can be
fulfilled in least time frame.
The researcher has linked this question with Advantages faced by entrepreneurs in
literature review and found that an entrepreneur must rely upon the bank loans and family
funds to start a funding process of a startup business. In addition to that, it has been found
that some of the entrepreneurs must try to find some outsider funders those have the
confidence in sharing the responsibility of a family business. Majority of the experts
commented that financial funds are the biggest priority for a startup business whereas human

49
resources stand to be in the next position that includes the various suppliers and the new
recruits.
Q.4 What are the possible challenges faced by entrepreneurs?
3 out of 6 management experts agreed to the fact that compensation problems can arise
between the family members of a family business. It implied that the family members can
demand equal shares in the business profits. Along with that, equal salaries, additional
benefits and non-monetary benefits can also be asked by the family member. 2 out of rest of
the 3 experts commented that high turnover rates of the family members can create a sense of
disturbance among the non-family members. Only 1 manager raised the issue of confusion in
funding process. He added that at the time of scarcity there can be lack of funds if all the
savings of the family have been invested at the time of startup.
By linking this section with Challenges faced by entrepreneurs in literature review, the
researcher found that emotional clashes are likely to arise during the family businesses. It can
be predicted that the all the family members of a family business is not always satisfied with
the shares reserved for them. Similar protests can arise from the non-family members as well
as they might claim to dedicate equal amount of labor. It can be said that the confusion
regarding the different responsibilities is a prevalent challenge for the entrepreneur of a
family business.
Q.5 What are your suggestions for overcoming the challenges faced by entrepreneurs?
2 out of 6 experts suggested on the equal demand of the shares can be done through legal
ways. The head of the family owned business can make written documents and distribute in
equal shares. So that in future the heirs will not have any business problems in looking after
the business. Further, 3 experts suggested on non-family member’s involvement in the family
business. These experts suggested that this non-family member would get equal salary and
the entire requirement working under the family business. It is so that the non-family
members are unable to claim their demand. Therefore, the working hours and other facilities
will also be provided like the other employees and no differentiation will be made among
them. Further, only 1 expert suggested that family owned business should have savings of the
profit and fix the amount for the future use. In the time of crisis, the savings would help the
family business run. The experts also suggested that the family business should not invest all
the finance in new start up instead keep the finance fixed in the bank.

50
The researcher found that the most of the experts agreed that the family owned business
should made legal written document so that the family heirs may not face any problems. This
way the heir could no claim in future on the equal shares of the property. Whereas non-family
members can be employed under the business owned family. Therefore, the researcher
suggested that the entrepreneurs should make legal written document according to the laws of
the country in order to divide the equal shares.
4.4 Summary:
In this chapter, the researcher has critically analyzed on the primary data to get the point of
view of the entrepreneurs and management experts from UK and Indian market on the
challenges faced in the family owned business. Through qualitative analysis the researcher
collects data. The researcher has explained the collected data in Microsoft word sheet in a
descriptive manner for better understanding. The findings of the researcher have been linked
to the different sections of literature review. It has found that that the future scope of the
family business could not be fully understood from the literature review. For that purpose the
responses of the management experts have been considered seriously that could be beneficial
for the family run businesses.

51
Chapter 5: Conclusion and Recommendation
5.1 Conclusion
In this chapter, the researcher has made a conclusion of overall discussion. The researcher has
interviewed the entrepreneurs of Tata Group, ABF Group, Birla Group and Bestway Group
and some management experts. After discussing with them, the researcher has come to the
conclusion part of this study. The researcher has identified that the family business can be
divided into types in accordance to its characteristics. The researcher has found that the UK
and Indian entrepreneurs have a basic different. The Indian entrepreneur has to face huge
family conflicts that affect their family businesses. On the other hand, the UK entrepreneurs
suffer from the complex funding process.
The researcher has found out that entrepreneurship and family business are deeply related as
both usually start with some inexperienced people. Though, with some exclusive strategies
both of them can be promoted as professional businesses. Actually, any business owner will
be considered as an entrepreneur at the beginning. Yet, all entrepreneurs will not run a family
business. Family businesses face several challenges and the business owners should
overcome them to achieve their ultimate goals. Family businesses can be either small or large
in sizes. Obviously, large businesses face more problems than the small one. However, large
businesses have huge employees to handle the challenges together. The researcher has
identified that entrepreneurial management may help the family-owned business owners to
achieve success.
5.2 Objective Linking
Objective 1: To undertake a critical literature review on entrepreneurial management
This objective can be linked up with the qualitative question 1 from the group of
entrepreneurs and the qualitative question 1 from the management expert. The researcher has
asked about the basic concept of entrepreneurship in family business in both these questions.
Even, the first objective of this study has mentioned about the critical evaluation of
entrepreneurial management. Thus, the researcher has successfully met up this objective with
the qualitative questions of both groups. Most of the entrepreneurs contain a clear view about
the entrepreneurship management and its impact on the family-owned businesses. Therefore,
it can be said that the researcher is successful to meet this objective.

AR_1502_ENTREPRENEURIAL MANAGEMENT

AR_1502_ENTREPRENEURIAL MANAGEMENT

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