Family Business Expansion Kerala

DISSERTATION
Field-Based Project submitted in partial fulfilment of the requirements for the
degree of
Master of Business Administration (MBA)
at the Chester Business School, by
NAME:
DATE: 10THJANUARY 2015
Family Business Expansion in Kerala

ACKNOWLEDGEMENT
I would like to dedicate my successful to those who had helped me through all the research
process, the dissertation would not have been possible without the support and contribution.
Firstly, I would like appreciate the cooperation of the business owners of Keralawho fully
cooperated and gave their precious time for the underlying research. Without their support, I
would not have been able to achieve the aims and objectives of the research. Their
contribution gave the data for empirical analysis which is key to the success of the research.
Secondly, I am particularly grateful for the assistance given by my mentor and professor who
gave me valuable feedback and suggestions during the course of research to make it a quality
research. Also, I would like to extend my gratitude to my fellow students, family members,
and friends who supported me with this research.

ABSTRACT
Kerala is a hub to family businesses in India and a large number of family businesses can be
found here. These businesses have been doing their businesses in traditional way but they
have started realising the need to adapt their businesses in accordance with the recent
globalisations trends in order to give further growth to their businesses (Sampath, 2001).
Majority of the businesses lack the capital required to fuel the growth and in order to be able
to pace up their growth maximisation strategies, they have started adopting dilution as a
strategy (Economic Times, 2013). A large number of family businesses have started showing
their interests in the dilution process. The family firms that had limited their operation in the
state have started expanding their operations pan India (Economic Times, 2013). Some of the
family businesses have even started inking strategic tie-ups with leading global players in
order to give requisite growth to the business (Sampath, 2001). Confederation of Indian
Industry (CII) is the major government body that looks into the matter of family businesses
and ensure the growth they are striving for. In 2013, the body selected 10 firms to offer them
mentoring services to help them grow. The family businesses in Kerala have some unique
challenges which limits their growth. These family businesses are obliged to follow the
traditional ways of doing businesses (New Indian Express, 2013). Due to global slowdown,
India has emerged as a lucrative market for the growth of many MNCs which poses a great
threat to the local small and medium family businesses (New Indian Express, 2013). The
second and third generation of the family businesses have started realising the need to make
the drastic changes to the ways of doing their business in order to sustain. The successors of
these businesses follow the market trend and are ambitious to expand their business and make
it a big affair (Chakrabarti, et al., 2008).
The underlying research tends to assess the existing trends and practices in family business
expansion, and find out different challenges and opportunities family businesses have to
expand and grow. The paper finds that the main barrier of the family business in Kerala is the
traditional ways of doing their business and reluctance to change and take risks in order to
grow in the business.

Table of Contents
ABSTRACT............................................................................................................................... 3
1. Introduction............................................................................................................................ 6
1.1. Aim and objectives.......................................................................................................... 6
1.2. Background to the study.................................................................................................. 6
1.3. Justification for the study .............................................................................................. 10
1.4. Context & significance for organisations...................................................................... 11
2. Literature Review................................................................................................................. 13
2.1. Introduction................................................................................................................... 13
2.2. Definition of the Key Terms ......................................................................................... 13
2.3. Family Business Progression in India ........................................................................... 13
2.4. Challenges faced by Indian family businesses.............................................................. 14
2.5. The Next Generation..................................................................................................... 17
2.6. Attracting and Retaining Non-family Employees......................................................... 17
2.7. Women of the Family Joining the Family Business ..................................................... 18
2.8. The Realities.................................................................................................................. 18
2.9. Liberalisation effect on Family businesses ................................................................... 19
2.10. Relevance to success of family business..................................................................... 20
2.11. Trends in Kerala’s Family Businesses ........................................................................ 22
3. Research Methodology......................................................................................................... 25
3.1 Introduction.................................................................................................................... 25
3.2. Research Philosophy..................................................................................................... 25
3.3. Research Approach ....................................................................................................... 26
3.4. Research Purpose .......................................................................................................... 26
3.5. Research Method........................................................................................................... 27
3.6. Sample Selection........................................................................................................... 27
3.7. Data Collection.............................................................................................................. 28
3.8. Data Analysis ................................................................................................................ 28
3.9. Role of the Researcher .................................................................................................. 28
3.10. Ethical Considerations................................................................................................. 29
3.11. Accessibility issues ..................................................................................................... 30
4. Results .................................................................................................................................. 31
4.1. Introduction................................................................................................................... 31
4.2. Survey Results............................................................................................................... 31
5. Discussion ............................................................................................................................ 51

6. Conclusion............................................................................................................................ 54
6.1. Introduction................................................................................................................... 54
6.2. Meeting Objectives ....................................................................................................... 54
6.3. Recommendations ......................................................................................................... 54
6.4. Research limitations ...................................................................................................... 55
6.5. Future Scope.................................................................................................................. 56
References ................................................................................................................................ 57
List of Figures
Figure 1: Age group ................................................................................................................. 32
Figure 2: Gender....................................................................................................................... 33
Figure 3: Experience ................................................................................................................ 34
Figure 4: Need to change ......................................................................................................... 35
Figure 5: Ways to grow business ............................................................................................. 36
Figure 6: Concern about cash flow, credit line, and business surplus ..................................... 37
Figure 7: Identification of successor ........................................................................................ 38
Figure 8: Plan for development of next generation.................................................................. 39
Figure 9: Services of management consulting firms ................................................................ 40
Figure 10: Evaluation for expansion ........................................................................................ 41
Figure 11: Strategic business plan............................................................................................ 42
Figure 12: Communication of strategic business plan ............................................................. 43
Figure 13: Leveraging control.................................................................................................. 44
Figure 14: Willingness to take risks......................................................................................... 45
Figure 15: Age-risk correlation................................................................................................ 47
Figure 16: Extent of risk........................................................................................................... 48
Figure 17: Experience and approach to growth ....................................................................... 49
Figure 18: Age and management consulting firms .................................................................. 50

1. Introduction
1.1.Aim and objectives
The paper aims at analysing the how family business can effectively expand their business.
The research has the following objectives:
 To assess the existing trends and practices in family business expansion.
 To find out different challenges and opportunities family businesses have to expand
and grow.
 To recommend family business owners on how to expand and growth their businesses
effectively.
1.2. Background to the study
Tan and Fock (2001) say that a family controls half of East Asian economy. Contribution of
these family businesses to the Asia’s overall economic growth is assumed on the successfully
growth in their businesses. Majority of family businesses of East Asian countries, namely
Taiwan,Indonesia, Hong Kong,Malaysia and Singapore are Chinese owned. Some of them
claim that family business has no growth in the multinational enterprise due of the transition.
They have carried out a detailed study of the Chinese 5 family businesses of Singapore which
have successfully made a transition in the size and the growth from the national boundaries to
the family generation. The trade empires extend in Asia pacific region.
Rutten (2001) has studied key debates of the entrepreneurship in the south and the Southeast
Asia which indicates the emphasis on the cooperative forms of the business organization. As
mentioned that the collectivism in the business activity seems to be the main causes for the
Asia’s backwardness, most recent nations highlights that the family enterprises and the
business networks reports far in the Asia’s economic growth (Sorensn, et al., 2009). They
have also compared different forms of the business organizations in the rural entrepreneurs of
India, Indonesia, Malaysia, the Chinese and the Malaya owners of the combine harvesters of
the Muda region, Muslim proprietors of the iron foundries of the Central Java. Findings have
been lined with the studies on the European entrepreneurs. Therefore, it is a reason to

reconsider any notions of the significant variations in the business organization between the
Asian and the European entrepreneurs.
Chua, et.al (2003) conducted an analysis of the issues facing the top executives of the 272
Canadian family firms. The results illustrate that the progression is their main concern,
supporting on the main focus of the family business of the researchers on the successions
issue. The results also indicate that the concern about relationships with nonfamily managers
has a crucial consideration. They have also used an agency theory in order to explain as to
why the relationship of nonfamily managers seems to be more important. The empirical
results indicate that the criticality and extend of the company’ dependence on the nonfamily
managers are statistically noteworthy, determining the importance. The study involves a
relationship with a nonfamily management, which is a neglected research topic along with the
points for an original direction for the research in the family business of management.
Auch and Lee (2003) examine the critics and proponents of Asian economic of organizations
that has been distant with an ideal management model of the family business which have
rarely an identification in the change and the continuity in such management structures during
the analysis of the family controlled business groups of the countries such as Singapore and
the South Korea. In their view, these business groups professionalized their management, but
retained family control and corporate rule before crisis. The crisis, nevertheless, has still
increased in the pressure for such groups to abandon family control with corporate rule. The
Singaporean and Chinese business groups inclined to release their firm grip on the corporate
rule through absorbing additional qualified managers into the upper echelons. Only few of the
echelons were on an edge of the bankruptcy, abandonee of the corporate regulations to the
professional managers (Sharma, 2008).
Dyer (2006) studied the performance of the family owned firms and recommended that most
of all the research are unsuccessful in describing the family’s consequences on the
organizational performance. He studied the correlation between the business performance and
families. He found that there is a great correlation between these two. The performance of a
family business largely depends upon the characteristics of the families and their willingness
to leverage to liberalization (Astrachan, & Jaskiewicz, 2008).

Westhead and Howorth (2006) recommend that agency and stewardship theories can explore
for the associations between the ownership and the management profiles, the performance and
the objectives of the family firms. Using the data of the privately held family firms in the
United Kingdom, they inspected a range of the performance measures and objectives. The
analyzed results show that a management is quite more than an ownership arrangement of the
family firms which was usually associated with the selected performances of the. However,
they failed to find whether hiring family member for higher management roles have any
financial implication or not.
Venter, et.al (2006) examined the success related factors which influences on the succession
procedure in the small or the medium-sized of the family business that are empirically
investigated. The study was done in South Africa between 2,458 managers and the successors
in 1,038 family businesses. The respondents were recognized via snowball’s sampling
method. The apparent success of a succession process was measured through an underlying
dimensions: one is satisfaction with a process and second one is continued profitability in the
business. The sustained profitability of a business has been influenced to the compliance of a
successor to overtake the business (Chrisman, et al., 2009), the relationship between the
successor and outside manager and the preparation at that level of a successor (Royer, et al,
2008). Relationship between the manager and the successor influences by an extent to which
the interpersonal relationships can be expressed as harmonious (Rutherford, et al., 2008).
Motwani, et.al (2006) examine the survey results which were conducted among the 368
family-owned small to medium size enterprises (SMEs) with regard to importance, nature,
and extent of succession planning. By categorizing SMEs according to their annual revenues,
total number of employees, and number of family members employed within the firm,
significant differences were found between larger and the smaller firms. The family members
generally join their company for unselfish reasons (Litz, 2008). The issues associated to the
family relationships are significantly more vital in the company which was many family
members that were hired in the firm (Astrachan, 2010). Furthermore, the firms with less than
US$1m revenues had a high priority placed during the selection of a successor that possesses
tough sales and the marketing skills (Basco, & Rodríguez, 2009). Regardless of the size,
which tends to be more important for a family owned based company for the developed in the
formal plan of the succession, both types of firms feel the need to communicate the

individuality of a successor, by providing mentoring or training to the current CEO
(Lambrecht, & Lievens, 2008).
Allouche, et.al. (2008) say that family businesses are going through rapid development from
the last two decades. Such companies are likely to perform and excel better than the non-
family businesses. They showed that a CEO is going to underperform in a family business
despite having the requisite qualifications and skills and the family interference is higher in
these firms which do not allow the CEO to work independently and perform to his/her
potential which will ultimately downgrade his/her performance. An effective and efficient
CEO is required to take independent decisions based on his/her own conscience and
experience and if someone interferes with the way they work they will not be able to optimize
their potentials which will ultimately reflect on the performance of the family firm too (Orth,
& Green, (2009).
Distelberg and Sorenson (2009) have extended the present system vision of the family
business by providing a good framework to understand the family businessholistically. The
structure extends the meaning of the family fist which represents the importance of the
balanced system. They argue on the goals, strengths, resource transfer, and the limitations of
the each of the type of the system describing how the firm’s adaptability and how the resource
flow sways away in the family business systems. They argue to understand the family
businesses strength, which must be understood by the members-the goals and values which
guide to the family business.
Kowalewski, et.al (2010) state that the controlled family involvement in the firm impacts
performance of the firm positively in emerging market. Using the panel of a 217 shined
companies from the year 1997 to 2005, the scholars found a reversed U- shaped relationship
among the share of thefirm performance and the family ownership.
Collins, L. and O'Regan, N. (2011) state that family business has evolved mere significantly
in the previous decades and thus, today it is quite accepted and also respected in the field of
enquiry. They found that the earlier researches have been mainly in the small and medium
scale organizations, rather than entire family business system and therefore it would not be

viable to generalize the findings to overall population as there are chances of great variations.
To maintain the impressive of the upward trajectory, the management of family business and
the research needs to hold on to a new theoretical perception (Watson, 2009), and the
approaches mainly to those who come from a disciplines, psychology that has a tenuous link
to the family business studies (Holt, et al., 2010). It also needs to gains the learning which
could be benefitted from the practitioners and then develop the useful discourse between the
stakeholder groups of the family business in the community (Dyer, & Dyer, 2009).
1.3. Justification for the study
Family businesses are backbone to Indian industry as they constitute majority of businesses in
the country, but the interest and knowledge creation is limited to Western academics. In the
recent past, scholars have begun exploring the topic but there is still lot of scope to further
explore different aspects of the family business. The family businesses in the country has
been operating through their traditional way but they have started realising the need to expand
their businesses by deploying latest technologies and professionalization. Despite their efforts,
there are just handful of the family businesses which have rose to prominence.
Rapid economic expansion and economic liberalization have just created huge growth
opportunities and most of the family businesses have tested their resource capabilities in order
to respond. Some of the family businesses have adopted a preservation route in order to save
their existing wealth, while, others have followed entrepreneurial rout in order to exploit the
opportunities to the optimum. At the heart of any family businesses is family and big
business decisions are taken taking them into considerations. In addition, wealth preservation
is yet another consideration which deters them to take risky expansion decisions. Generally,
the business decisions are taken considering everyone in the family into consideration and
even the person governing the family businesses is not independent to take all the decisions,
which creates a big challenge for him/her to professionalise and expand the business by taking
risky decisions. The major dilemma of majority of the family business firms has been the
selection of expansion route. They are not sure whether they should take a risky business
decision, wealth conservation, or combination of both. The situation even gets intertwined
with the mission of family and business which often contradict. This poses a great challenge
for business expansion which requires purely entrepreneurial route.

The family businesses in India are fascinating in the sense that they involve of mutual
dependence of business and family, which have conflicting characteristics per se. Some of the
crucial dimensions that tend to determine the cohesiveness between the business and family
are: succession planning, rewards and recruitment for non-family candidates, rewards and
remuneration planning, estate and retirement planning, grooming and induction, ownership
structure, resolving conflicts, preserving wealth, business vision, governance and strategy,
and family vision. Research evidence on the topic suggest that when operating environment
gets pressurized, these dimension also come under pressure. There is a challenge for the
family businesses to overcome these constraints in order to fuel their growth and expand
sizeably.
Some of the fourth generation family businesses have adopted the strategy to involve
diversified portfolios, and managed jointly by outside professionals and family members.
However, these all are different in terms of leadership quality, business performance, family
unity, and response to the external and internal environmental forces. Family businesses
having harmonious relationship and unified command have responded well the liberalization.
The quality of leadership, of course, has impacted a great deal in growth and expansion of
family business.
Despite many evidences in the field, there are very scarce empirical evidences to support that.
There are plenty of evidences from the Western countries but they cannot be applied in the
Indian context to a great extent as it has different characteristics.
1.4. Context &significance for organisations
Family businesses contribute to over 60-70-% of GDP in bother developing and developed
countries, and India is no exemption to it. Kerala state has been one of the key states in India
in terms of having a longstanding family business culture. Majority of the businesses in
Kerala are family businesses. Business families in Kerala face certain unique challenges
primarily because of their aspirations and attitude. A few of family businesses in some
industries have been able to capitalize upon the liberalization but a huge number of them still
lag behind, specifically the family businesses in retail.

There are a number of factors which have restricted them to expand and grow in a business
friendly external environment. The success of family businesses depends a lot on succession
planning and harmonization. According to different observations, only 13% of the family
businesses are able survive till third generation and just 4% survive beyond third generation
primarily due to the conflicts in the families. Majority of family business owners in Kerala are
clueless on how to expand their business and grow in an environment conducive to growth.
The lack of empirical findings on the topic creates more confusion for them and they cannot
take any expansion decisions confidently. This research will provide them will a great insight
on how to successfully expand the family business and carry them to many generations.
Majority of the family businesses in India are conservative and they prioritise wealth
conservation instead of further wealth creation. It is observes that they do not pay much
attention to the environmental forces which ultimately restrict their growth. The common
thing about the successful family business is their attention to the marketing environment of
their business. Such companies spend heavily on marketing activities keeping the long-term
effect in mind. On the other hand, the conservative organizations consider it to be cost-centre
and fail to recognize the long-term effect of the same. Unless they leverage their resources
and adapt to the new trends and technologies, it is quite difficult for them to grow in a highly
competitive environment. If they continue to operate the way they have been operating from
generations, they can even perish and disintegrate.
This paper will give them insight on how to grow in a completely new and competitive
environment. Specifically, the researcher will focus on how to respondent to the
environmental factors in the best possible manners and grow. The paper will bring about the
empirical as well as conceptual evidences to show why they should adopt certain methods of
doing business in order to expand their business and break their longstanding conservatism
approach.

2. Literature Review
2.1. Introduction
Family businesses are the heart of Indian economy (Budhwar, 2001). According to Indian
facts and studies it was found that more than 90% of the businesses are family owned, so that
other communities of business also rely on them (Singh, & Gaur, 2009). Family business
collaborates with other business on different levels such as retailers, contractors, distributers
and transporters (Bertrand, et al., 2008).
2.2. Definition of the Key Terms
According to Sharma (2004), there is no single definition of family businesses as different
scholars have defined the term differently making it difficult to reach a single definition. As
per the requirements of this project, it is required that we focus family-controlled business.
Authors such as Anderson and Reeb (2004), La Porta et al. (1999), and Panunzi et al. (2006)
have defined a family business as a company “where a family (that is one person, or two or
more persons related through marriage or blood) owns 20% of the voting stock and this firm
is represented in the board and /or the top management”.
The definitional parameters will be taken into the consideration while carrying out the
research. Family Business is a widely utilised form of the business across the world (Melin
and Nordqvist, 2007). According to Ward (2011), a family business can be defined as a
commercial organisation where in the decision-making is largely controlled and influenced by
different generations of the family.
2.3. Family Business Progression in India
The roots of Indian industrialists are recent, largely after First World War. Before that the
industrialists were primarily moneylenders and traders engaged in the hustle bustle of the
bazaar. Even in Ahmadabad and Bombay western India the cotton mills evolved in the last
half of the 19th century with the rise of trading communities such as Guptas and Aggarwals in
the North, Gujarati Jains, the Parsees, Banias, Memons and Muslim Khojas in the West,
Chettiars in the South, and Marwaris across India (Hensman, 2013).
It is very true that family businesses are important for economy of India but still the attention
is given to them when people get opportunity to criticise them (Zhang, &Ma, 2009). Usually

people accuse them for their unprofessional approach, favouritism, squabbling and
misconduct (Carney, 2005). The famous cliché that is frequently reported and considered as a
common truth that is universally known (Bird, et al., 2002). It is said that the first generation
of the family builds the business and the second generation joins or consolidates it whereas
the third generation is responsible for the any sort of destruction that occurs in the business
(Morck, & Yeung, 2003). People very easily forgets that it is very hard to achieve longevity
in any sort of business and starts accusing the short term of family businesses (Hamilton,
1991).
Tom Peters and Robert H Waterman published their book “In Search of Excellence” in 1982
in which they have registered a 62 business enterprises as top performers. By the beginning of
1992, most of these listed companies were seen suffering from losses. Not only this top 500
companies listed in Fortune magazine 1970 were nowhere to be seen in the magazine of 1983.
According to Jagdish Seth’s book “The self-destructive Habits of Good Companies”, it was
found that in originality or from the surveys it was revealed that the companies in Japan and
Europe, be it family owned or other corporate businesses the total life span of businesses is as
small as 12.5 years. There are many reasons for the short life span of businesses but still
family businesses are mentioned in particular for short success period (Ghemawat, & Khanna,
1998). Although at time business that do not have family bonding are the one which fails to
establish itself for a long time (Rutten, 2001). If researched properly it can be seen that in an
average the family businesses does really good and survive and not even this, they also at
times beat the other business corporations. From the study done by John Ward (2007) which
was later quoted by Amy Schuman, FBCG, Inland Press, Feb 2010 on the basis of Morgan-
Stanley, it was found that the total return on equity generated by family business is around
18.5% whereas in its comparison the non-family corporation only generates 14.1%. By
studying the 12th April 2001 edition of “A Newsweek” it is found that the family businesses
does much better when compared to the other business corporates in all the primary stock
indexes of Europe.
2.4. Challenges faced by Indian family businesses
Most of the family business that are set in India are quite young in comparison to other
European countries (Chandavarkar, 2002). India had to face wars in year 1962, 1965 and
1971; thus India became business friendly only after 1980 so that it can boost its economic
environment (Khanna, & Palepu, 2005). V-Guard is a pioneer electrical appliance firm that

started it operation in 1977. Currently, the firm has a turnover of INR 13.65 billion. This
company was established in the period. V-Guard boasts on a staff strength of 1700 and over
5000 workers engaged in the production process. They have a network of more than 10,000
retail dealers and 200 distributors and service centres spread all over India support the brand
with after-sales service. Mithun K. Chittilappilly is managing director of V-Guard Industries
Limited. According to him, the company does not face any major challenges in the recent
future. However, he is points out three challenges that can potentially pose challenges for the
company. First, there is a stiff competition from the existing player and entry of the new
players. Second, attracting and retaining talent is difficult in this contemporary business
scenario. Third, there are market challenges in terms of technology and innovation. The
company is planning to expand its business in the domestic market as they receive majority of
the revenue here and the company has no plans for further overseas expansion (PWC, 2013).
From 1980 to 1995 numerous family businesses were proposed as well as established, but
some family business could not work properly because of differences in family and
resultantly the family businesses also split with them in last few years (Veliyath, &
Ramaswamy, 2000). Numerous families are still operating with its large business structure
although the majority are SMEs (Lensink, et al., 2003).
LNJ Bhilwara Group is one of the largest and oldest family business in India which was
established in 1861. The group is into diversified businesses such as Graphics Electrodes,
Textiles, and Power. The company has a turnover of $1138 million corporate and it constantly
upholds the trust of 100,000 shareholders and its partners worldwide. With $1360 million, the
company is one of the largest business houses in India (LNJ Bhilwara Group, 2013).
According to L N Jhunjhunwals, Managing Director, the biggest hurdle or the challenge the
company face is the external environment of India. H believes that despite presence of a huge
number of businesses in India that political and legal system of India is not conducive to
business. In addition, the government has no support in terms of availability of the capital.
Equity funding is yet another challenge for the company (PWC, 2013).
McLeod Russel is again one of the oldest family business in India which is a sister concern of
Williamson Magor. The company is the largest tea producer in the world. The history of the
company dates back in 1869, when two British men, Captain J.H. Williamson and Richard
Boycott Magor, formed a partnership form with the name, Williamson Magor & Company, in
order to service the requirements of tea estates in Assam. In order to expand more, the

company has been recently on acquisition spree. In 2005, McLeod Russel acquired Borelli
Tea Holdings Limited from the Magor family of England. In 2006 and 2007, the company
also acquired The Moran Tea Company India Limited and Doom Dooma Tea Company. All
three companies have been merged with McLeod Russel India Limited which makes it the
largest tea producing company in the world (McLeod Russel, 2013). The biggest challenge
that the company had faced in the past is that they had integrated and cross linked businesses.
However, they have evolved over the years and diversified in different domains. The
occurrence of conflict is yet another challenge in the family business which can potentially
jeopardise its business. The company believes in adopting perpetual outlook and futuristic
approach both in order to balance itself. They have a combination of professionals and family
members in the board so that they can come up with the most suitable and feasible solutions
for different problems (PWC, 2013).
D B Corp Ltd., informally known as the Dainik Bhaskar Group, is the largest print media
company in India. Established in 1956 to cater to the needs of Hindi speakers, the company
has established a number of newspapers and magazines published across the country. Dainik
Bhaskar newspaper daily is the highest selling Hindi newspaper in the country (D B Vorp,
2013). According to Girish Agarwal, Director, the company does not face any challenges in
terms of professionalism as the person at the top is a family member as well as professional.
He is responsible for the performance of the teams. The internal challenge is to motivate
workforce, retain talent, and keep them focused. The external challenges are the business
milieu in which they operate in. The government policies and laws surrounding the business
is not quite conducive to business (PWC, 2013).
Usually, the culture of family business are usually entrepreneurial, malleable, overprotective,
responsive and economical at the same time (Gersick, 1997). The name of the family connects
with the businesses thus to safeguard the family name they enterprises stand for value,
associations, long term commitment and trustworthiness (Carney, & Gedajlovic, 2003). They
are also very efficient in their work (Hamilton, 1996). Usually they have to work hard with
limited resources so that they can make the most out of it (Carney, 1998). A big multinational
company has various benefits with them they can get free loans and land from government
but for a family businesses things are not as simple as it is for the multinational companies
(Romano, et al., 2001). Family business have to face various challenges to achieve their goals
but still they hold their business with a true spirit of entrepreneurship (Almeida, &

Wolfenzon, 2006). Family business gain some distinctive benefits particularly form their
rights (Whitley, 1992). Their hard work help them to extract the opportunities from the
problematic problems that a businessman faces (Whitley, 1991). They are also not very strict
as bureaucrats thus it helps them in taking fast decisions. (Colli, 2003) Family businesses
comprises of emotional as well as economical stakes that searches for nonstop value creation.
Thus they can work in speed with their progressive logics (Redding, 1991).
Numerous advantages are enjoyed by the Indian family businesses because of its inbuilt
characteristics as well as social beliefs that supports their structures (Field, et al., 2010;
Chakrabarti, et al., 2008; Khanna, & Palepu, 1999; Morck, & Yeung, 2003). But these
advantages can only be utilized if there is unity in family (Manikutty, 2000). This sort of
typical challenges are faced today by new entrepreneurs because unity is found nowhere in
joint families nowadays because of constant battle for becoming the top priority (Dutta,
1996).
2.5. The Next Generation
Generation gap between the family members of the family business is a major concern
nowadays (Getz, & Carlsen, 2005). The founder of the business has done things by himself all
his life thus he is used to di thing hi own way (Wilkinson, 1996). The unique culture found
today in the family businesses in India are: Narrow-minded, owner centric, less important
scale, with a controlled perception, and traditional way of thinking (Ahlstrom, et al., 2004).
Thus accepting outsiders is a very problematic issue (Poza, 2013). Even accepting new
generation of family members is also not a very easy task for them because the difference in
generation bring difference in the way of thinking too and when two people with different
thinking come together for work purpose the clashes are bound to appear (Chrisman, et al.,
2003). The young generation are forward thinking with great aspirations thus they won’t
understand the mind-set of their conservative elders (Yeung, 2006). This gap only increases
with time and the conflicts between father and son may increase and in this situation mother
has to take up the role of CEO.
2.6. Attracting and Retaining Non-family Employees
The next challenge that the family business have to take care of is the joining of non-family
member in business. The culture that has solidified in years stands as a barrier between
members and non-family member of the business. The family business owner is always in a

dilemma if he or she should trust the non-family member or not (Stewart, 2003). Usually the
family business stakes are high so they always confused about how much authority they must
provide to the outsider. The owner of the business usually looks into the entire matter but
proving this authority to outsider is not easy. The outsider may face difficulties in adjusting
with the culture of family businesses. Outsiders are involved in business to develop a
structured corporate environment that is not otherwise visible in family businesses. Many of
the family businesses in India are nowadays opting for non-family employee for their family
business based on their qualification and professional aptitude without finding out that
whether they will be able to fit in well with the culture of the firm. They even don’t pay much
attention on the settling down process of outsiders (Getz, et al., 2004).
2.7. Women of the Family Joining the Family Business
In India the society as well as the family businesses have male domination. Women
participation in business is accepted and encouraged in India, but still for employing a women
in family businesses, there are lot of reservations. Raising kids and taking care of the family is
considered to be the main responsibility of women in the social context of the Indian business
families (Lee, et al., 2003). So, women ability to manage both family and workplace is
considered when women employment related issues are raised in family business. Highly
educated and women are nowadays asking for their rights in the family businesses although
traditional values of family model don’t allow them of such rights. But with time, family
businesses will have to give women their rights too and along with it they will have to fulfil
their demand of participation in businesses. Taping in talented people will only help the
family business to rise (Carlock, & Ward, 2001).
2.8. The Realities
In India family businesses are expanding with a great speed. The increase in the growth of
family businesses with older generations is also unthinkable. Acceptance is necessary for the
parent generation whereas the next generation must think high of their parents and their
wisdom and also understand very clearly that hard work is the only tool that can help in
gaining success.
The dynamics of family business and parting problems away from people can only solve the
challenges that are faced by the family businesses. The members of the family business must
clearly understand that every generation have its own way of thinking thus there is no one

who is wrong in their conduct. As soon as there is understanding in between the different
generations they will respect each other and work pleasantly altogether. If the family
businesses can do this then only they can acquire the benefits (Yeung, 1999).
2.9. Liberalisation effect on Family businesses
According to Goode (1982), family is the oldest surviving institution, but recently only its
heart i.e. family business has been recognized and started receiving the academic attention.
Zahara and Sharma (2004) have concluded from the reviews and literature that the researches
on family firms have yet to capture the present fragmented as well as evocative state.
According to Ward (1987), between family as well as business there are intangible variances.
The family business stay usually as long as 3 generations because of disputes, generation
gaps.
The discussions are based usually on the researches that are performed or conducted in
advanced countries. Whereas in developing countries such as India and other states it remains
like a black box; the academic scholars as well as industry scholars were actually confused
when they witnessed the breakup in the second generation of Ambani family that was one of
the largest private sector worth over US$ 20 billion. The circumstantial evidences of this
family were available to very few biographical sketches (Tripathi, 2004; Piramal, 1998) and
adviser impersonations (Dutta 1997; Sampath 2001). The study based on diversification of
family groups by Sharma and Manikutty’s (2005) is one well known research paper from
India. To be true the survival rate as well as contributing factors for family business survival
is not known properly in India. Estimating things according to the survival rate of three
generation it will be interesting to understand the fourth generation through them. It is
assumed that family business have lasted as a single body, it become very crucial to
understand the involvement of family in business and their contribution with outsiders to
manage the business.
Most business in India are primarily family business. The economic growth and expansion of
industries in Indian economy has generated employment and growth opportunities and also
certified if the resources are to the mark (Khanna, & Palepu, 1999). Some have opted for the
preservation route so that they can safeguard their money but few brave hearts have opted for
the entrepreneurial route by taking advantage of opportunities. The most important factor for
these businesses is their family and thus their main apprehension is wealth as well as their

family wellbeing (Khanna, & Palepu, 1999). From the time of economic liberalization the
predicament that they have faced is making choices amongst amalgamation of threats and
return of the business growth and preservation of wealth for the welfare of the family. This is
all joined together for attaining the goals for family and business (Chakrabarti, et al., 2008).
The study of family businesses is truly fascinating because of the conflictions and dependence
of two ecological system i.e. family and business. Key aspects through which interconnection
between family and business is determined are:planning for successor, planning for
compensation and rewards, enrolment and rewards for outsider or non-family professionals,
planning for retirement and estate, initiation and training, management structure, wealth
preservation, resolving the conflicts, visionof business, strategy and control and visionof
family (Khanna, & Palepu, 1999). From the evidences found from researches it is suggested
that the key aspects come under pressure when the entire operating environment is under
stress. There are positive effects of increased interest in corporate management system not
only on business but in family matters too by announcing professionalism in business
(Khanna, & Palepu, 1999).
2.10. Relevance to success of family business
According to Duman (1992), Paisner (1999) and Watts and (Tucker 2004) for the historical as
well as evolutionary purposes, most of the countries have family businesses that constitutes
the major category of ownership; undoubtedly there are varying estimates but still almost
75% or above are present in this case. As per Lee (2004) about 500 family business are listed
in Fortune. The family businesses are not launched for a short term goal, their main aim is to
multiply their family wealth taking proper precautions and their strategic goals also differ in
comparison to the non-family businesses (Ward, 1987; Sharma, Chrisman and Chua, 1997),
thus it has a significant contribution towards economic growth because of its long term
contribution. This fact is true for Indian economy as well.
The long term provisions of the family owned business rest on the plain survival of very
generation (Tripathi, 2004). The business families that are surviving for the past three or four
generation have a very complex structure of network, agreements, council and wealth
management structure as reported by Jaffe and Lane (2004). This is seen more in west rather
than in developing countries like India. The researchers are very much interested in this study
because of its complexity of processes and planning for succession. This interest can also be
gained because of various purposes too.

As per Churchill (1983) the transition of organization from ownership stage to a professional
driven system is not at all easy. As per Kepner 1991; Morris et al 1997; Sharma, Chrisman
and Chua 2003; there are usually an immediate procedure of revolutions taking place in
family as well as business every now and then. According to Lansberg (1999), challenges
from multiple stakeholders for gaining the leading position.
Usually there are communication problems between the parent generation and present
generation. Parent generation have no idea how to handle the challenges brought in by the
successions whereas the present generation have no idea of how to promote them. From
According to Chrisman, Chua and Sharma (1998), from American researches it was found
that the most competent of all the successors irrespective of age or sex are selected to manage
the business. This illustrates the willingness of family to convert or separate the hierarchy of
family into organizational one. But with Indian society, culture and economy this system is
not possible here. Anyways the role of post succession is not planned for creating
complications (Tripathi, 2004). This may then result in appointing a retired man to take all the
charges of businesses and its dealings. Thus an incumbent must be provided with s role of
mentoring or being a non-executive chairperson. A retired person can also opt for teaching
line. Nowadays the planning for retirement is becoming very essential because of the
increased life span of people (Sharma and Manikutty, 2005).
The business families do not pay much attention on ownership or succession issues although
they are very crucial issues. The business families do not wish to address the issues related to
successions as per Watts and Yucker (2004). Dilemma related to succession is related to
policy of the family that they have for choosing the new generation. From numerous case
studies that are taught is B-schools based on family business teaches the critical role of
conversation within family that help in developing harmony and growth. The new entry from
the family also depends upon the space available in the business that automatically depends
upon accomplishments achieved by business (Sharma and Manikutty, 2005). The
management literature teaches about strategic approach but requirement of synergizing values
based on family and business vision are not yet known. Carlock and Ward (2001) have
established tactics through which strategy making is done based on business and family. The
other major concern is developing a supportable mechanism for ownership of business that

lead to fair distribution of wealth and avoid break up (Paisner, 1999). The idea of Paisner
regarding trust is really very good but it still requires empirical validations.
Bond between families are developed by its vision, values and emotional bondages. It is
known fact that family have their social role that they have to fulfil and conduct certain
responsibilities related to community development through charities (Gallo, 2004 and Grant
Thornton, 2001). Here 5 family businesses are studied and surveyed in which it was found
that the families have their own independent entities for charity that is run usually by the
female member of the house. This way they also give recognition to the lady of the family
who has no involvement in business (Dutta, 1997). In family business the daughter in law is
not given any preferences whereas daughter have to go to their own in laws house. But in
today scenario we see a lot of changes taking place here (Sharma and Manikutty, 2005).
The capabilities of organizations influence the survival and growth competitiveness that flow
directly in family from the properties that are appointed from outside. Requirement of hiring
outsiders in a family business is well known (Dutta, 1997). Although there are conflicts in
providing responsibilities to these professionals. To justify the importance of the relationship
with nonfamily managers, you are also provided with the agency theory. According to
Williamson 1975, Eisenhardt 1989, conflicts arises between outsiders and family of the
owners.
According to Ghoshal the response of manager conduct depends upon situations, on actions
like self-centred mangers or partnership with principle based on emotion. The studies convey
that the relationship of businesses is not entirely classical principal-agent type according to
Tripati (2004) and Karanjit (1997). In family businesses there is bond because of love and
respect for each other. This fact can in itself make the business rule the market for the other
generation as well particularly when there is curiosity of finding whether the non-family
employees are loyal towards the company or not. The major area of concern here is the
success of the family business so that it can be known all over the places. Everything here is
interrelated amongst planning for successor planning and resolution of conflicts that may arise
because of it (Dutta, 1997).
2.11. Trends in Kerala’s Family Businesses
Kerala is home to a large number of family businesses, especially small and medium scale
businesses. These businesses have been doing their businesses in traditional way but they
have started realising the need to adapt their businesses in accordance with the recent

globalisations trends in order to give further growth to their businesses (Sampath, 2001).
Majority of the businesses lack the capital required to fuel the growth and in order to be able
to pace up their growth maximisation strategies, they have started adopting dilution as a
strategy (Economic Times, 2013). A large number of family businesses have started showing
their interests in the dilution process. The family firms that had limited their operation in the
state have started expanding their operations pan India (Economic Times, 2013). Some of the
family businesses have even started inking strategic tie-ups with leading global players in
order to give requisite growth to the business (Sampath, 2001).
Confederation of Indian Industry (CII) is the major government body that looks into the
matter of family businesses and ensure the growth they are striving for. In 2013, the body
selected 10 firms to offer them mentoring services to help them grow. The family businesses
in Kerala have some unique challenges which limits their growth. These family businesses are
obliged to follow the traditional ways of doing businesses (New Indian Express, 2013). Due
to global slowdown, India has emerged as a lucrative market for the growth of many MNCs
which poses a great threat to the local small and medium family businesses (New Indian
Express, 2013). The second and third generation of the family businesses have started
realising the need to make the drastic changes to the ways of doing their business in order to
sustain. The successors of these businesses follow the market trend and are ambitious to
expand their business and make it a big affair (Chakrabarti, et al., 2008).
Succession is going to be the key issue of the Kerala family businesses. There is a need to
have a good inheritance management in place and the owner and the family need to support in
the succession planning as it is not possible to appoint a successor. The strength of inheritor
or successor is an important factor in succession planning. However, higher strength of the
successor can have certain negative impact (PWC, 2013).
Professionalization of family businesses is key consideration of the family businesses in
Kerala. Professionalization is somehow linked with the successor of the family business.
Family firms in Kerala are aware of the importance of professionalization and they want to
put their step forward towards professionalization from their traditional way of doing business
(Economic Times, 2013). This is the reason why an increasing number of successors in
Kerala are receiving their education from western colleges and universities. The owners
believe that the education from the advanced countries will bring in new perspectives and

professionalization which will ultimately push their business forward (New Indian Express,
2013).
In addition, the family firms in Kerala have started leveraging control to professionals who
are out of the family (New Indian Express, 2013). Traditionally, the control of the business
limited to the owner and family. With the changing business scenario, they have realised the
importance of professional decision-making by doing a brain-storming rather than taking
decisions on their own. The decisions based on opinions of many people are more likely to
work (Economic Times, 2013).

3. Research Methodology
3.1 Introduction
Research methodology is the process being adopted to collect information and data for the
purpose of making empirical analysis. The research methodology has been discussed here so
that the readers can get an idea as to how the research has been carried out. In the manner a
research is carried out also determines how valid the research is. This chapter discusses a
different methodology which has been adopted for data collection and analysis. This research
will involve both primary and secondary research and thus the chapter will discuss data
collection and analysis strategies for both. This chapter gives a consensus to readers on how
the study has been conducted and what its validity is.
3.2. Research Philosophy
While carrying out a social or academic research, it is crucial to consider different
philosophical paradigms and matters of epistemology and ontology. These parameters tend to
describe the beliefs, perceptions, nature, and assumptions of truth and reality, and they can
impact on the way the research is being carried out. As per Blaikie (2000), the different
philosophical approaches are series of choices which a researcher must choose in order to
show alignment.
Whilst James and Vinnicombe (2002) caution that we all have inherent preferences that are
likely to shape our research designs, Blaikie (2000) describes these aspects as part of a series
of choices that the researcher must consider and he shows the alignment that must connect
these choices back to the original Research Problem. If this is not achieved, methods
incompatible with the researcher’s stance may be adopted with the result that the final work
will be undermined through lack of coherence. There are three research paradigms as under:
Positivism:The philosophy is derived from natural science and it is based on hypothesis
testing. The researcher formulates a hypothesis which he tests based on the findings.
According to this paradigm, the social world exists externally and objectively and the
knowledge is valid if it is based on observations. It is based on truth, validity, and value of the
reason, and therefore the researcher is required to mainly focus on direct observations,
surveys, experiments or any other statistical analysis (McMillan, & Schumacher, 2014).

Interpretivism:Quite contrary to positivism, this paradigm believes that the knowledge is not
separate from what the researcher already knows. Therefore, the researcher is not restricted to
the empirical findings, but he/she can give own reviews and opinions based on their
experiences and knowledge (McMillan, & Schumacher, 2014). In the underlying research,
this paradigm has been adopted.
Realism:Realism seeks to strike balance between positivism and interpretivism. It finds that
positivism is over-deterministic and interpretivism is completely relativist. It believes that
human knowledge is based on social conditioning (McMillan, & Schumacher, 2014).
3.3. Research Approach
Deductive approach goes along with positivism philosophy. In contrast with positivism,
interpretivism makes use of inductive procedure that mostly contradicts the procedure of
deductive approach. In realism approach both deductive as well as inductive procedure are
used (Ary, et al., 2013). In this research, interpretivism has been utilized and in this case
inductive approach is best suited. The researcher will start up with some observations as well
as procedure from which he can surely find the re-occurrences or formulative hypothesis that
altogether help in attaining proper conclusion for the research work. In inductive philosophy,
hypothesis along with research plan and strategy must be first developed and created that will
prove to be helpful in testing. The method of deductive approach is apprehensive about
making the conclusion. As per the researches it is found that inductive approach is widely
acknowledged than deductive approach (Ary, et al., 2013).
3.4. Research Purpose
The underlying research aims to assess as to how family businesses in Kerala can expand and
grow. Exploratory approach is considered best when compared with other approaches because
it assists in understanding and selecting the best technique of information gathering and style
of analysis. This type of analytical approach helps in finding several results carefully.
Normally, it is indicated that the problems that are predicted by exploratory analysis may or
may not exist. The research, based on explanatory approach is casual that answers for simple
question like ‘why’ and ‘how’. It actually provides a complete or holistic analysis for the
entire research (Lichtman, 2012).

3.5. Research Method
A good research makes use of both qualitative and quantitative approach. As per Breg & Lune
(2004), quantitative technique gathers complete information based on realistic analysis; it
helps during the decision-making phase by answering our queries like ‘why’, ‘how’, ‘when’,
‘what’ and ‘where’. The qualitative technique suggests about when the research took place
and the conclusion from them just prepositions. Thus, instead of choosing any one of them, I
have opted for both the techniques (Lichtman, 2012).
It is very important to understand that there is no perfect method or techniques for finding a
perfect answer. Each and every method had its own limits. Qualitative approach is subjective
in nature, so the researcher can add my viewpoints that may affect the research legitimacy that
cannot be considered as scientific. Research work that involves qualitative approach are
unsure of questions and thus they are ignorant about the data that must be escaped (Muijs,
2010). But with each step of research like development and evolution understanding the goal
becomes easier. Quantitative, on the other hand, is objective and unbiased in nature. It adopts
primary data that is absolutely unconditional. This is obtainable when the goal of project is
understood and properly identified. Qualitative and quantitative approach have their short
comings thus to get rid of the short coming, the researcher has opted for both the approaches
so that the limitations of these can be avoided (Joy, 2007).
3.6. Sample Selection
Sampling techniques that researchers usually adopt are probability sampling and non-
probability sampling (Joy, 2007). In this research, the researcher will be using probability
sampling technique here. In probability sampling each item gets selected for sure, which is
not in the case of non-probability sampling technique. With probability sampling, accurate
samples that indicate the population can be achieved. Business researchers adopt this
technique because it is easy and can be explained easily as well. Probability sampling
technique helps the business researchers in interpretation because of the un biasedness in
selecting for sample population. When analysed statistically it was found that this technique
may even not be correct all the times because discovering sample representing population
may not be accurate every time. For the study, the researcher will use the random sampling
method that is the probability sampling technique. The samples of the study are family
business owners in Kerala. The researcher will pick up the samples from any crowded and
famous markets in Kerala and every business owner stands a chance to be selected as a
sample for the study.

3.7. Data Collection
Data collection is the most crucial task in the study as the empirical findings are largely
dependent on how the data collection has taken place. The researcher needs to take
transparency and carefulness while collecting the data (Jarzabkowski, & Whittington, 2008).
For the survey, the researcher will prepare a questionnaire containing 15 questions related to
different aspects of the research as well as demographics. The researcher will carry out the
survey through face to face method. He will keep hard copies of the questionnaire and get
them filled with the samples of the study. The researcher will visit some popular market
places consisting mainly family businesses and request the family business owners to
complete the survey. The researcher will explain the purpose of the research first and also
inform them as to how this research can be useful for them.
For interviews, the researcher will take prior permission of the samples and fix the meeting
with them in accordance with their convenient time and place. The researcher will carry a
Smartphone with recording facility to record the conversation. The researcher will prepare a
set of semi-structured questions. The researcher will start with the prepared questions but he
will ask other questions as well when the interview unfolds. It all depends on how the
interview leads. The idea of semi-structured question is that the interview should not feel
robotic and it is directed as the rapport builds. The interview can last from 20 to 40 minutes
depending on how an interview leads.
3.8. Data Analysis
Different approaches will be followed for qualitative and quantitative data analysis. For
survey, the researcher will feed all the collected data in an MS Excel sheet. The research will
perform different analyses after feeding the data and produce charts and graphs of the findings
which will be further used in the compiled report. For interviews, the researcher will
transcribe each interview recording in an MS Word document separately. The transcribed files
will be uploaded to Weft QDA software, an open source qualitative analysis tool. The
software will produce results in the form of graphs and charts or simple quotations.
3.9. Role of the Researcher
The researchers are simply considered as an instrument who facilitates the study. The role of
the researcher becomes powerful when he is performing a quantitative research
(Jarzabkowski, & Whittington, 2008). Here the researcher gets authority of deciding the

colour, gender, traditions and socio-economic standard of the study sample. He makes sure
that the samples provided are as per the necessity. He makes it a point that the samples are
accurate that can be used by them for collection, analysis, observation and reports. In the
underlying research I have done my level best to make sure that the sample is accurate and
represents the population correctly. It provided me a great learning experience through which
I can conduct my own empirical research and will make use of my experiences and
knowledge for my future projects.
3.10. Ethical Considerations
Ethical consideration is nowadays becoming a serious problem in the field of research.
Researchers are looking out for easy methods for accessing information from others that too
without crediting them. In the current research, the researcher will follow all the ethical
guidelines and will positively support and credit the work of others if he chooses to use them
for the research work. The researcher will also deliver all the important information as it is
without any manipulations. He will not support biasness in the work at all (McMillan, &
Schumacher, 2014).
One of the ethical issues that concerns the most is plagiarism (Ary et al., 2014). Because of
the internet, people can gather information without the consent of the other people and quote
them as their own work. In the research,the researcher has taken full care of protecting the
legitimacy of research. The researcher has adopted the Harvard referencing style for the
purpose of referencing. Wherever information of other researchers are quoted, the in-text
citations have been used. In the bibliography section the complete detail of the citation is
mentioned for further investigation. There are certain information which cannot be accessed
without having permission of the owner of the information and in such a case, the permission
from him/her is taken, but for the publicly available information there is no need to take
permission of anyone (McMillan, & Schumacher, 2014).
While conducting interviews and survey, it is the responsibility of the researcher to ensure
that the personal information is only accessible to the researcher (Joy, 2007). In this research,
the research will assure the samples that their information will be safe and secure and will not
be accessed anyone apart from the researcher and the mentor. Once the research is done and
verification by the mentor is conducted, the personal information will be destroyed. The
research will not compromise the information in any manner. In addition, the researcher will

not ask any questions from the samples which is too personal and sensitive to ask, which may
hurt their sentiments.
3.11. Accessibility issues
The samples of the study are business owners in Kerala and the biggest hurdle to accessibility
is to making them agree for the research. It will be difficult for the researcher to get their time
out of their busy and hectic schedules. The problem becomes even more intense when the
researcher is carrying out the interviews. The interview will take a minimum of 30 minutes of
the respondents’ time and it will be difficult for the researcher to convince them to participate
in the study. In order to ensure that they participate, the researcher will schedule the
interviews in accordance with their convenient time and place. The researcher will be ready to
conducted interviews even after office hours so that the respondents can give a bit of their
time to the study.

4. Results
4.1. Introduction
This chapter is the presentation of the primary results. The survey has been conducted on 50
respondents and all of them have responded. They have been given out the questionnaire to
fill in and the responses have been fed in SPSS software for the analysis. The results of survey
are presented in the form of frequency tables, graphs, charts, and cross tabulations. On the
other hand, the interviews are carried out on 5 respondents. The interview is recorded using
phones and later on transcribed in MS Word. The transcripts are uploaded in Weft QDA
software and the results are presented here.
4.2. Survey Results
Looking at the age group of the participants, it is evident that majority of them are middle-
aged. The survey found that 22% of the respondents are in the age group ‘40-45’ and ’45 and
above’ respectively, 18% in ‘30-35’ and ’35-40’ respectively, 12 % in ‘25-30’ and remaining
8% in ‘20-25’ (Fig.1).
Statistics
Age Group
N
Valid 50
Missing 0
Age Group
Frequency Percent Valid Percent Cumulative
Percent
Valid
20 - 25 4 8.0 8.0 8.0
25 - 30 6 12.0 12.0 20.0
30 - 35 9 18.0 18.0 38.0
35 - 40 9 18.0 18.0 56.0
40 - 45 11 22.0 22.0 78.0
45 and Above 11 22.0 22.0 100.0
Total 50 100.0 100.0

Figure 1: Age group
The survey found that majority of the respondents are males. 84% participants were males
and remaining 16% were females (Fig.2).
Statistics
Gender
N
Valid 50
Missing 0
Gender
Percent
Valid
Female 8 16.0 16.0 16.0
Male 42 84.0 84.0 100.0
Total 50 100.0 100.0

Figure 2: Gender
The survey found that the majority of the respondents have been in business for long period of
time. 18% of the respondents have ‘15-20 years’ experience and ‘More than 25 years’
experience respectively, 16% have ’20-25 years’ experience, 28% have ’10-15 years’
experience, 14% have ‘5-10 years’ experience, and 6% have ‘0-5 years’ experience (Fig.3).
Statistics
Experience
N
Valid 50
Missing 0
Experience
Percent
Valid
0 - 5 Years 3 6.0 6.0 6.0
5 - 10 Years 7 14.0 14.0 20.0
10 - 15 Years 14 28.0 28.0 48.0
15 - 20 Years 9 18.0 18.0 66.0
20 - 25 Years 8 16.0 16.0 82.0
More than 25 Years 9 18.0 18.0 100.0
Total 50 100.0 100.0

Figure 3: Experience
With the competition looming large in every industry, the organisations are evolving
themselves to stay in the competition. The respondents also feel that they will need to evolve
in order to be in the stiff competition. 82% of the respondents felt that they need to evolve in
order to take on the competition well, while 18% felt that their current approach is suitable for
the same (Fig.4).
Do you think that you need to evolve to compete in the contemporary
business scenario?
Percent
Valid
No 9 18.0 18.0 18.0
Yes 41 82.0 82.0 100.0
Total 50 100.0 100.0
Statistics
Do you think that you need to
evolve to compete in the
contemporarybusiness scenario?
N
Valid 50
Missing 0

Figure 4: Need to change
There are a number of ways to grow a business and some of them are safer while others risky.
The ways to grow a business is adopted by business owners based on how far the owners are
willing to take risks. 25.3% respondents said that they would ‘hire modern employees’, 24.2%
said that they would put ‘more investment’, 17.9% said that they would ‘adopt modern
practices’, 16.8 said that they would ‘bring new generation on board’ and 15.8% said that they
would go for ‘merger and acquisition’ (Fig.5). The results are scattered across different ways
of growing business.
Case Summary
Cases
Valid Missing Total
N Percent N Percent N Percent
$Q6a 49 98.0% 1 2.0% 50 100.0%
a. Dichotomygroup tabulated at value 1.
$Q6 Frequencies
Responses Percent of
CasesN Percent
What are the ways to
grow your business?a
Merger and acquisition 15 15.8% 30.6%
More investment 23 24.2% 46.9%
Bringing new generation
on board
16 16.8% 32.7%

Adopt modern practices 17 17.9% 34.7%
Hire modern employees 24 25.3% 49.0%
Total 95 100.0% 193.9%
a. Dichotomygroup tabulated at value 1.
Figure 5: Ways to grow business
Adopting any method of the business growth requires investment. The money for the
investment can be ensured by cash flow, credit line, and business surplus. 28% respondents
said that they are ‘highly concerned’, 24% ‘moderately concerned’, 18% ‘not concerned’,
16% ‘extremely concerned’, and 14% ‘less concerned’ about cash flow, credit line, and
business surplus (Fig.6).
Statistics
How concerned are you that your
cash flow, creditline and
business surplus be available to
meetplans for expanding your
business?
N
Valid 50
Missing 0
How concerned are you that your cash flow, credit line and business surplus be available
to meet plans for expanding your business?

Percent
Valid
Extremely concerned 8 16.0 16.0 16.0
Highly concerned 14 28.0 28.0 44.0
Moderately concerned 12 24.0 24.0 68.0
Less concerned 7 14.0 14.0 82.0
Not concerned 9 18.0 18.0 100.0
Total 50 100.0 100.0
Figure 6: Concern about cash flow, credit line, and business surplus

Succession is one of the biggest concerns in family businesses. An effective succession
planning requires the business owners to identify a successor well in advance. 64%
respondents that their family business has already identified a successor, while 36% said that
they have not yet (Fig.7).
Statistics
Is there a family member who has
been identified as the next
business leader?
N
Valid 50
Missing 0
Is there a family member who has been identified as the next business
leader?
Percent
Valid
No 18 36.0 36.0 36.0
Yes 32 64.0 64.0 100.0
Total 50 100.0 100.0
Figure 7: Identification of successor

An effective succession planning also involves the development of heirs well in advance.
They need to learn the business practices before taking full control of the business. The
survey found that the majority of family business have not any such development plan. 66%
respondents said that they do not have any development plan for the next generation, while
34% said they have (Fig.8).
Statistics
Is there a plan or process in place
to develop the next generation?
N
Valid 50
Missing 0
Is there a plan or process in place to develop the next generation?
Percent
Valid
No 33 66.0 66.0 66.0
Yes 17 34.0 34.0 100.0
Total 50 100.0 100.0
Figure 8: Plan for development of next generation

Management consulting firms are of great help for family businesses. Many family businesses
around the world are taking the services of management consulting firms. However, there is
very less evidence of this in the context of Kerala family businesses. 76% respondents said
that they are not taking the services of any such firms, while 24% said that they are taking the
services of such firms.
Statistics
Have you ever taken the services
of a managementconsulting firm
for expansion and growth?
N
Valid 50
Missing 0
Have you ever taken the services of a management consulting firm for
expansion and growth?
Percent
Valid
No 38 76.0 76.0 76.0
Yes 12 24.0 24.0 100.0
Total 50 100.0 100.0
Figure 9: Services of management consulting firms

In order to carry out successful expansion, it is required that the family businesses evaluate
and analyse their position first. 70% of the respondents said that they have not evaluated their
business for expansion, while 30% respondents said that they have evaluated already (Fig.10).
Statistics
Have you evaluated your
business for expansion?
N
Valid 50
Missing 0
Have you evaluated your business for expansion?
Percent
Valid
No 35 70.0 70.0 70.0
Yes 15 30.0 30.0 100.0
Total 50 100.0 100.0
Figure 10: Evaluation for expansion

A strategic business plan offers guidance and direction for future growth. In order to grow
business in a professional manner, strategic business plan is a great tool. 84% respondents
said that they have not written a strategic business plan yet, while 16% said they have done so
(Fig.11).
Statistics
Have you written a strategic
business plan readyfor
expansion?
N
Valid 50
Missing 0
Have you written a strategic business plan ready for expansion?
Percent
Valid
No 42 84.0 84.0 84.0
Yes 8 16.0 16.0 100.0
Total 50 100.0 100.0
Figure 11: Strategic business plan

The respondents who said that they have a written strategic business plan were asked whether
they have communicated the same to the family members or not. 62.5% respondents said that
they have communicated it, while 37.5 said that they have not (Fig.12).
Statistics
Has this strategic plan been
communicated to family
members,staffand advisors?
N
Valid 8
Missing 42
Has this strategic plan been communicated to family members, staff and
advisors?
Percent
Valid
No 3 6.0 37.5 37.5
Yes 5 10.0 62.5 100.0
Total 8 16.0 100.0
Missing System 42 84.0
Total 50 100.0
Figure 12: Communication of strategic business plan

A professional organisation has a hierarchy and the family businesses need to leverage control
from the owner and authorise others in the hierarchy to make decisions. 54% of the
respondents said that they have leveraged control, while 46% said that they have not (Fig.13).
Statistics
Are you ready to make structural
changes and leverage a bit of
control to the employees?
N
Valid 50
Missing 0
Are you ready to make structural changes and leverage a bit of control to
the employees?
Percent
Valid
No 23 46.0 46.0 46.0
Yes 27 54.0 54.0 100.0
Total 50 100.0 100.0
Figure 13: Leveraging control

Growth of a family business may be dependent on their willingness to take risks. Unless they
make investments, it is unlikely that there will be any growth. 32% said that they are willing
to take ‘less risk’, 20% said ‘moderate’, 18% said ‘high risk’, 16% said ‘no risk’, and 14%
said ‘extreme risk’ (Fig.14).
Statistics
To what extent you are able to
take risks for business?
N
Valid 50
Missing 0
To what extent you are able to take risks for business?
Percent
Valid
Extreme risk 7 14.0 14.0 14.0
High risk 9 18.0 18.0 32.0
Moderate risk 10 20.0 20.0 52.0
Less risk 16 32.0 32.0 84.0
No risk 8 16.0 16.0 100.0
Total 50 100.0 100.0
Figure 14: Willingness to take risks

There is a close relationship between age and risk-taking. On doing a cross analysis, it was
found that the respondents of younger age are more willing to take risks, while the
respondents in older age like to play safe in their business (Fig.15).
Case Processing Summary
Cases
Valid Missing Total
N Percent N Percent N Percent
Age Group * To whatextent
you are able to take risks for
business?
50 100.0% 0 0.0% 50 100.0%
Age Group * To what extent you are able to take risks for business? Crosstabulation
Count
To what extent you are able to take risks for business? Total
Extreme risk High risk Moderate risk Less risk No risk
Age Group
20 – 25 4 0 0 0 0 4
25 - 30 3 1 0 1 1 6
30 - 35 0 7 1 0 1 9
35 - 40 0 0 7 2 0 9
40 - 45 0 1 1 9 0 11
45 and Above 0 0 1 4 6 11
Total 7 9 10 16 8 50

Figure 15: Age-risk correlation
There is also a relationship between gender and risk taking. The analysis show that males are
more risk-takers compared to females (Fig.16).

Figure 16: Extent of risk
The respondents with less experience are more likely to adopt an approach which is modern
and involves higher risks. On the other hand, the respondents with high experience are more
likely to adopt growth approach which is old and involves low risks (Fig.17).

Figure 17: Experience and approach to growth
The analysis shows the respondents of younger age rely more on management consulting
firms, while the older respondents have not taken the services of these (Fig.18).

Figure 18: Age and management consulting firms

5. Discussion
Family business in India has not a longstanding history because the full-fledged
industrialisation startedvery late compared to the Western countries. The findings of the study
also shows that only a small percentage of the respondents have been in business for more
than twenty five years. In addition,the Indian society has been male-dominated and it can be
seen in the family business culture. The underlying study also conforms to it as a huge
majority of the respondents are males. This certainly has an impact on the family business
culture in the country.
Looking at the current state of Indian family businesses which still lag behind their European
counterparts in professionalism, there is a need to great transformation so that they are able to
compete in the dynamic and ever-evolving business scenario. The globalisation and entrance
of Western organisations in India have also forced the local family businesses to change their
business processes to compete with them. They face stiff competition from the highly
professional Western organisations and strive to make the requisite changes in order to
become more professionals. The findings from the study also suggest thatmajority of the
respondents believe that there is a need to change.
Majority of the businesses are small-scale and they are facing with financing issue. Due to
their traditional approach towards financing they are not eager to get funds from risky options
which can potentially hamper their growth plan. Moreover, the respondents are found to be
reluctant towards adopting modern approaches of businesses growth, especially the
respondents falling in older groups. The younger generations are showing more confidence in
modern approaches. Despite having financial issues, the new generation is highly capable of
arranging funds from different sources. They can take loans from banks or pitch their business
plans to the investors and pursue them to invest money on the new venture. The finance is key
for opening new business of expansion.
Having a succession plan ready in advance is important because it is crucial in the long-run.
Generation gap between the family members of the family business is a major concern
nowadays (Getz, & Carlsen, 2005). The founder of the business has done things by himself all

his life thus he is used to do thing his own way (Wilkinson, 1996). The unique culture found
today in the family businesses in India are: Narrow-minded, owner centric, less important
scale, with a controlled perception, and traditional way of thinking (Ahlstrom, et al., 2004).
The best part is that majority of the organisations have identified their successor. This makes
it easier for the businesses to impart skills and knowledge to the successor and prepare them
for practical business when the take over the business. There may be a generation gap
between the business owner and successor, yet the business owners can transfer certain values
which can be carried forward in the long-run. The findings of the study suggests that majority
of the business owners have not identified the successor of the business. This will drastically
impact on the succession. In such a scenario, it is likely that the conflicts will take place over
who will be the successor. This reiterates on the need of have a succession planning ready in
advance and provide the successor with necessary training so that they can effectively take
over the business.
Before expanding the business, it is requisite to evaluate the business and take the services of
consultants. Majority of the respondents have not evaluated their business for expansion
which will drastically impact on the expansion. Furthermore, a very few number of business
owners have taken the services of management consulting firms. Such firms are professionals
in this field and they can provide them with some insight on how to grow their business based
on the analysis. They can also provide them with the strategic business plans which gives
strategic directions for expansion and the cost and time are defined well in advance, which
facilitates the owners to arrange the sufficient funds required for the expansion.
Family businesses generally follow a flat structure and it is also evident in the case of the
Kerala family businesses. However, they need to create hierarchy and facilitate the managers
to take strategic decisions. These managers are highly qualified, experienced, and skilled and
are able to take right decisions. The business managers need to leverage controls and put trust
on their managers. Moreover, they are required to take some risky decisions in the business if
they want to achieve high growth rate. Without taking risks, it is not possible to grow
exponentially. It is observed from the findings that the business owner falling in younger
generation are more likely to take risky business decisions and methods to growth the

business, while their older counterparts show their reluctance in this regard. Furthermore, the
males are more likely to take more risks compared to females.

6. Conclusion
6.1. Introduction
This chapter will discuss as to how the research has been able to fulfil the objectives set aside
in the beginning. Based on the findings and problems faced by family businesses in Kerala,
the chapter will also give certain recommendations to business owners in Kerala in order to
grow their business further. Moreover, the paper will discuss the limitations of the study.
Lastly the chapter will discuss the managerial and research implications of this study.
6.2. Meeting Objectives
A successful research paper is the one that fulfils the research objectives set aside in the
beginning of the research. The underlying paper has been able to fulfil its objectives which it
set in the beginning of the research. The first objective of the paper was to assess the trends
and practices of the family business in Kerala. The study finds that the people new in the
businesses are more likely to take risky decisions and adopt modern practices in order to
growth their businesses. There has been stiff competition in the local market due to the
existence of global businesses. In order to succeed in such a scenario, majority of the family
businesses are evolving to compete. However, there are only few of them that have applied
modern and effective methods to grow their business.
The second objective of the research was to find out different challenges and opportunities
family businesses have to expand and grow.The research found that there are a large number
of business owners who are not ready to leverage their control. They have limited the
decision-making to themselves which may not be open to suggestions or feedback, creating a
roadblock for growth. Also, majority of the businesses have not taken the services of
management consulting firms, evaluated their business, created strategic business expansion
plan, or willing to take risks. All these factors create potential roadblocks for the businesses.
6.3. Recommendations
Based on the findings of the study, the following recommendations can be given to the family
businesses in Kerala:
 They should adopt a hierarchical organisational structure and leverage the
decision-making power to many managers. They can keep the final decisions

on strategic issues for themselves. In that scenario also, they need to consult
other employees and critically evaluate different alternatives available.
 They should identify the successor of the business based on mutual agreement
of the family members and transfer requisite skills and knowledge to them so
that they are completely aware of the business processes once they take over
the business. In case of any conflict over the successor, they should sort it out
well in advance in order to avoid any chaos at the time of succession.
 They should evaluate their position before making any expansion decision. It is
recommended that they take the services of management consulting firms that
will help in successful expansion and growth.
 Prior to make expansion, the business owners are required to prepare a
strategic business plan to give direction to the expansion. They can take the
services of professionals for creating business plan for expansion.
 In order to grow further, it is requisite that the business owners are willing to
take more risks. They should adopt modern and risky expansion methods in
order to grow exponentially. They can choose to adopt less risky options if
they want to have moderate growth with low risk, but they should make sure
that they are modern approaches and widely used by professional
organisations.
6.4. Research limitations
Apart from the benefits, the research has certain unavoidable limitations which has potential
to affect the overall findings and the relevance of the research. The study is carried out for an
academic purpose, hence there is a budget and time limitations. Looking at the nature of the
research, it is evident that it requires longitudinal study, but the research is for academic
purpose and needs to be completed within a very limited time. The research is scheduled to be
carried out within a period of eight weeks and looking at the vastness of the research, it does
not look to be sufficient. In such kinds of survey, a lot of time and budget is required to
collect responses from optimal number of customers. A research is considered to be more
valid if it has a large number of respondents.
Furthermore, the research involves only 50respondents from a particular geographical spread,
and on the basis of this it would not be valid to generalise for the overall family businesses in
India. The researcher will require to responses of thousands of the family business owner to

be collected utilising different tools. The topic of the research is broad, but the limited number
of respondents does not allow to generalise the results to a great extent.
6.5. Future Scope
The underlying study can provide good insight for the future researcher studying the impact
of visual merchandising in a retail setting. The empirical evidences may not be worthy of
generalisation due to the constraints of samples, but they can get valuable information about
the topic from this study. There is a need to carry out a longitudinal study in order to verify it.
Furthermore, the managers can get an insight out of the study and utilise in their retail store to
capitalise upon visual merchandising to pull in more customers and influence their purchase
decisions.

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