Comments
Consulting firm McKinsey is looking to offer in India its knowledge and expertise in family businesses.
Heinz-Peter Elstrodt, Global Leader, Family Business Practice, McKinsey & Co, was in Chennai recently to meet family-run businesses. He had in the past met such businesses in Delhi and Mumbai to understand the Indian context.
A veteran at McKinsey, Elstrodt works with leading family businesses in Latin America, Europe and Asia, helping them transform into professionally run enterprises.
In Elstrodt’s view, though India has several old companies, many of them are younger (first and second-generation) compared to those in Europe, US, South-East Asia and Latin America, which have many third and fourth-generation companies. “Indian companies now have to figure out how they want to govern themselves to make themselves sustainable beyond the founders,” said Eltrodt in an interview with Business Line.
Very few family-owned companies thrive beyond the third generation. Those that do find ways to run themselves professionally while making the family happy. Companies that have survived over generations are also the ones that have dared to enter new growth markets and businesses over time. The importance of family-run business has grown enormously in recent times, especially due to the growth in the emerging markets, including India and Brazil, where many of the private sector companies are family-owned. There is a lot more research on family business today by research firms such as McKinsey and others.
McKinsey hopes to offer its expertise in long-term sustainability, family and corporate governance issues, shareholding and succession planning, he said. Says Ramesh Mangaleswaran, Director, McKinsey & Co, “This is a topic that is beginning to be of interest to our clients in India, though we haven’t done any specific research on India so far. At this point, a lot of the discussion is around family and business, where do they interact, where do they separate.”
In a research paper ‘Keeping the Family in Business,’ Elstrodt says in emerging markets such as South Korea and Latin America, companies that started out as small family-owned businesses, have become a major force in their economies.
swetha.kannan@thehindu.co.in
raja.simhan@thehindu.co.in
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.