Where Do We Go from Here? CASE STUDY SOLUTION

 Where Do We Go from Here? CASE STUDY SOLUTION

Where Do We Go from Here?

As one of the many seminars held to discuss the corporate response of family-owned business to liberalisation and globalisation, the keynote Mr Gurcharan Das concluded his speech by saying, “In the end, I would say that the success of Indian economy would depend on how the Indian industry and business respond to the reform process.”

As the proceedings of the seminar progressed it became clear that there was a difference of opinion in the perception of participants. Those who were supporting the case for letting the family-owned businesses face competition opined that such businesses in India have exhibited financial acumen; its members have generally adopted an austere life style; they have demonstrated an ability to take calculated risks, and an ability to accumulate and manage capital. They have devised unique managerial style and led the creation of the equity cult among Indians. Several of them are low-cost producers.

The participants critical of the role of family business had this is to say: “There has been a tendency to mix up family’s intent with that of businesses managed by them. There is a lack of focus and business strategy. Family businesses have generally adopted a short-term approach to business causing less purposeful investments in specially critical areas such as employee development and product development. Customers and development of marketing skills have been neglected.”

The valedictory session of the Seminar attempted to bring out the issues clearly. It culminated in an agenda for reform by the family businesses. The points highlighted in the agenda are:

1. Indian family-owned business organisations need to professionalise management,

2. they need to curtail the diversified of their business groups and impart a sharper focus to their business activities, and

3. they need to pay greater attention to the development of human capital.

Question

Suppose you were an observer at the seminar. During tea and lunch breaks you had an occasion to meet several people who were skeptical and felt that the reform process was having only a superficial impact on the corporates. Express your opinion that you form about the issues at the seminar.