Role Of Stakeholders In Family Business

Introduction The Family firm has been important features of the business landscape for centuries and remains important today. They can be small, medium or large and has been seen in all sectors and in all three industrial revolutions. Throughout they have played the main role in employment, income generation and wealth accumulation. A family business can be defined as “a corporation that is entirely owned and managed by members of single family”. The family business is ideal in nature as they are loyal to the principles of the founder and thus ensure uniformity in their operations. Unlike any other form of firms ,even family firms also have stakeholders .Stakeholders are creditors, family members, debtors who play a key role in the day to

These stakeholders involve the family members that have an investment in the business, such as parents and siblings including those who have an investment in the business but they have not involved actively in the business known as the non- active stakeholders. The action of all these stakeholders will have a direct or indirect impact on the success or failure of the business.

Succession in Family business

1. First family succession plan, then the business succession plan: Family firm plan must be recognize and accommodate the needs, goals and objectives of the each individual in family. The family of succession plan has to be developed first as if the business plan is created in advance so it proves to be hard for the owner to organize the goals of the family members towards the company.

Family business plan should include following dimensions

 Strategies to put business enthusiasm in the front of family-owned firm.

 Emphasis justifying over the family

From above discussion we can find out that succession is the challenging phase which many families come across and many family firms fail because of the improper plan in the time of succession planning. As we have discussed about the different stakeholders and the important role played by them in family firms we can say that the succession planning is not easy to make without satisfying their needs. In this paper as we have seen the many major challenges and issues which is faced by the family firms during the succession process and it only can solved by the cooperation of stakeholders as they play a key role in the business. For successful in the long run family firm should start the succession process before hand only which will guide the business to create the roadmap of success. Another factor which would help in succession plan is involving the female in the family firm because they help in keeping pack together. Where brothers often put their egos before everything and which lead to fights in business as we have in the case of Amabni’s brothers. Family firms should also consider the formal rules on whom they will appoint the business next ,whom to promote and the business transferring to next generation are capable of the business or not. If family firms mange these key points proper in the succession process which will have positive impact on the business and the transferring business