Вы находитесь на странице: 1из 22

Asia Pac J Manag (2013) 30:769789

DOI 10.1007/s10490-013-9342-z

Transgenerational succession in business groups in India

Anand Saxena

Published online: 30 January 2013

# Springer Science+Business Media New York 2013

Abstract This article examines succession-related issues in business groups in India,

where they comprise a species of the genus of family business and account for a
sizable proportion of the economy. It notes that succession in business groups in India
has frequently entailed family feuds and business splits whose effects are not limited
to the concerned family alone. Given the enormity of economic and political power of
these groups, succession-related issues therein pose serious credit- and governancerelated risks. Conventionally, in family business literature, stand-alone firms are the
unit of analysis for examining issues pertaining to transgenerational succession.
Moreover, most studies have done so within the parameters of a psychoanalytic
framework that focuses on the psychology of the incumbent and the successor and
their relationships with other members of the family and stakeholders of the firm.
This article argues that such a restrictive approach would not suffice in the case of
business groups. It acknowledges the emergence and continuance of business groups
in the broader context of historical, economic, political, and sociological circumstances of their respective settings. It then extends the psychoanalytic framework and
proposes an eclectic and integrative framework for examining succession-related
issues in business groups. This article illustrates the use of the framework with
reference to the saga of transgenerational succession in business groups in India.
Keywords Business groups . Succession
Transgenerational succession and inheritance of business are universal episodes in
family businesses that last long enough. While smooth and competent succession is
desirable in all the businessesbig or smallsuch a requirement is an absolute
The author is grateful to the anonymous reviewers and the editors of the Special Issue for their comments
and valuable suggestions on an earlier draft and the presentation at the APJM Special Issue conference at
Beijing during July 8-9, 2011.
A. Saxena (*)
Deen Dayal Upadhyaya College, University of Delhi, Delhi, India
e-mail: anand040564@yahoo.com


A. Saxena

imperative in the case of business groups in view of their enormous economic power.
Business groups indeed dominate the economic space in most of the Asian economies. Their dominance has been both eulogized and criticized in academic literature.
On the one hand, business groups have been said to be behind the spectacular
economic performance of these economies. On the other hand, the moral hazards
associated with their complex ownership structure, opaqueness of their functioning,
and their vested interest in promoting and perpetuating family capitalism and crony
capitalism have been held responsible for the Asian crisis of the 1990s (Chatterjee &
Nankervis, 2007).
In such a scenario, should the issue of transgenerational succession in these groups
be regarded as a family matter or a matter having ramifications beyond family? The
implications of this question may be better understood with reference to a succession
episode involving the Reliance Group, Indias largest business house accounting for
nearly 23 % of the gross domestic product of the worlds sixth largest economy
(Indian Express, 2009). Dhirubhai Ambani, the founder of the Reliance Group, died
intestate, that is, without a will or testament of succession. Thus, he left behind a
business empire whose succession became a matter of dispute between his two sons,
Mukesh Ambani and Anil Ambani. Mukesh Ambani, the elder of the two, tried to
trivialize the issue as their familys internal matter. However, the analysts and
commentators chose to disagree. The issue was referred to as a psychological soap
opera of sibling rivalry indicative of the soft underbelly of familial capitalism and
the changing ethos of the Indian family system at one place (Das, 2004). The
honorable Supreme Court of India stated it as analogous to a war between nations
(Deccan Chronicle, 2009). Succession-related squabble at Reliance was reported as
having implications for Asias energy needs by the international press (Bangkok Post,
2009). This case adequately shows that the implications of the succession of business
ownership, leadership, and control are more far-reaching than belonging exclusively
to the private domain of the family.

Rationale and objectives

Credit- and governance-related risks of poor succession planning in business groups in
India provide the primary rationale for the present article. The magnitude of the risks,
naturally, would vary directly with the economic power of the group experiencing
succession-related problems. In India, family-owned and -controlled business houses
have, in the past, been recognized as a source of concentration of economic power.
These continue to be dominant players in the economy. The publicly listed companies of
just about 11 Indian business houses were reported as having a combined market
capitalization of about US$300 billion, making up nearly 30 % of Indias total market
capitalization in 2008 (Dutta & Dutta, 2008). Given that these companies would have
access to diverse sources of funds, including debt from financial institutions and
presuming family holdings of about 50 % and a conservative debt-to-equity ratio of .5
(i.e., equity is twice the debt), it should not be difficult to assess the impact of the
ownership structure and changes therein on the financial markets, institutions, and the
stability and well-being of the overall economic system. In fact, a report by Moodys
Investment Information and Credit Rating Agency (ICRA) (2007) on corporate

Transgenerational succession in business groups in India


governance and related credit issues for Indian family-controlled enterprises noted that
leadership transition/business succession to the next generation is a key credit- and
governance-related risk with most of the Indian business houses.
The rationale of the study also lies in the perceptible gap of research and understanding about (1) Indian business groups whose emergence and subsequent dominance of the economic space of the country is attributable to a set of unique
sociocultural, political, and economic circumstances, and (2) the dynamics of transgenerational succession of ownership, leadership, management, and control of these
In accordance with the rationale of the study, this article aims to show that a broad
framework is needed and illustrate how this framework can help understand transgenerational succession in Indian family groups. In the following section, we will
review key concepts and the succession literature in the context of Indian family
groups. Such review shall explain why an eclectic framework that goes beyond what
we called the psychoanalytic perspective is useful. The framework will be introduced
and then applied to explain the saga of succession in Indian business houses since
independence (1947). Lastly, we state the agenda for further research taking advantage of the eclectic framework.

Business succession and business group in the Indian context

Etymologically the word succession comes from the Latin word successionem meaning a following after, a coming into anothers place. In widely held corporations, it
is possible for leadership and management succession to be independent of ownership
and control, for example, chief executive officer (CEO) succession. In family business as a genus and business groups as a species, succession might entail transfer of
ownership as well as of control and management. Indian business housesold as
well as newtypify family ownership- and control-driven business groups having
large empires. Thus, succession in Indian business houses and family-controlled
groups implies intergenerational transfer of ownership, control, and management of
business. Such a preference among the incumbents of the family businesses to hand
over their businesses to their offspring or close family members is generally relegated
to the propensity of family firms toward nepotism (Barach, Gantisky, Carlson, &
Doochin, 1988; Beckhard & Dyer, 1983a, b). However, there also have been views
that such a recourse may be rational and efficient, more so when the competitive
advantages of a firm are based in idiosyncratic knowledge that can be efficiently
transferred only to family members or the most-trusted outsiders (Burkart, Panunzi, &
Shleifer, 2003; Lee, Lim, & Lim, 2003; Sharma, 2004).
In the case of business groups, this idiosyncratic knowledge might pertain to
complex ownership structures and business groups contacts and relationships.
Saxena (2005) noted that carrying on and handing over the tradition of business in
ones family or community may be culturally internalized as ones duty. An obligation to preserve wealth for the next generation is also implicit in the guanxi practices
of the Chinese (Chen, Friedman, Yu, & Sun, 2011). Such a tendency, however, may
be responsible for conflict between interests of the shareholders in the controlling
family and other shareholders and for the abuse of private information available to the


A. Saxena

family members by virtue of direct participation in management (Filatotchev, Zhang,

& Piesse, 2011). Notwithstanding the findings of Jiang and Peng (2011a) in support
of conflicting hypotheses pertaining to the governance and performance of family
businessesthat is, whether they are good, bad, or irrelevantthe issue of transgenerational succession in family firms retains its merit nevertheless.
Business groups represent a form of economic organization characterized by an
agglomeration of firms engaged in diverse businesses under a centralized, concentrated, and closely held ownership and control (Cazurra, 2006; Granovetter, 1994;
Mazumdar, 2008; Peng & Delios, 2006). They are typically said to be lying somewhere between firm and market (Powell, 1990). Firms within the business groups
share productive resources, and this resource sharing is governed by mechanisms
other than markets (Penrose, 1959). Depending on their ownership type, this coordination mechanism might vest with the family, state, or representatives of absentee
owners. In this regard, business groups may be distinguished from other forms of
economic organization also on the criteria of particularistic ties of family, kinship, and
ethnic linkages (Luo & Chung, 2005; Stewart, 2003). Business groups are ubiquitous
in emerging economies and even in some developed economies (Khanna & Yafeh,
2007). Business groups are also particularly prevalent in transitional market economies such as China, Russia, and Vietnam (Carney, 2008).
In India, business groups are better known as business houses, even though while
describing business groups in India, perhaps for the first time ever, Hazari (1966)
preferred to use the term corporate groups, implying a common authority over several
corporate units. The common authority implied in Hazaris work includes the family
or the managing agents/representatives of absentee owners (British masters). Since
the abolition of the managing agency system after independence in 1947, business
groups in India came to be characterized only by concentrated ownership, governance, management, and control by family whose succession is the subject matter of
this article.

A focused review of literature

There is a sizable body of research on succession in family businesses. However,
whether in India or elsewhere, research on succession in business groups is scant.
Two observations are clear to us in a focused review of the literature. As shown
in Table 1, much of the research rests on the premise of the conflicts inherent in
the differences between business and family ecosystems. It accordingly focuses
on how the personality characteristics of the incumbent and the successor, the
nature of their relationships, and their interactions with the various stakeholders
in business and in family might have a bearing on the succession process and its
effectiveness. The developed economies of the West comprise the context in most
of the cases. Family-controlled business groups as an organizational form are not
much prevalent in the West. The unit of analysis of these studies, therefore, is
predominantly a stand-alone firm.
Another distinct aspect of the research on business succession reviewed in Table 1
has been a near-absolute reliance on psychoanalytic and economic factors in explaining the succession in family business. These studies miss out on the historical

Attitudes depend on the type of incumbent: Monarch fails to plan; General retires but plots the return;
Ambassador delegates; Governor sets the exit date and openly pursues it; Inventor is eager to exit;
Transition Czar actively pursues succession planning.

Chung et al. (2007); Handler (1990);

Kepner (1983); Kets de Vries (1993)

Saxena (2005)

Poza (2004)

Psychology: willingness
to relinquish control

Psychology: attitude toward

succession planning

Successors may belong to family business in-group or out-group or they might just be the jugglers.

Style of business



Taylor et al. (1998)

Lansberg (1999)

Fox & Hamilton (1996)

Incumbentsuccessor relationship

Grote (2003)

Birley (1986); Birley et al. (1999)

Psychology: role conflict

Fox & Hamilton (1996)

Extent of involvement in
family business

Conservator or Expander. Four pairings possibletwo like pairings and two opposite pairings.

Intergenerational conversations smooth out the succession process.

The similarities and differences between the perceptions of the incumbent and the successor (as regards
integrating family and business matters, the maintenance or changing the status quo, etc.) can have a lot
of bearing on the succession process.

They desire to be like the incumbent yet also to supersede him or her; they must imitate the incumbent
while seeking independence.

The other principal actor, albeit less researched one.

Successorbusiness relationship becomes another vital component of the succession process.

Stavrou (1999)

Marisetty et al. (2008)

Role in succession

Demographic factors affected the offspring intentions to join business.

Willingness and preparedness of the incumbent to hand over the baton is critical to succession.

Psychological processes are at the core of the incumbent preparedness for business succession.


Successor characteristics

Incumbent attitudes may lie anywhere between business will find its own successor to plan and train a

Grote (2003)

Psychology: importance

Succession planning a direct function of age of the incumbent.

Dunemann & Barrett (2004)

Demographics: age

Incumbent leaders of the family wield considerable control over the process of succession.

Main finding

Sharma et al. (2003)


Role in succession

Incumbent characteristics

Theme(s) and subtheme(s)

Table 1 Research on succession in family business

Transgenerational succession in business groups in India


Bjuggren & Sund (2001)

Linkage between business

and family life cycles

Dunemann & Barrett (2004)

Qi (2009)

White et al. (1997)

Qi (2009)

Survival of the firm


Cost of wrong succession

Meijaard & Uhlaner (2005)

Types of outcomes

Loss of productivity and social costs in the United States nearly $14 billion per year.

Succession often accompanied by strategic change.

Sound succession ensures organizational survival and continuity.

Three types of outcomes: survival and continuity; change in subjective satisfaction of the stakeholders; and
change in objective measures of sales, profitability, and share price movement.

Linear recruitment (i.e., announcing the heir apparent during the tenure of the incumbent) is a far effective

Succession outcomes

Three types: relay succession, horse race, and succession from outside.

Zhang & Rajagopalan (2006)

Saxena et al. (2011)


Most family business owners are aware of the need for succession planning, yet they do not actively plan.

Business growth and family growth can feed on each other.

Lamont (2010);
Smyrinos et al. (1997)

Jain (2006)

Managerial motives impact succession process via agency relationship.

If any family member cultivates exclusive relationship with firms suppliers or customers, it can complicate the
succession process.

Progress with succession tasks was more evident when the life cycle stages in the family, business, and
ownership subsystems were congruent.

Family adaptability, family cohesion, successor training, the familys commitment, and the quality of owner
manager and successor relationships exert mediating influence.

Main finding

Awareness of the need

Succession process


Business growth

Dependence on professional Chua et al. (2003)


Personalized or shared

Relationship with businesss other stakeholders

Pieper (2007)


Influence of family
relationships on

Family ecosystem

Theme(s) and subtheme(s)

Table 1 (continued)

A. Saxena

Transgenerational succession in business groups in India


narrative and institutional aspects of succession. We believe that the development of

an eclectic perspective on succession is a must in the case of business groups, which
themselves are the product of economic, sociocultural, political, and historical influences in their respective settings.
In India, one does not come across much research either on business groups or on
succession therein. There are biographical and historical studies on prominent business families (Piramal, 1996, 1998; Tripathi, 1999). However, the focus on the issue
of succession has been relatively conspicuous by its absence. Interest in succession
has been rather episodic. It has been limited to a symptomatic treatment of the subject
whenever a prominent business family experienced difficulties in succession.
Ramachandran (2005) explored the intergenerational survival and success of five
business groups in India that had survived beyond three generations without experiencing a split, namely, Dabur, Godrej, Kirloskar, Murugappa, and Wadia. He identified compassion and competitiveness as the distinguishing (not necessarily
conflicting) value systems affecting family and firm, respectively. In a follow-up
study, Ramachandran and Jha (2007) argued that the governance needs of closely
held family-owned companies are unique, as the board has to be simultaneously
playing the role of the agent of the common shareholders and the steward of family
interests. The multiple roles of the same participants in the family firms governance
mechanism are a pointer toward the need for developing a multiple agency perspective on the governance of family firms/business groups (Filatotchev et al., 2011).
Marisetty, Ramachandran, and Jha (2008) empirically measured the consequences
of succession with respect to its effect on shareholders wealth. They measured
shareholders wealth in terms of changes in return on assets (ROA) and the post
succession share market performance of the shares of the firm. They analyzed 124
family succession announcements of Indian family business groups during the period
19922006. They found that succession improves a firms ROA. It also results in an
average abnormal stock market return, irrespective of whether it is accompanied by
family feuds/splits or not. However, a split in the family during succession was
observed to decrease a firms value.
A study by a reputed credit rating agency in India has noted that leadership/executive transition was a key credit- and governance-related risk for 32 companies
within the fold of 16 prominent business houses of India (Moodys ICRA, 2007).
These risks are accentuated by the lack of transparency about the nonlisted familycontrolled holding companies that may have raised a significant amount of debt to
fund the groups companies. The study brings to the fore the relationship between
business succession and credit risks by referring to the predominance and entrenchment of the members of the controlling family on the board. The study notes that the
predominance and entrenchment of family members on the board dulls independence
and freshness of perspective. It was also found to be responsible for expropriation of
cash-flow rights by appointment of and compensation to the family members and
secondary treatment of minority shareholders. The study notes that although companies are obliged to treat shareholders equally, in practice that rarely happens and
especially not when a group breaks up to resolve family succession. Tripathi (1999)
noted that in several cases it was indeed a case of expropriation of the rights of the
majority by the controlling minority, thanks to the pyramid structure of ownership of
these groups. Jiang and Peng (2011b) viewed such a situation of corporate


A. Saxena

governance in family-controlled large firms/business groups as an instance of principalprincipal conflicts.

The foregoing findings about the credit- and governance-related risks of business
group ownership and succession in India are neither isolated nor recent observations.
The Daphtary Sastry Committee brought to the fore irregularities in the DalmiaJain
group in the 1950s (Institute of Company Secretaries of India, 1994). The Hazari
Committee report of the 1960s observed that business groups were a source of
concentration of economic power. Another study reported that Indian business groups
engaged in rent-seeking behavior (Majumdar & Sen, 2006). Transgenerational
succession in business houses then, ipso facto, also implies the succession of these
characteristics with obvious implications for the economic system.
In the backdrop of continuing globalization, there seems to be a renewed justification for the further strengthening of the economic power of these business groups.
On the other hand, the exposure to governance and management practices might also
pave the way toward greater professionalization of management. At the cultural level,
the emerging social order is getting characterized by weakening of the family ties and,
in Hofstedes (1984a, b) formulation, the growing individualism and shortening of
power distance. The scenario of transgenerational succession in Indian business
groups is indeed getting queerer.
How do we account for these transitions? We are of the view that it should be
possible to develop an eclectic framework that considers the precipitating, proximate,
as well as background factors impacting the actors, the act, and the outcomes of
succession. This is what we turn our attention to in the next section.

Eclectic framework
In the review of studies on succession in family firms, it has been seen that much of
the research relies on the psychoanalytic framework for explaining succession. The
psychoanalytic framework analyzes the characteristics of the main actors, that is, the
incumbent and the successor and their relationships with other family members and
with business stakeholders. Taking cue from institutional theory (Aoki, 2001;
DMello, 2002; Geertz, 1973; North, 1990; Polanyi, 1944; Redding, 2005; Whitley,
1992) and varieties of Asian capitalism perspective of Carney, Gedajlovic, and Yang
(2009), we construct an eclectic framework (Fig. 1) that extends the psychoanalytic
framework to account for the historical, sociocultural, economic, and political context
of succession in business groups.
The eclectic framework has several advantages over the psychoanalytic framework
for explaining the succession process generally and succession in family businesses
and family-controlled business groups. First, to the extent it facilitates the study of
succession-related behavior as well as its context, the eclectic framework has the
merit of linking the theory of transgenerational succession in family businesses with
the theory of evolution and transformation of business groups (Kedia, Mukherjee, &
Lahiri, 2006). Second, by contextualizing business succession, the framework permits construction and consideration of regulative, normative, and cognitive mechanisms that shape the identities and interests of a wider set of stakeholders (Filatotchev,
Gregory, & Chizu, 2012) and the multiple roles of the same stakeholder (Filatotchev

Transgenerational succession in business groups in India


Fig. 1 Eclectic framework

et al., 2011) in the succession process. Third, recognizing that succession may be
better understood as a process rather than merely as an event, the eclectic framework
proposed here captures the entirety of the succession process. That is, it examines the
succession process right from the awareness of the need for succession planning by
the incumbent to his or her withdrawal in favor of the successor. Fourth, the eclectic
framework that incorporates an institutional perspective on succession has a definite
empirical value too. For example, Hofstede (2004, 2007) found that national institutions explain 50 % of the differences in managerial attitudes, beliefs, values, and
motives of the business leaders and shape their behavior.
In view of the theoretical and empirical relevance of the eclectic framework thus
established, a brief explanation of its contents would be in order. In the following
paragraphs, we shall focus on explaining the contextual factors and the influence
transmission mechanism.
The cultural variables included in the framework are community, family, Hofstedes
cultural dimensions, and Halls notion of context. The community and family
linkage-based business groups and succession from among the family members stand
out as an example of particularistic cultures (Granovetter, 1994; Hofstede, 1984a,
b, 2004, 2007; Luo & Chung, 2005; Strachan, 1976). Hall (1976) talked about
cultural contexts and showed how transactional integrity is maintained despite imperfect contracts in high-context cultures. Business groups typify this integrity and


A. Saxena

social capital (Encarnation, 1989; Leff, 1978). Unfortunately, however, relationshipbased economies of Asia have had to incur the pejorative description of crony
capitalism from the Western commentators. The point is that convenient labeling
of relationship-based/kinship-based economic transactions (Stewart, 2003) as nepotism and of family capitalism as cronyism misses out on the salient facets of the
culture of the Asian economies. Culture comprises much of the informal institutions,
and as Estrin and Prevezer (2011) suggested, the informal institutions may not always
be in conflict with the formal institutions governing business conduct and corporate
governance. Having said that, it is also important to be aware of the hazards
associated with the dominance of these concerns over the economic logic. Such a
critical perspective would facilitate the conceptualization and implementation of
governance mechanisms that leverage the strengths and deal with the limitations of
family firms and family-controlled business groups. The emphasis on the one-sizefits-all model of governance has been adequately and rightly questioned, and the
need for context/culture-sensitive approaches has been adequately emphasized in
recent research (Chen, Li, & Shapiro, 2011).
The roots of the cultural embeddedness of behavior may be traced to religion
(Weber 1930/2001). In the case of India, of particular importance are caste (Gadgil,
1959) and linguistic communities (Sharma, 1980; Timberg, 1978). It may be noted
that community-based networks provide credit, insurance, and business connections
to their members throughout the world (Fafchamps, 2001; Rauch & Vitor, 2002).
However, the role of culture is not limited to serving as an alternative mode of
allocation of resources, alternative to markets. Culture also impacts behavior via
sensemaking and socialization (Granovetter, 1985; Lubatkin, Lane, Collin, & Very,
2007; Weick, 1995). Starting from the immediate source, the impact of culture on an
individuals sensemaking and socialization may be seen in terms of successively
broader circles of family, community, and society. Thus, family may be regarded as
the institution of primary socialization and sensemaking of a person. In family firms,
the incumbent and the successor are expected to play the dual role of a business
leader and the family patriarch. An important aspect of this chain is the institution of
marriage. For example, on the one hand, marriage can be instrumental in strengthening business and community linkages. And, on the other hand, the problem of
succession is acute in communities that permit polygamy.
State policy is perhaps the most dominant aspect of the politico-legal context of business.
In regard to the business groups, it has been a frequently recurring theme (Carney, 2008;
Ma, Yao, & Xi, 2006; Prowse, 1996). Besides state policy, the laws play an important role
in shaping the business system and human behavior. With regard to succession, inheritance laws play a critical role (Kuran & Singh, 2010). The politicolegal contextual factors
included in the framework are state policy, regulation, and inheritance laws.
History shapes a nations institutions and administrative heritage (Bartlett & Ghoshal,
1989; Calori, Lubatkin, Very, & Veiga, 1997). It played an important role in the

Transgenerational succession in business groups in India


emergence of business groups in Japan (Morikawa, 1992), in Korea (Amsden,

1989), and in India (Mazumdar, 2008). History also accounts for the differences
in the nature of business groups in these countries. As an example, Indian
business groups are often referred to as the legacy of the colonial rule. History
provides a temporal dimension to the issue of succession. Incumbents experience at the time he or she succeeded the business is likely to affect his or her
succession-related predispositions, decisions, and behavior. The attributes of this
factor included in the framework are evolution of institutions, legacy of business system, and colonial rule.
In the early stages of economic development, concentration of entrepreneurial
activity in select pockets (business communities, families) is a generally
reported phenomenon. In relation to business groups, the antecedent of early
stages is referred to as institutional void (Fisman & Khanna, 2004; Khanna &
Palepu, 1997; Khanna & Yafeh, 2007; Leff, 1978). It implies, inter alia,
deficiency of demand, and inadequately developed capital markets, labor markets, and markets for managerial talent. However, business groups last long
enough and even after the voids have been filled because of the unassailable
economic power accumulated over time (Mazumdar, 2008; Morck, Wolfenzon,
& Yeung, 2005). The variables included in the framework comprise stage in
development, basic conditions of demand and supply, capital market, and
market for managerial talent.
Ethics comprise the philosophical foundation of the very institutions of business,
corporation, and business group. It is known that business groups propagate their
economic power through pyramid structures and cross-holdings. As a result, with
minimal equity they are able to build vast empires, which, in fact, are funded by
public financial institutions and common investors. An ethical question in relation to
business succession is, how can one bequeath what one does not really own?
Moreover, there is a lot to the darker side of business groups. Business groups have
been criticized for serving as devices for expropriating minority shareholders, and for
tunneling, looting, and plundering the assets of their affiliates (Morck & Yeung,
2004; Scharfstein & Stein, 2000; Young, Peng, Ahlstrom, Bruton, & Jiang, 2008).
Succession also entails the moral hazard of perpetuation of their darker side. Besides,
if the managers outside the family are not considered or consulted for leadership
succession despite their competence, there is an associated ethical problem of
employees rights.
International environment
The state, the economy, and the society comprise the domestic context of business
groups. However, the present context is also characterised by globalisation. In such a
scenario, the business groups have to compete against or establish alliances with


A. Saxena

firms from other parts of the world (Kim, Kandemir, & Cavusgil, 2004). This, inter
alia, exposes them to global best practices in succession planning as well as governance mechanisms and regulatory regimes.
Influence transmission mechanism
The eclectic framework elaborated in Fig. 1 integrates the PA framework and the
supracontext of succession in business groups/family business. It is important to note
that both the business system and its context coevolve in a two-way interaction
(Williamson, 2000). This interaction need not necessarily be a relay transmission; it
can even be jump transmission. For example, as the business groups interact with
their foreign partners, this interaction is not necessarily via the national institutions.

Applying the eclectic perspective on succession in Indian business groups

Having elaborated the contours of the eclectic framework for understanding succession in business groups/family business, we can now examine the evidence of transgenerational succession in Indian business groups using the framework as lens. The
saga of succession in business groups is characterized by family splits. Dalmias were
the first prominent business house to break up after freedom. They were the third
largest industrial group in the 1940s after the Tata Group and the undivided Birlas.
They had 21 businesses, including banks, aviation, newspapers, and railway companies. The split happened in the early 1950s. It was then regarded as an isolated
incident. Family splits, indeed, were few and far between during the first two decades
after independence. The pace, however, accelerated beginning with 1970, and the
following 25 years witnessed splits in many business families: the Birlas, Modis,
Sarabhais, Bangurs, Singhanias, Mafatlals, Shrirams, Thapars, Walchands, and
Goenkas (Table 2).
Historical and sociocultural influence
Tripathi (2005) considered splits in business groups and stress on the family
system as a natural consequence of socioeconomic change (viz., industrialization,
urbanization, exposure to Western values and ethos, etc.). Given further that
Indias industrial houses emerged out of the forays of the trading communities
that would, for obvious reasons, be town-based and basically urban, appearance of
the fissionary trends in family structures seems only natural. The fissions became
starker with successive generations and as the family structure changed into a
consortium of cousins. This should explain why family business splits are common
in the third generation.
Community linkage is an inescapable fact of Indian business houses, and so is the
cross-community variation in succession-related experiences. Mukhopadhyaya
(2005) wrote that feuds over succession have been a part and parcel of Kolkatabased Marwari businessmen. In the South, however, more conservative upbringing
and stronger cultural background and family ties seem to be playing a mitigating role
in such occurrences (FES Bureau, 2005).

Transgenerational succession in business groups in India


Table 2 Instances of splits in Indian business houses

Name of
the group



in the ILPIC

Year(s) of

Whether included
in the 1997 list of
Indias top
business housesd


Ramkrishna Dalmia



1952, 1981



Karam Chand Thapar






Badri Das Goenka






Mafatlal Gangalbhai

Around turn
of the 19th





Kamalpat Singhania



1979, 1992



Piramal Chaturbhuj






Lala Shri Ram



1984, 1989



Baldeo Das Birla






Kanhaiya Lal Punj






Rai Bahadur Gujar

Mal Modi






Mugneeram and
Rangnath Bangur






Walchand Hirachand






Bhai Mohan Singh






T.V.S. Iyengar

Around World
War II





Raunaq Singh






Jamnalal Bajaj






Laxmanrao Kirloskar






Dhirubhai Ambani





ILPIC Industrial Licensing Policy Inquiry Committee; N/A Not available


The year/period pertains to the time when the group made its first industrial foray. See Sharma (1980)

Government of India (1965)

Financial Express (2005)

Mazumdar (2008)

Politico-legal influence
Indian business houses during the British period were dominated by the managing
agency system. Kling (1966: 40) referred to it as the only sub-system in the
economy with the capital, business expertise and continuity to provide the entrepreneurial and managerial system. The system sought to optimize managerial economies via putting diverse industrial enterprises under one agency. After independence,
the managing agency system was abolished. Yet, despite legislative and administrative intent to the contrary, its legacy continued via intercorporate investments. Hazari
(1966) noted that this de facto managing agency system whereby the controlling


A. Saxena

promoters directly participated in the management of the companies within the group
was instrumental in the perpetuation of family control. Appointment of professional
technicians and managers helped in overcoming the managerial void. But the appointment of family members at levels superior to these professionals complicated the
interface between the business and the family ecosystems. It also resulted in mutual
dependence between the family members and the managers and created room for
sycophancy and the family power play.
Economic policy influence
The economic policies of the Government of India also shaped the nature and power
of the business groups. For example, consider the impact of the policies of import
substitution and industrial licensing system. As a consequence of restrictions on
imports, those who were importing products entered into collaboration with their
principals for manufacturing those products in India. Thus, what was once a trading
community gradually transformed into a community of industrialists (Government of
India, 2002). Furthermore, the operation of the industrial licensing system resulted in
a situation whereby the business groups were able to corner industrial licenses. For
example, R.K. Hazari, in a report to the Planning Commission in 1967, noted that of
all the licensed industrial investment approved by the government between 1957 and
1966, 20 % went to the Birla Group alone.
From the foregoing analysis of the contextual influences, it is evident that the
emergence, growing economic power, and splits in the Indian business houses could
be broadly attributable to a myriad of historical, cultural, and politicolegal factors. It
would be apt now to examine as to how the various elements of the psychoanalytic
framework might have impacted succession in Indian business groups. Even at the
cost of repetition, it is pertinent to mention here that the psychoanalytic framework
deals with, among other things, the impact of business characteristics and the
succession process on the effectiveness of transgenerational succession and its
Business characteristics
As a form of economic organization, business groups are often characterized by
(1) the existence of a number of firms under centralized ownership, coordination, and control structure and (2) diversification, rather than amebic multiplication, of firms in the same line. These firms could be promoted from bottomup or acquired.
If the business group is not adequately diversified, then succession issues and the
succession aftermath get complicated. The disintegration of the Modi Empire, built
by Rai Bahadur Gujar Mal Modi in the early years of the 20th century, may be cited
as an instance in this regard. The group was split in 1989 between the nine Modi
siblings. It was built around two distinct lines of business activity, with a number of
companies in each line of business. When the family split, several of the claimants
became in-charge of competing businesses. Worse still, while the management
control over these companies was succeeded, there was no effort to disentangle
cross-holdings. As a result, on the one hand, managerial incompetence led to

Transgenerational succession in business groups in India


industrial sickness. And, on the other hand, nonresolution of cross-holdings led to

court battles among the family members.
Succession process
It is often alleged in the case of Indian businessmen that planning often takes place in
their minds, the planning process is informal, and plans are rarely put in black and
white (Sharma, 1994). The same may be said in respect of succession planning in
Indian business houses. Moreover, since it is predecided that the successor will be
from among the family members, the issue is essentially of grooming the successor
rather than that of finding one. And the grooming might involve occasionally taking
the children to office when they are young, requiring them to come to office from
their school/college. Gradually, they may be involved in day-to-day, routine operations such as meeting customers, interacting with suppliers, picking up the shop
floor cues, and so on. Otherwise, the children may be deliberately encouraged to
pursue higher studies in engineering, marketing, finance, and so on.
An early exposure to business life orients and prepares the next generation for
assuming bigger responsibilities when the time comes. While they are interlocked in a
conflict that has aroused many an interest and anxiety, both Mukesh Ambani and Anil
Ambani were carefully groomed by their father for taking up the roles of business
leadership. While Dhirubhai was not highly educated, he knew the value of education. Mukesh pursued chemical engineering and went to Stanford for his MBA. Anil
pursued marketing at Wharton. When G.D. Birla passed away in 1983 at the age of
89 years, he bequeathed his companies to grandson Aditya Vikram Birla, even as
B.K. Birla, G.D. Birlas son, continued to head his set of companies. Born in 1943,
Aditya Vikram Birla was the first Birla to be educated abroad and received a degree in
chemical engineering from MIT Boston in 1962. Anand Mahindra studied at
Harvard. Rahul Bajaj too studied at Harvard.
Qualified scions might legitimize succession of the family members to directorial/top-level managerial positions vis--vis nonfamily managers but then what about the
fissionary tendencies in the families? One view could be that if the families split, let
them, as long as the splits in the family do not result in externalities for the business
ecosystem. The other view could be that if business houses represent an endogenous
and an inherently whole amalgam of business and joint family system, happenings in
one are likely to impact the other.
Business consequences of family splits
Family disputes and the lack of succession planning triggered the decline in fortunes
of many business families. These slowed down the growth of Singhanias, pulled
down the businesses of the Modi Group, badly affected Kirloskars, and spelt a
financial mess on the DCM-Shriram Group. The foreign partners of the groups
experiencing family squabbles chose to part ways as happened in the case of
Modis joint ventures (JVs) with Xerox Corp., Alcatel, Motorola, and Olivetti and
Kirloskars JV with Cummins Engine Co. of the United States. Such instances were
frequent in cases in which the Indian partner was bringing little to the table other than
managing the environment (Gupta, 2007). Interestingly, while the split in the Ambani


A. Saxena

family is still fresh, the postsplit performance in their case has been very unlike that of
the groups referred to earlier. In fact, even among groups that split, certain factions
have done exceedingly well. Take for instance, the Aditya Birla Group from the Birla
clan and the L.M. Thapar Group from the Thapar clan. The postsplit performance of
the business groups in such cases seem, however, to be pointing toward the quality of
the successors, the quality of succession notwithstanding.
The saga of succession in Indian business houses is also replete with examples of
defaults on bank loans and public deposits. It has also witnessed general disregard of
minority shareholders and creditors. Moreover, though not exclusively attributable to
them alone, Indian business houses have been accused of exploiting political contacts, indulging in insider trading, and expropriation of cashflow rights by paying to
the members of the promoter families unreasonable salaries, perquisites, soft loans,
and so on. The DalmiaJain Groupone of the worst sufferers of splitswas hurt
even more severely because of the involvement of its founder in several cases of tax
evasion. Many shady business practices were brought to light in 1962 by a special
commission (the Daphtary Sastry Commission) appointed by the central government
(Institute of Company Secretaries of India, 1994). This caused irreparable damage to
the groups reputation. It is said that these happenings in the group came to the fore
owing to the conflict in the DalmiaJain families. Such occurrences are indicative of
reputational/franchise risks associated with inadequate succession planning.
Likewise, until the conflict between Ambani brothers, hardly anybody knew that
there was a nexus of 400500 investment companies through which the family owned
the stakes of the promoters and associate companies in the Reliance Group.
Generally, the functioning of the business groups is so opaque and ownership
structures so complex that it becomes virtually impossible to assess the associated
risks, thereby increasing the vulnerability of the other stakeholders.

Concluding observations
Changes in the family culture and the economic environment have made it difficult
for the Indian business groups to function solely as family/kinship-based economic
organizations. Tripathi (2011) also noted that the fissionary tendencies that started
long before independence are likely only to accentuate and that family business is on
the wane.
It is not that the Indian business houses have been unaware of or are unresponsive
to these developments. Some of the business houses out of their own experiences as
well as from others mistakes have started restructuring their businesses on more
rational lines by consolidating businesses along industries, divesting out-of-line
businesses, and untangling the cross-holdings. In fact, the relative success with which
Murugappa and Dabur have traversed the succession trail by separating the operational management from ownership and putting in place family constitutions and
family councils may be regarded as the emerging best practices in business succession. Business houses such as Bajaj and Murugappa consciously followed the
practice of socialism within the family based on equality of allowances, size of
the office, automobiles, vacations, class of air travel, and so on, with the aim of
minimizing differences and comparisons.

Transgenerational succession in business groups in India


Some Indian business houses, especially those who have actively globalized their
businesses, on their own, have also shown the courage to transform some of the
longstanding but stifling traditions. For example, saddled with the legacy of tangled
ownership within a large family, Kumar Manglam Birla not only disentangled the
cross-holdings but also inducted the finest managerial talent to strengthen his top
team in a group that was obsessed by loyalty. In fact, Kedia et al. (2006) posited that
there are visible variations in the pattern of behavior of Indian business groups in the
preliberalization and postliberalization eras. Ramachandran and Bhatnagar (2012)
noted that the concept of succession planning is increasingly creeping in the family
business culture in India, something almost unheard of among family firms just about
a decade ago.
The eclectic framework developed in this article is likely to facilitate the mapping
of the myriad of factors influencing business groups and succession planning therein.
A historical count as well as current and futuristic rating of the likely impact of these
factors might facilitate the preparation of what may be referred to as an index of
family business preparedness for transgenerational succession and assessment of
credit- and governance-related risks relating thereto.
Societies in transition evolve their respective ways of simultaneously embracing technological and economic change and preserving social values.
Prescription of straitjacket solutions would only be hasty. Nevertheless, in view
of the substantial credit- and governance-related risks associated with familycontrolled business groups, it is imperative that the business groups be required
to explicitly engage in emergent, short-term, and long-term succession planning
both for the individual firms within the group and for the group as a whole.
The continuance of institutional/bank funding as well as the firms/groups
credit rating may be linked to incumbents performance on the front of succession planning and grooming a successor. Greater stakeholder activism might
further compel the business groups in this regard. In as much as fissionary
tendencies in the family are attributable to the individual members craving for
autonomy, these groups may be better organized as loose federations of independent businesses rather than as the existing morass of ownership and control
structures. Breaches in kinship and filial ties are eminently avoidable, and the
development of newer ways of economic collaboration is eminently possible.

Amsden, A. 1989. Asias next giant: South Korea and late industrialization. New York: Oxford University
Aoki, M. 2001. Toward a comparative institutional analysis. Cambridge: MIT Press.
Bangkok Post. 2009. Opinion: A family feud that is threatening Asias energy needs. Aug. 31.
www.bangkokpost.com, accessed on Jan. 5, 2010.
Barach, J. A., Gantisky, J., Carlson, J. A., & Doochin, B. A. 1988. Entry of the next generation: Strategic
challenge for family business. Journal of Small Business Management, 26(2): 4956.
Bartlett, C. A., & Ghoshal, S. 1989. Managing across borders: The transnational solution. Boston:
Harvard Business School Press.
Beckhard, R., & Dyer, W. G., Jr. 1983a. Managing change in the family firms: Issues and strategies. Sloan
Management Review, 24(3): 5965.


A. Saxena

Beckhard, R., & Dyer, W. G., Jr. 1983b. Managing continuity in the family-owned business.
Organizational Dynamics, 12(1): 512.
Birley, S. 1986. Succession in family firm: The inheritors view. Journal of Small Business Management,
24(3): 3643.
Birley, S., Ng, D., & Godfrey, A. 1999. The family and the business. Long Range Planning, 32(6): 598
Bjuggren, P. O., & Sund, L. G. 2001. Strategic decision-making in intergenerational successions of smalland medium-size family-owned businesses. Family Business Review, 14(1): 1123.
Burkart, M., Panunzi, F., & Shleifer, A. 2003. Family firms. Journal of Finance, 58(5): 21672201.
Calori, R., Lubatkin, M., Very, P., & Veiga, J. 1997. Modeling the origins of nationally-bounded administrative heritage: A historical institutional analysis of French and British firms. Organization Science,
8(6): 681696.
Carney, M. 2008. The many futures of Asian business groups. Asia Pacific Journal of Management, 25(4):
Carney, M., Gedajlovic, E., & Yang, X. 2009. Varieties of Asian capitalism: Toward an institutional theory
of Asian enterprise. Asia Pacific Journal of Management, 26(3): 361380.
Cazurra, A. C. 2006. Business groups and their types. Asia Pacific Journal of Management, 23(4): 419437.
Chatterjee, S. R., & Nankervis, A. R. (Eds.). 2007. Asian management in transition: Emerging themes.
New York: Palgrave MacMillan.
Chen, V., Li, J., & Shapiro, D. 2011. Are OECD-prescribed Good corporate governance practices really
good in an emerging economy?. Asia Pacific Journal of Management, 28(1): 115138.
Chen, Y., Friedman, R., Yu, E., & Sun, F. 2011. Examining the positive and negative effects of guanxi
practices: A multi-level analysis of guanxi practices and procedural justice perceptions. Asia Pacific
Journal of Management, 28(4): 715735.
Chua, J., Chrisman, J., & Sharma, P. 2003. Succession and non-succession concerns of family firms and
agency relationship with non-family managers. Family Business Review, 16(2): 115.
Chung, H.-M., Liu, Y.-S., & Yeh, K. S. 2007. The business of succession in Taiwans family business.
Paper presented at the First Asian Invitational Conference on Family Business, Indian School of
Business, Hyderabad, India, December.
Das, G. 2004. A small matter of the ego. Times of India: Dec. 12. www.timesofindia.indiatimes.com,
accessed on Jan. 5, 2010.
Deccan Chronicle. 2009. Ambanis are fighting like countries at war. Oct. 20. www.deccanchronicle.com,
accessed on Jan. 5, 2010.
DMello, B. 2002. Transnational pharmaceutical corporations and neo-liberal business ethics in India.
Journal of Business Ethics, 36(1/2): 165185.
Dunemann, M., & Barrett, R. 2004. Family business and succession planning: A review of the literature.
Australia: Family and Small Business Research Unit, Faculty of Business and Economics, Monash
Dutta, A., & Dutta, A. 2008. Family fortunes: Behind the public face of business. CLSA Asia-Pacific
Markets Special Report. www.clsa.com, accessed on Jan. 5, 2010.
Encarnation, D. 1989. Dislodging multinationals: Indias comparative perspective. Ithaca, NY: Cornell
University Press.
Estrin, S., & Prevezer, M. 2011. The role of informal institutions in corporate governance: Brazil, Russia,
India, and China compared. Asia Pacific Journal of Management, 28(1): 4167.
Fafchamps, M. 2001. The role of business networks in market development in sub-Saharan Africa. In M.
Aoki & Y. Hayami (Eds.). Communities and markets in economic development: 186215. New York:
Oxford University Press.
FES Bureau. 2005. Under the wrapsProblems exist but public restraint is the name of the game in south
India. Financial Express. June 26. www.financialexpress.com, accessed on Jan. 5, 2010.
Filatotchev, I., Gregory, J., & Chizu, N. 2012. Corporate governance and national institutions: A review and
emerging research agenda. Asia Pacific Journal of Management. doi:10.1007/s10490-012-9293-9.
Filatotchev, I., Zhang, X., & Piesse, J. 2011. Multiple agency perspective, family control and information
risk in emerging markets. Asia Pacific Journal of Management, 28(1): 6993.
Financial Express. 2005. Fighting for family fortunes. Financial Express. June 26. www.financialexpress.com,
accessed on Jan. 5, 2010.
Fisman, R., & Khanna, T. 2004. Facilitating development: The role of business groups. World
Development, 32(4): 609628.
Fox, N., & Hamilton, R. T. 1996. Managing succession in family-owned businesses. International Small
Business Journal, 15(1): 1525.

Transgenerational succession in business groups in India


Gadgil, D. R. 1959. Origins of the modern Indian business class: An interim report. New York:
International Secretariat, Institute of Pacific Relations.
Geertz, C. 1973. The interpretation of cultures. New York: Basic Books.
Granovetter, M. 1985. Economic action and social structure: The problem of embeddedness. The American
Journal of Sociology, 91(3): 481510.
Granovetter, M. 1994. Business Groups. In N. J. Smelser & R. Swedburg (Eds.). The handbook of
economic sociology: 453475. Princeton, NJ: Princeton University Press.
Grote, J. 2003. Conflicting generations: A new theory of family business rivalry. Family Business Review,
16(2): 113122.
Government of India. 1965. Report of the industrial licensing policy inquiry committee (ILPIC report).
New Delhi: Government of India.
Government of India. 2002. Report of the National Commission on Labour. New Delhi: Government of
India. labour.nic.in/lcomm2/2nlc-pdfs/Chap3.pdf.
Gupta, A. 2007. All in the family. Business Outlook: Aug. 20. business.outlookindia.com, accessed on May
11, 2011.
Hall, E. T. 1976. Beyond culture. New York: Doubleday.
Handler, W. C. 1990. Succession in family firms: A mutual role adjustment between entrepreneur and nextgeneration family member. Entrepreneurship: Theory and Practice, 15(1): 3751.
Hazari, R. K. 1966. The structure of the corporate private sectorA study of concentration, ownership and
control. Bombay: Asia Publishing House.
Hofstede, G. 1984a. Cultural dimensions in management and planning. Asia Pacific Journal of
Management, 1(2): 8199.
Hofstede, G. 1984b. National cultures revisited. Asia Pacific Journal of Management, 2(1): 2228.
Hofstede, G. 2004. Business goals and corporate governance. Asia Pacific Business Review, 10(34): 292
Hofstede, G. 2007. Asian management in the 21st century. Asia Pacific Journal of Management, 24(4):
Indian Express. 2009. Mukesh Ambani admits there are ownership issues in Reliance group. Nov. 19.
www.indianexpress.com, accessed on Jan. 5, 2010.
Institute of Company Secretaries of India. 1994. Research study on directors replies to qualifications in
auditors report. New Delhi: Institute of Company Secretaries of India.
Jain, R. 2006. Chains that liberate: Governance of family firms. New Delhi: MacMillan India Ltd.
Jiang, Y., & Peng, M. W. 2011a. Are family ownership and control in large firms good, bad, or irrelevant?.
Asia Pacific Journal of Management, 28(1): 1539.
Jiang, Y., & Peng, M. W. 2011b. Principalprincipal conflicts during crisis. Asia Pacific Journal of
Management, 28(4): 683695.
Kedia, B. L., Mukherjee, D., & Lahiri, S. 2006. Indian business groups: Evolution and transformation. Asia
Pacific Journal of Management, 23(4): 559577.
Kepner, E. 1983. The family and the firm: A co evolutionary perspective. Organisational Dynamics, 12(1):
Kets de Vries, M. F. R. 1993. The dynamics of family controlled firms: The good and the bad news.
Organisational Dynamics, 21(1): 5968.
Khanna, T., & Palepu, K. 1997. Why focused strategies may be wrong for emerging markets. Harvard
Business Review, 75(4): 4151.
Khanna, T., & Yafeh, Y. 2007. Business groups in emerging markets: Paragons or parasites?. Journal of
Economic Literature, 45(2): 331372.
Kim, D., Kandemir, D., & Cavusgil, T. 2004. The role of family conglomerates in emerging markets: What
Western companies should know?. Thunderbird International Business Review, 46(1): 1338.
Kling, B. B. 1966. The origin of the managing agency system in India. Journal of Asian Studies, 26(1): 3747.
Kuran, T., & Singh, A. 2010. Economic modernization in late British India: Hindu-Muslim differences.
Unpublished paper, www.econ.yale.edu/~egcenter/Kuran_SinghPaper.pdf, accessed on May 11, 2011.
Lamont, J. 2010. Indian groups failing to plan for successor. Financial Times: Aug. 6. www.ft.com,
accessed on Jan. 5, 2010.
Lansberg, I. 1999. Succeeding generations: Realizing the dream of families in business. Boston: Harvard
Business School Press.
Lee, K.-S., Lim, G.-H., & Lim, W.-S. 2003. Family business succession: Appropriation risk and choice of
successor. Academy of Management Review, 28(4): 657666.
Leff, N. H. 1978. Industrial organization and entrepreneurship in the developing countries: The economic
groups. Economic Development and Cultural Change, 26(4): 661675.


A. Saxena

Lubatkin, M., Lane, P. J., Collin, S. C., & Very, P. 2007. An embeddedness framing of governance and
opportunism: Towards a crossnationally accommodating theory of agency. Journal of Organizational
Behaviour, 28(1): 4358.
Luo, X., & Chung, C. N. 2005. Keeping it all in the family: The role of particularistic relationships in
business group performance during institutional transition. Administrative Science Quarterly, 50(3):
Ma, X., Yao, X., & Xi, Y. 2006. Business group affiliation and firm performance in a transition economy: A
focus on ownership voids. Asia Pacific Journal of Management, 23(4): 467483.
Majumdar, S. K., & Sen, K. 2006. The debt wish: Rent-seeking by business groups and the structure of
corporate borrowing in India. Public Choice, 130(12): 209223.
Marisetty, V., Ramachandran, K., & Jha, R. 2008. Wealth effects of family succession: A case of Indian
family business groups. Working paper, Thomas Schmidheiny Chair of Family Business & Wealth
Management, Indian School of Business, Hyderabad, India.
Mazumdar, S. M. 2008. The analysis of business groups: Some observations with reference to India.
Working paper no. 2008/11, Institute for Studies in Industrial Development, New Delhi.
Meijaard, J., & Uhlaner, L. M. 2005. Bedrijfsoverdrachten in Nederland: Pilotstudie kosten, baten en
determinanten van success. In Family business research: A literature review. wms-soros.mngt.
waikato.ac.nz, accessed on Jan. 5, 2010.
Moodys ICRA. 2007. Corporate governance and related credit issues for Indian family-controlled business. Corporate Finance: Oct. www.icra.in, www.moodys.com, accessed on Jan. 5, 2010.
Morck, R. K., Wolfenzon, D., & Yeung, B. 2005. Corporate governance, economic entrenchment, and
growth. Journal of Economic Literature, 43(3): 655720.
Morck, R. K., & Yeung, B. 2004. Family control and the rent-seeking society. Entrepreneurship: Theory
and Practice, 28(4): 391409.
Morikawa, H. 1992. Zaibatsu: The rise and fall of family enterprise groups in Japan. Tokyo: Tokyo
University Press.
Mukhopadhyaya, S. 2005. Feuds are part and parcel of Kolkata-based Marwari businessmen. Financial
Express: June 26. wwwfinancialexpress.com, accessed on Jan. 5, 2010.
North, D. 1990. Institutions, institutional change and economic performance. Cambridge: Cambridge
University Press.
Peng, M. W., & Delios, A. 2006. What determines the scope of the firm over time and around the world?
An Asia Pacific perspective. Asia Pacific Journal of Management, 23(4): 385404.
Penrose, E. T. 1959. The theory of the growth of the firm. Oxford: Basil Blackwell.
Pieper, T. M. 2007. Mechanisms to assure long-term family business survival: A study of the dynamics of
cohesion in multigenerational family business families. Frankfurt: Peter Lang.
Piramal, G. 1996. Business maharajas. New Delhi: Penguin.
Piramal, G. 1998. Business legend. New Delhi: Viking.
Polanyi, K. 1944. The great transformation: The political and economic origins of our times. Boston:
Powell, W. W. 1990. Neither markets nor hierarchies: Network forms of organization. In L. L. Cummings &
B. M. Staw (Eds.). Research in organizational behaviour, 12: 295336. Greenwich, CT: JAI Press.
Poza, E. 2004. Family business. Mason, OH: Thomson Southwestern.
Prowse, S. D. 1996. Corporate finance in international perspective: Legal and regulatory influences on
financial system development. Federal Reserve Bank of Dallas Economic Review, Third Quarter: 215.
Qi, Q. 2009. The role of board of directors in CEO succession: Theory and evidence. webapps.krannert.
purdue.edu, accessed on Jan. 13, 2010.
Ramachandran, K. 2005. Indian family businesses: Their survival beyond three generations. Working
paper, Indian School of Business, Hyderabad, India.
Ramachandran, K., & Bhatnagar, N. 2012. Challenges faced by family businesses in India. Working paper,
Indian School of Business, Hyderabad, India.
Ramachandran K., & Jha, R. 2007. Governance in family-controlled businessesA conceptual discussion.
Working paper, Indian School of Business, Hyderabad, India.
Rauch, J. E., & Vitor, T. 2002. Ethnic Chinese networks in international trade. Review of Economics and
Statistics, 84(1): 116130.
Redding, G. 2005. The thick description and comparison of societal systems of capitalism. Journal of
International Business Studies, 36(2): 123155.

Transgenerational succession in business groups in India


Saxena, A. 2005. Behavioural choices for successful entrepreneurship in the WTO era. Paper presented at
National Seminar on WTO and Entrepreneurship Development, V.B.S. Purvanchal University,
Jaunpur, U.P., India, February.
Saxena, A., Deb, A. T., & Mehlawat, M. K. 2011. The linkages between corporate governance and CEO
succession: A theatrical episode, a theoretical framework and an analytical model. In R. K. Mishra, M.
Sahay, S. Jhunjhunwala, & S. Bavirishetty (Eds.). Corporate governance and corporate social
responsibility. New Delhi: Macmillan.
Scharfstein, D. S., & Stein, J. C. 2000. The dark side of internal capital markets: Divisional rent-seeking
and inefficient investment. Journal of Finance, 55(6): 25372564.
Sharma, P. 2004. An overview of the field of family business studies: Current status and directions for the
future. Family Business Review, 17(1): 136.
Sharma, P., Chrisman, J. J., & Chua, J. H. 2003. Predictors of satisfaction with the succession process in
family firms: A conceptual model. Journal of Business Venturing, 18(5): 667687.
Sharma, R. A. 1980. Entrepreneurial change in Indian industry. New Delhi: Sterling.
Sharma, R. A. 1994. Strategic management in Indian companies. New Delhi: Deep & Deep Publications
Pvt. Ltd.
Smyrinos, K., Romano, C., & Tanewski, G. 1997. The Australian family and private business survey.
Australia: National Mutual Family Business Research Unit, Monash University.
Stavrou, E. 1999. Succession in family businesses: Exploring the effects of demographic factors on offspring
intentions to join and take over the business. Journal of Small Business Management, 37(3): 4362.
Stewart, A. 2003. Help one another, use one another: Toward an anthropology of family business.
Entrepreneurship: Theory and Practice, 27(4): 383396.
Strachan, H. W. 1976. Family and other business groups in economic development: The case of Nicaragua.
New York: Praeger.
Taylor, J. E., Norris, J., & Howard, W. H. 1998. Succession patterns of farmer and successor in Canadian
farm families. Rural Sociology, 63(4): 553573.
Timberg, T. 1978. The Marwaris: From traders to industrialists. New Delhi: Vikas Publishing House Pvt. Ltd.
Tripathi, D. 1999. Change and continuity. Seminar 482, www.india-seminar.com/1999/482/, accessed on
Jan. 5, 2010.
Tripathi, D. 2005. Dynamics of business splits. Financial Express: June 26. www.financialexpress.com,
accessed on Jan. 5, 2010.
Tripathi, D. 2011. Family business on the wane. Mint: June 3.
Weber, M. 1930/2001. The protestant ethic and the spirit of capitalism, trans. T. Parsons. London:
Weick, K. E. 1995. Sensemaking in organizations. Thousand Oaks, CA: Sage.
White, M. C., Smith, M., & Barnett, T. 1997. CEO succession: Overcoming forces of inertia. Human
Relations, 50(7): 805826.
Whitley, R. D. 1992. Business systems in East Asia: Firms, markets and societies. London: Sage.
Williamson, O. E. 2000. The new institutional economics: Taking stock, looking ahead. Journal of
Economic Literature, 38(3): 595613.
Young, M., Peng, M. W., Ahlstrom, D., Bruton, G. D., & Jiang, Y. 2008. Corporate governance in emerging
economies: A review of the principalprincipal perspective. Journal of Management Studies, 45(1): 196220.
Zhang, Y., & Rajagopalan, N. 2006. Grooming for the top post and ending the CEO succession crisis.
Organizational Dynamics, 35(1): 96110.

Anand Saxena (PhD, University of Delhi) is an associate professor of commerce at Deen Dayal Upadhyaya College, University of Delhi, in Delhi, India. His doctoral research pertains to motivation and
rewards of Indian entrepreneurs. His current teaching and research interests include entrepreneurship,
family business, corporate governance, and business ethics. He has developed e-content on Business Ethics
and Entrepreneurship for the University of Delhi. He has contributed content on business studies for school
education and has been a member of the textbook and other committees of the National Council of
Educational Research and Training, India. He is an accredited entrepreneurship motivation trainer. He is
a resource person for faculty development programs. He has presented research papers in national and
international conferences and has published in Information Sciences besides others.

Copyright of Asia Pacific Journal of Management is the property of Springer Science &
Business Media B.V. and its content may not be copied or emailed to multiple sites or posted
to a listserv without the copyright holder's express written permission. However, users may
print, download, or email articles for individual use.