Family businesses form an important part of the world economics. The same is true for the country like India as well where a huge portion of economic growth is contributed by the family businesses. The strategy planning is as essential for the family businesses as it is for any other business, but the process of the strategy planning is slightly different. Along with economic objectives, the family business caters to the personal and social objectives as well. The strategic planning for the family business needs to take care these objectives too. Also, the family business strategy should be developed keeping in the view the succession of the business. This project, with the help of the case study of M/s Stag International, looks into the strategic planning process for the family business. Based on the details provided in the sample case study, the paper develops and suggests various steps that can be taken to expand the family businesses in line with the objective of the owners and the company.
Family-owned businesses form a major chunk of the global economic landscape (Sharma P. , An overview of the field of family business studies: Current status, 2004), and constitutes the huge majority of the businesses in the world (Heck & Trent, 1999). (Aronoff, 1998)has stated that these businesses are as old as civilization.
The importance of family business cannot be denied. Most of the businesses in India are family owned, and a similar trend can be seen in the world as well (PWC, 2013).Family business are different from other counterparts because of the two different dynamics involved in them—the family dynamics and the dynamics of the business. Many times, these dynamics are conflicting in nature, and hence the family businesses create a system which needs special focus in terms of strategic planning (PWC, 2013).
With the expansion of industries globally and economic liberalization the family businesses have great chance to grow and develop, but this growth and development calls for engagement of existing resources and creation of additional resources. A company can decide to follow the path of development and take future risk, or it can decide to preserve the wealth rather than engaging the new system. The decision is not solely dependent upon the opportunities, but takes into account the personal motivation of the family members as well as wealth and welfare of their family. This further is dependent upon the mission and the vision of the family (Hoover & Hoover, 1999).
This paper studies the problems faced by the family owned businesses with the help of the case study of M/s Stag International, and tries to formulate a future pathway to solve these problems. (Sharma, Chrisman, & Chua, 1996)defined the family businesses as “the business concerns that is governed and/or managed on a sustainable, potentially cross-generational, basis to shape and perhaps pursue the formal or implicit vision of the business held by members of the same family or asmall number of families.”
As it is clear from the above definition, the family owned business also applies strategic management as they have their goals and visions and a strategy is formed to pursue these goals and visions. The company’s mechanics is developed in such a way that the strategy is implemented and the progress towards the goal is monitored.
The paper tries to answer the following questions in the due course:
The research follows the following model: