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February 1, 2002

The survival, integrity and growth instincts of family firms have helped the Indian diamond polishing industry expand into a major industry dominated by family-owned and managed firms

The diamond cutting and polishing industry presents a remarkable case in the field of family business in India. It provides an interesting landscape to view and investigate, as its distinguishing characteristics include unique features and approaches to management practised by the family firms that dominate the scene.

Indian industrial scene

February 1, 2002

Dabur India Ltd is undergoing the challenging transition from family management to professional management, while staying true to the legacy and traditions of its founders

The headquarters of Dabur India Ltd stands just outside New Delhi, on a crowded road lined with a variety of old buildings and undeveloped land. Almost as if leaping centuries into the future, you come upon a few tranquil acres of sloping, landscaped lawn and garden, in the middle of which is a silver and glass tower that would not be out of place in California's Silicon Valley. Completed in 2000, the building stands as a symbol of how far Dabur India Ltd (Dabur) has come in the past century.

February 1, 2002

Philanthropy plays a large role in the lives of many family businesses. Through their foundation’s schools and hospitals, the Murugappa family has demonstrated their commitment to Indian society

Why do business-owning families engage in philanthropic activities, and why do such activities take on such importance? When the Murugappa family accepted the IMD Distinguished Family Business Award at the gala dinner celebration in Rome in October 2001, fourth generation Mr Murugu explained:

February 1, 2002

2001 IMD award winners, the Murugappa Group, have drawn upon their business acumen, heritage and faith in the family system to help them successfully adapt to change

The Murugappa Group, headquartered in Chennai (Madras), India has grown from humble beginnings to become a very important conglomerate. The company started as the dream of a driven entrepreneur in Burma in the early 1900s. Today it boasts revenues of US$850 million and employs 22, 500 people in its 27 business units. The company is presently undergoing a major change, as it restructures its family governance system. It realises that change is necessary if they want to continue to compete in the world marketplace.

February 1, 2002

In this issue’s guest editorial, Dr Manesh L Shrikant examines the Indian family business scene and the challenges it faces in achieving future growth and prosperity

The landscape ofIndian family managed businesses (FMBs) is in a state of disequilibrium, even turmoil, as evidenced from certain performance paradoxes given in Table 1, on the next page. Analysis is not easy and future prognosis is even more difficult. However, by examining the evolution of India and its businesses, it is clear that certain challenges must be met for Indian businesses and India as a nation to move forward and prosper.

The business context

February 1, 2002

The evening of Friday, 5th October 2001 in Rome was warm and sultry, reminiscent of long summer evenings in the capital.

The evening of Friday, 5th October 2001 in Rome was warm and sultry, reminiscent of long summer evenings in the capital. The plazas were full of people in their finery absorbing the history and beauty of the capital along with the food, wine and culture that is distinctively Italian and so typically Roman.

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