Case Study 3 – Case Study for non-involvement of family members

Introduction

In a country like India where the concept of family managed business is more evident than anywhere else in the world. Some of the most famous and successful family managed businesses exist in India like Tata, Birlas, Ambanis etc.

These are very large in size but the major chunk of Family Managed Businesses is in the SME’s. One such case which springs to mind is that of company who are big trading house, a company engaged in supply & distribution of engineering goods all across India.

Scenario

(Lack of involvement of Family members)

Being a FMB, most of the members of the family were a part of the management; each one responsible for certain process within the organization. The business instead of flourishing started showing signs of ageing. The first sign was the decrease in the turnover and declined service level. The business was unable to achieve the planned turnover, this clearly reflected in their customer satisfaction which was obviously dipping steadily & fast. This was an alarming scenario as an organization operating in the service industry cannot afford to have dissatisfied customers.

As most businesses would approach this situation, a meeting was called to review the scenario and develop a solution. Through a series of meeting it was found that the managing members did not have a clear mission & vision. Also, it came to light that some family members were overburdened while others did not have much work at their hands. Some family members also had their own style of conducting the business and some were voluntarily inactive. This has also resulted conflict in the setting the directions and delegation for senior managers and their associates. No business or its management wants to be in such a situation.

 

 

 

Solution Implemented

This is where all members put their foot down and decided to implement an MIS. Firstly, the MIS gave a clearer picture of the perceived catastrophe. The major issues as understood were lack of clear definitions of roles and responsibilities among the family members. This led to defining of roles and responsibilities of each family member which led to accountability. Also, the non-involved members were given their own roles and responsibilities which meant that all members of the family were now involved in the management towards achieving the mission and vision which were now defined and clearly communicated within the organization. The family members themselves defined their role and taken the ownership of various processes which helped in defining MIS.

Outcome

(Customer satisfaction, Involvement of Family members, expansion, turnover)

Since all members now started contributing, the business started showing signs of resurrection. The business witnessed a growth in customer satisfaction, serviceability, the planned turnover was achieved and most importantly, all members were now active and contributing towards the growth of the organization.

 

 

The organization is now gearing up to implement a high end ERP, they have also planned to acquire a new warehouse and office. They are also planning to do backward integration in manufacturing the engineering products in India. This was only possible due to the advantage of measurability of input and output provided by MIS.