It’s Reigning Women

Family businesses in India are witnessing more and more women are taking over companies

Today women are fast taking the place of sons in running the family business empire. According to the American Family Business Survey, the number of female CEOs has doubled every five years since 1997. The survey indicates that more than 24 percent of the businesses currently have a female CEO or president, up from about 5 percent in 1997. The growth should continue as 31% of those surveyed indicated that they may have a female successor.

More and more daughters are also inheriting the family business in India. An Indian School of Business (ISB) paper on ‘Women in Family Business’ points out that currently women entrepreneurs make up about 10% of the total entrepreneurs in the country. This percentage is growing every year and is likely to reach 20% of the entrepreneurial force in India in the next few years.

In India the trend of daughters inheriting family businesses picked up steam after 2005 when the Hindu Undivided Family (HUF) succession norms were amended and girls were allowed to inherit equal shares in family businesses. The Hindu Succession (Amendment) Act of 2005 removed gender discrimination with regard to inheritance in Hindu joint families. Previously, only the male line, to great-grandson, had inheritance rights.

Perhaps the biggest change in the past couple of decades has been the increasing importance of educational qualifications. A growing emphasis on education has helped to raise the status of women in family businesses. Many have also worked abroad before returning home to take up jobs with the family business. Education and exposure have led to greater societal acceptance of women participating in family business. A few are also foreign educated waiting in the wings for winning top jobs in their groups.

Prof K Ramachandran, of Hyderabad-based Indian School of Business (ISB), was quoted in the media saying that “There is a huge change in attitude toward girls, with the number of children in any family coming down. Families sometimes have only one or two girls. I do not say that it is new found love for daughters but realization of an opportunity to share parental wealth among all children independent of gender.”

However, women today are challenging the stereotype assumption that men are the best and most qualified candidates for taking over the family business.

Speaking at the CII-FBN India Chapter XV International Convention on Family Business held in New Delhi recently, Dr Annelie Karlsson, Executive Director, FBN Sweden, said, daughters are becoming more and more influential in the family businesses. “Despite young male members to take charge of the business, many of the young female members are becoming the heads of business,” she concluded.

Sustaining Economic Growth & Development – Creating an Equitable & Strife Free Workplace

Industrial progress plays an important role in the growth of the Indian economy. Some of the key factors necessary for sustaining economic growth and development through industries are – Adequate Infrastructure, Access to Capital, Trade Liberalization, Competent Personnel and Amicable Industrial Relations.

Given with workplace disputes over the past few years, on the rise, the need for amicable industrial relations has achieved critical importance.

Industrial relations deals with the relationship between workers of an organization and its management. As workers form the largest section of the employed workforce, and represent a significant part of the social strata, industrial relations has a far reaching impact on the well being of workers, societies and nations. In the context of the manufacturing industry, the key stakeholders typically involved in industrial relations are – Primary: Government, Employers, Workers and Trade Unions, Secondary: Industry Bodies and Society. The role of trade unions has evolved since their inception centuries ago. Today, trade unions work towards the Economic, Social and Intellectual progress of workers.

The CII’s 5^th IR & HR Summit, brought together thought leaders from the public and private sector, civil society, trade unions and the government to share their opinion sand debate on three crucial perspectives which underpin the theme of ‘Sustaining Economic Growth & Development: Creating an Equitable & Strife free Workplace’.

The debate themes were:

• Do equitable and just practices at the workplace make Unions redundant?
• Archaic and inflexible labour laws create strife at work place
• Bad practices of management or opportunistic practices of union leaders – Who is more responsible for criminalization of trade unions?

The discussions led to the conclusion that amicable industrial relations is a collective responsibility of all the stakeholders, and that it is in their best interests too.

The desired role to be played by the primary stakeholders and the gap existing today can be understood by evaluating the Intent, Framework and Execution of these stakeholders.

This analysis leads to the following immediate steps to be taken by the stakeholders:

• Organizations to mete out respectable treatment to their workers, and ensure meeting of all the hygiene factors, through a positive organization culture
• Workers not to misuse the labour laws meant to protect them, and trade union leaders to act as moderators between the employer and workers
• Government to create strong deterrents for mala fide acts by either stakeholder, and review labour and other related laws to promote fair treatment

Additionally, a round-table can be convened comprising industry bodies, trade unions and the government to discuss and deliberate on the key emergent issues. While these steps will address the concern and control further disputes, the need in the long run is to identify a cure. One of the approaches to achieve the same is to equate the factors of engagement for white and blue collared employees with the management. Today, the basis of engagement of blue collared employees with the management is Protection. It is important to transition this to Performance, which is the basis of engagement of white collared employees with the management. In other words, the purpose and function of industrial relations and human relations should be aligned, not distinct. This equity is the desired objective of all organizations employing workers, as workers will continue to be better connected, mobile and more aspirational and soon be no distinct from white collared employees.

Click here to download the Report on Sustaining Economic Growth & Development – Creating an Equitable & Strife Free Workplace