Human Capital: The Key to the Longevity of a Family Business

Abstract

Globally, family-owned businesses are the oldest and most predominant form of an enterprise, forming an integral part of the organised and unorganised sectors of free economies. Over the years, with the greater longevity of family businesses in India, there has been a dynamic and strategic shift in Indian families from being ‘family businesses’ to ‘business families’. This shift has come with its own set of challenges, most critical among them being the challenges related to ‘human capital’ for these businesses. The need to balance familial relationships with the pragmatism of business is a unique interplay which creates multiple complexities and inter-related issues for all family members alike. With close to 75 per cent of the Indian workforce employed by family-owned businesses, it is important to dive deeper into the human resources (HRs) function in Indian Family businesses. Our endeavour is to understand the challenges of HRs in a family business and how this differs from larger corporations or non-family businesses.