What’s a Household Enterprise Administration programme? How is it totally different from an MBA?


How a family business management program can help transform a business into a modern sustainable business

Family businesses make up 85% of Indian businesses and contribute a significant part of the country’s employment and domestic production. However, the survival rate of these companies through to the third generation is around 13% and furthermore drops to 4%. Interestingly, this is not only the case in India. A Cornell University study shows almost the exact rates for family businesses in the US.

Family business management programs grew out of the realization that succession planning and modernization were urgently needed, but that every possible solution had to work in its unique structure and requirements. As a training facility for future owners, this program differs from a traditional MBA. Instead of focusing on developing professionals, they are guided from a business prospect’s perspective. The aim is to convey a holistic transformation so that they can transform their family businesses into modern, sustainable companies.


The two biggest challenges for family businesses are governance and succession planning. Based on multi-generational ownership, they are characterized by the family’s absolute control over the decision-making process. Many of the older, established family businesses often have a complex management system that is influenced by the dynamics of the owner family. While the foundation of history, long-term commitment, and family relationships have the potential to create extremely resilient companies, in reality these factors can also cause their downfall.

Family conflicts, denial of modern practices, lack of succession planning and increasing competition are just some of the factors that threaten their long-term survival. In India, they are often led by a powerful patriarch and have a firmly anchored, self-structured framework that is difficult to break. But with the advent of globalization, more and more such companies are expanding across borders while facing intense competition in their own home markets. This has created an urgent need for new leaders who can transform these businesses into modern businesses.

Holistic approach

A family business management program uses unique methodologies to make students aware of the importance of the family business, their role as future entrepreneurs, and the challenges they may face. This can be implemented through several measures, for example by tapping into the alumni network in order to gain valuable knowledge. Interactions with others who have faced challenges in the transition provide invaluable insight into the roles of family members, the challenges of introducing change, and the balance between relationships and business.

Students are also trained in various aspects of business etiquette and social norms to help them understand cultural nuances in dealing with international clients and opportunities abroad.

In a globalized world where new startups and international companies have emerged to threaten the longstanding position of legacy players, family businesses need to change and renew their ecosystem. It requires a restructuring of well-established organizational structures through innovation, market expansion across international borders and the urgent incorporation of modern management practices.

The author is the director of the Pravin Dalal Center for Entrepreneurship & Family Business Management, NMIMS Deemed-to-be-University