Five distinctions of a family firm that executives must remember Photo: iStockPremium Janmejaya Sinha Family businesses differ from others in significant ways that recruits must understand if they’re to have rewarding careers Share Via Read Full Story Three hundred of the top 500 companies in India are family businesses. The promoter families typically own and manage these companies, or, infrequently, sit as activist-investors on their boards. Many of these companies are large, and most of the large ones are listed. Yet, the context and working environment of family businesses is different in some key respects from that of non-family businesses. The reason for the difference is simple enough: Much of the family’s wealth is tied up in the family business. As a result, even though many of them are listed, quarterly results are less important to them than long-term survival. They intrinsically think generationally, unlike a chief executive officer (CEO) of a non- family business with diversified ownership, where quarterly results often drive management behaviour. This is a powerful difference between the two. The other big difference is the influence of family dynamics on the business. Senior executives in family businesses must appreciate five implications of this distinction: