'Family businesses should lay down rules in advance'

Family businesses in India should lay down good procedures and rules well in advance to avoid conflicts, Adi B Godrej, chairman of the Godrej group said on Wednesday.

He was in Ahmedabad to attend a conclave on 'Family Business' organised by Confederation of Industry (CII).

"The family businesses should be managed seriously. We have formed a family council, which meet twice a year to sort out the issues," Godrej said on the sidelines of the conclave.

When asked about the conflict between Birla and Lodha issue, Godrej said: "The Birlas and the Goenkas divided their businesses a long time ago." However he refused to comment anything on the conflict between the Ambani brothers.

"The family business is the backbone of any country's business or trade and makes a significant contribution in any free economy market. The founding principles of the founder and values of the family are the key ingredients of success in family business," said Farhad Forbes, director, Forbes Marshall and chairman, family business council, sub committee, CII, western region.

"Ahmedabad is the epitome of cities in the world in terms of family business. The concept of family owned business is a old as the commercial enterprise itself and has made significant contributions to the world's economy.

"Some of the largest businesses in the world are family owned businesses. Most of the retail trade, small scale industry and the service sector are run or owned by families," said Godrej.

"Worldwide, over half of the world's workforce depends on family businesses for livelihood. Family business generates over half the worlds GDP too. Stressing the role of family owned business in India he said 95 per cent of the registered firms in India are family businesses and so one can very well understand their role in the growth and development of the nation. For the Indian family business the path to sustained excellence is the one that requires willingness to change, learn and excel," Godrej added.

Over hundred participants from across the state attended the family business conclave and gained meaningful insights to run their family enterprises.