Leadership in Family Owned Organizations

The main focus of the study is on the role of entrepreneurs, progenitors, patriarchs and leaders in the family owned organizations. The family ownership and membership, being the family history relational dynamics, familial structure and the role processes into the organization. The role of the leader or owner in an organization is influenced by the family dynamics in the social setting as well as by the issue of inheritance and succession. This paper focuses on two kinds of leadership roles in family owned organizations: 1. The progenitor who has two or more generation of family ownership/leadership succeeding him and 2. First generation professional entrepreneurs and leaders who founded the organization in the last one and a half decade in the beginning 1980s. The data used for the study has been collected through open ended interviews and from people who have been associated with the organization for the past 20-30 years and have been in association with the leaders. The open ended interviews were conducted on the leaders who may be first, second or third generation, owners/inheritors and successors heading the organization. The conclusions drawn from the study were that: 1. From the first generation of individualized personal charismatic leadership there is a movement to a concept of collective leadership of the organization. The Organization has grown from small to medium to large and mammoth and global. There are also those organizations and leaders who have become stagnant, decayed and disintegrated at the second generation. 2. From a homogeneous social ethnic group several generations have flowed in with a diverse heterogeneous group of people with diametrically different expectations, ambitions and aspirations from the self, others and the system. A dynamic leader and an organization has created coherence and convergence amongst groups of people to evolve a collectivity in the organization. Those organizations which have not evolved a coherent community experience attention either in the older group of experienced loyal people or younger generation of professionally trained people. 3. Structural change and redesign: From a personalized structural leadership based on ownership and larger than life identity of the individual subsuming the organization identity there is move to a design of formal structure with corporate structure, roles and processes. Structural redesign is followed by management and business systems with boundaries, linkages, responsibility, authority and accountability. In the absence of the relevant processes with the newly designed structure there is confusion between organization and the individual and the rest are only doers and implementations with the total accountability in only one person at the top. 4. Leadership, vision and values: From a family owned and managed organization there is a distinct and perceivable move to professionalization of leadership, management practices and managerial roles. The organization invests in the development of human resources in the organization to upgrade management knowledge, attitudes and skills. In the absence of this investment many organizations continue the mediocre or poor performance and eventually loose out on challenges and opportunities of growth. 5. Institution building and organization growth: Organization which has grown from business acumen of one person with socio-cultural familial organization culture now moves with the times to respond to global challenges and opportunities. The traditional culture is added innovation and creativity anchored in performance and excellence. Institution building processes are introduced anchored in philosophy and values so that simultaneity of idealism and progeniatism, belonging and excellence, and human concern with performance are focused upon.