Transgenerational succession in business groups in India

This article examines succession-related issues in business groups in India, where they comprise a species of the genus of family business and account for a sizable proportion of the economy. It notes that succession in business groups in India has frequently entailed family feuds and business splits whose effects are not limited to the concerned family alone. Given the enormity of economic and political power of these groups, succession-related issues therein pose serious credit- and governance-related risks. Conventionally, in family business literature, stand-alone firms are the unit of analysis for examining issues pertaining to transgenerational succession. Moreover, most studies have done so within the parameters of a psychoanalytic framework that focuses on the psychology of the incumbent and the successor and their relationships with other members of the family and stakeholders of the firm. This article argues that such a restrictive approach would not suffice in the case of business groups. It acknowledges the emergence and continuance of business groups in the broader context of historical, economic, political, and sociological circumstances of their respective settings. It then extends the psychoanalytic framework and proposes an eclectic and integrative framework for examining succession-related issues in business groups. This article illustrates the use of the framework with reference to the saga of transgenerational succession in business groups in India.