As a business grows, they start splitting like an amoeba and very few of them survive beyond the second or third generation.
Studies have shown that sibling rivalry is the main cause for families and businesses splitting in India. According to Bloomberg Business Week, about 40% of family owned businesses in the US enter the second generation while only 13% make it to the third generation. This number is even lower in India.
A few years back Professor K Ramachandran of ISB did a study that looked at Indian business families that survived three generations and are now into the fourth generation. These families are Dabur, Murugappa, Kirloskar, Wadias and the Godrej Group. This study is an eye opener as it shows that just a handful of families and businesses have survived three generations.
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