Culture’s influence in Family Business – Continued

What defines culture?

One of the primary and most important influencers of family business culture is the founder or Karta. He is the head of the institution and breathes his own value system into the entity he has created.

Second, the people in the business, especially the founding team and the core management team are critical influencers of culture. They bring their own personalities, values and biases to the business.

Next, organization culture also depends on the external environment. Just as an individual is shaped in part by the society he / she lives in, a company’s culture is also shaped by the culture of the environment it operates in.

Further, the very nature of business might demand a particular kind of culture in an organization. For example, companies that work predominantly with young people deliberately try to foster a collegiate culture (BPOs, IT).

Many times, the immediate circle of influencers are the associates, friends, peers and advisors that engage with the company and its people at various levels.

Finally, the core family behind the family business is a key determinant of the culture. Any changes in the family structure and any new developments including marriages, relocations and so on can significantly impact the family business.

Culture impacts perpetuity, succession, professionalization, profitability, revenues, dividends, productivity and growth. Founders would do well to invest time in building a conscious culture that would reap manifold dividends as the company grows.

Read more:

6 ways to build your family’s human capital 

When culture changes…


Keywords: culture, DNA, iccha, kriya, jnana, shakti, karta, external environment, influencer, profitability, revenues, productivity, profits, professionalization, society.

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