In a previous post, we talked about the nature of boundaries in the context of Indian families. What is true for families is also true for family businesses. The concept of boundaries is especially relevant, since there is very less emotional demarcation between families and their businesses.

There are many kinds of boundaries that play out in businesses – physical boundaries, psychological boundaries, emotional boundaries, financial boundaries, territorial boundaries, authority/ decision-making boundaries and so on.

The common perception is that boundaries are restrictive. Lack of boundaries is associated with freedom in an individual and intimacy in a relationship. In relationships, there is always a tug-of-war between intimacy and independence. One of the characteristics of a family is that there are no (or very less) boundaries between its members.

However, lack of boundaries is not necessarily a good thing all the time. It can create an illusion of trust and intimacy, without the real thing. It can only be an indicator at best and not a cause of trust.

In fact, in organizations, setting good boundaries can help people work together better. It creates territories of competence, demarcates functional areas, enables collaborative efforts and creates a more cohesive structure. It results in clarity – there is less role confusion and drives action.

To be Continued...