Is Professionalization a must for family managed textile firms in India: A Financial Analysis

This dissertation focuses on the need of professionalizing family managed firms and it also study’s the financial structure of these firms. To empirically show the benefits of recruiting professional managers, financial comparison of family and non-family managed firms has been done in this paper. The subject firms were opted from the textile sector of India because it is one of the world’s largest sectors, with huge raw material and manufacturing base. Today this sector is highly globalized but it is further organizing itself due to deregulation of world textile quotas in the year 2005. Though this sector has carved out a niche for itself as a facilitator of the country’s economic growth, but still a lot is to be done to face the competition. The study elucidates review of the literature on professionalization of family managed firms and its sources of finance. The importance and concerns of both these issues are also examined. Then both qualitative and quantitative methods are employed to test the predetermined hypothesis. Ratio analyses, surveys, interviews and an internship were conducted by the author to conclude the results. This study is an attempt to compare existing family controlled management structure with innovative professionalized approach. The benefits and dilemmas of both the techniques are analysed. At the end it is concluded that hiring professional managers is a must to achieve growth but control of owners over the firm is equally significant