Family Business: Handling Unplanned Succession

Abstract

R. N. Dalmia Agencies (P) Ltd. (RND) was founded in 1984 by Nam Niwas Dalmia who passed away in 2014. The business was subsequently taken over by his son Ramesh. RND is a leading importing and indenting agency dealing in carpet-grade raw wool and mutilated textile waste. Ramesh’s son Aditya, the sole heir of Ramesh, started his own venture in 2009. His business was independent of their family business. When Ramesh suddenly died in 2016, Aditya faced the dilemma of whether to continue the family business or not. Overcoming this loss he finally decides to run the inherited business to the best of his ability along with his own venture. Today, both businesses are doing well in the market. He is at a juncture where the market is favorable and he wants to expand the family business. How could he manage his time and resources, and how does his family factor into this?

The case poses a few unique challenges involved in taking over and running a family business. It addresses key questions, including: how can an unprepared inheritor decide to take over a family business? What skill set must someone possess for such a transition and how can they acquire the right set of skills? The case also looks at how to address the issue of business expansion and strike a balance between family and business, especially when there is only one successor and the business expansion requires family support and trusted personnel.

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