- Teaching Notes
Two childhood friends in Kolkata, India, Radhe Shyam Agarwal (Mr. Agarwal) and Radhe Shyam Goenka (Mr. Goenka), gave up their lucrative corporate jobs and started a small personal care business, Emami, in 1974. Starting with a small capital of INR 20,000, Emami had grown to INR 1.8 billion in sales by financial year 2013–14. After initial hiccups, Emami tasted success within three to four years of commencing its business. Along with business growth came the challenges of professionalization and governance. Emami brought in several functional experts from the outside and professionalized the business operations. By 2014, Emami had built a large product portfolio that included Ayurvedic formulations and nutraceuticals. Though Emami Limited, the personal care company, continued to be the flagship business, the group had also diversified in areas such as paper, real estate, and construction. Hence, on one hand, the business complexities had grown significantly, while on the other hand, the founders were getting older and had to deal with the challenges of family governance and succession. Succession was quite challenging because their children had grown together with similar qualifications, experiences, and performance records, and it was difficult to choose one over the other. Yet the founders had to make a succession decision soon to ensure sustainability across generations.