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Case Study

Ketan Logistics—Charting the Next Route

Navneet Bhatnagar, Kavil Ramachandran, Transportation & warehousing industry, India
Succession issues; Family Businesses; Generation next; Leadership & managing people; Governance; Stewardship;

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Abstract

Rohit Gupta, the oldest third generation member of a family business, has to decide whether to continue working for the business, towards which he has a strong sense of loyalty and responsibility, or follow his dreams and venture out on his own. Both alternatives have strong positive and negative implications.
Rohit jointly headed the Western India unit of his family business, Ketan Logistics Limited (KLL). His grandfather had set up KLL, a logistics provider, in 1986. Over the years, the company expanded its fleet, acquired a license to operate freight trains, and diversified into ocean freight services and the transportation of large industrial equipment and food products. By 2014, it had become an integrated, multimodal logistics provider to business customers.
KLL's operations were divided into four geographic zones, each headed by one of the second generation family members, i.e., Rohit's father and uncles. KLL took several measures to professionalize operations, such as deploying enterprise resource planning (ERP) software, adopting a code of conduct and organizing employee training and workshops.
After graduating from college, all the third generation members of the family, except one, joined KLL. Some of them, like Rohit, had high aspirations and wanted to make changes at KLL, but their attempts invariably met with strong resistance. This led to frustration among some next generation members who had considered venturing out on their own at different points in time.
Rohit also had a business idea, which he shared with his old friend Amit Goyal who also belonged to a business family. Goyal liked the idea instantly and offered to invest in the new venture.
Rohit was emotionally attached to his father and other family members and did not want KLL to suffer as a result of his exit. He also had to consider his own hopes and future. He would not easily get an opportunity again to launch his own venture. Rohit was facing a tough decision dilemma.

Learning Objectives

The case aims to help the audience recognize and effectively manage the challenges faced by family businesses in grooming and nurturing entrepreneurship in the next generation of family members.

How the next generation members can decide whether to join or continue in the family business or start their own new venture.

Recognizing the need for clarity within family about the vision, business strategy & governance with clear policies on ownership & reward

  • Pub Date:
    23 Jul 2019
  • Source:
    ISB
  • Discipline:
    Entrepreneurship & Startups / Innovations
  • Product#:
    1376
  • Keywords:
    Succession issues; Family Businesses; Generation next; Leadership & managing people; Governance; Stewardship;
  • Length:

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