JAGSoM

The entry of a second generation at SK Enterprises: challenges and future prospects

pooja gupta

Prof. Pooja Gupta

Assistant Professor, Head Case Development & Interim Chairperson

Panda, R., Gupta, P., & Sethi, M. (2020).
The CASE Journal.

Abstract

Theoretical basis
The case discussion begins with an understanding of Davis’s three-circle model. It then leads toward
the key resources and challenges, by system and development stage as given by Gersick et al. (1997).
After understanding the family business system, the case delves into making the students understand
the circumplex model of the marital and family system. This matrix talks about the flexibility in the
business structure along with cohesion in the family unit. The case then gets into the discussion about
succession and the new generation joining the family business and the conflicts that may arise due to
the same. It might be imperative to bring out the different forms of conflict that may arise in the
family and business system. Researchers have identified three forms of conflict – task, process and
relationship (Mckee, Madden, Kellermans and Eddleston, 2014). As passing the baton would take
place next for this business in the case, the current generation needs to look at the future growth
strategy for the business. Here, the discussion refers to the exploitation and exploration matrix given
by Bergfeld and Weber (2011).

Research methodology

This is a primary data case. The data has been collected from SK Enterprises. Interviews were
conducted to arrive at the issues and challenges discussed in the case.

Case overview/synopsis

This case talks about the dilemma of a first-generation entrepreneur. Jatinder Agarwal was the
owner of SK Enterprises, a light-engineering firm manufacturing bright bars, engine parts and ceiling
fan shafts. He had set up the business in 1984. His brother, Ramesh was helping him in the business.
The business had prospered and grown from a single product manufacturing workshop in 1984 to
two factories manufacturing multiple light engineering products. In 2015, the business was doing
well and both Jatinder and Ramesh were excited to involve their respective sons, Pranav and Sanidh
in the business after completion of their education. The case is about the challenges faced by
Jatinder and Ramesh with the entry of a new generation. Jatinder and Ramesh were working in the
family business with an implied structure where the business was a sole proprietorship in the name
of Jatinder but the decisions were taken by both the brothers collectively. With the entry of the new
generation, Jatinder had to decide how to re-organize the business and avoid conflicts in the family.
He also had to take a decision regarding the future course of strategy, which would help the business
grow further.

Complexity academic level

This case is about the dilemmas faced by a first-generation entrepreneur. The case can be taught in
an “entrepreneurship” course, in a post-graduate MBA program. This case can also be taught in a
family business program as part of the course on “Understanding Family Business – Managing
Paradoxes” or “Building Lasting Family Business – Synergy in Vision, Values and Strategy.” This case
can also be taught as part of a “business strategy” or “human resource management” in MBA or
executive MBA program in the first year.

Link to Article: https://www.emerald.com/insight/content/doi/10.1108/TCJ-08-2019-0072/full/html

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