Interview with Professor Pramodita Sharma, University of Vermont, Canada

The mechanics of a family business and the drivers of entrepreneurship are complementary in nature. Every family business is founded on an entrepreneurial vision, and throughout its life cycle a vivid entrepreneurial spirit will allow each generation new opportunities for growth. Professor Pramodita Sharma was born into an entrepreneurial family business in India, which laid the foundation for her passion for family-owned firms.

As with most family enterprises, Sharma’s family was involved in various sectors of the economy. While her grandfather’s generation was largely involved in manufacturing of firebricks, windows, doors, iron works and other construction products, her father’s generation began to transition the business slowly from manufacturing to distribution and wholesale. The current generation is largely in wholesale and distribution, and diversifying furthermore into the retail sector.

Pramodita Sharma herself took to academia and has succeeded in establishing herself as a leading scholar of the study of family businesses. From as early as Sharma’s first year of her doctoral programme, she has been fervently pursuing her passion for the field. Today she is a Sanders Professor of Family Business at the University of Vermont in Canada, the editor of the Family Business Review, Co-Founder of the Family Enterprise Research Conference, and Founding Chair of the Family Enterprise Case Competition of the University of Vermont. As an expert in her field and the author of “Entrepreneurial Family Firms”, Pramodita Sharma speaks to Tharawat magazine about the essential links which exist between entrepreneurship and the family business.

How do you define the relationship between entrepreneurship and the family business?

The concepts of entrepreneurship and family business are complementary. Entrepreneurship refers to something new and innovative in terms of entities, products, services, markets, and systems. And, family enterprises are those wherein members of a family have a significant influence on the direction of the firm and/or are the sole proprietors of the business. Any business begins with a founder’s or a family’s entrepreneurial vision and entrepreneurship continues to play a significant role throughout the family firm’s evolution as it grows and prospers. Of course, not all family enterprises are entrepreneurial and not all new initiatives are family enterprises.

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How can family firms encourage entrepreneurship amongst every generation?

It is important for family firms to foster entrepreneurship throughout their existence. If developmental opportunities and encouragement is offered to each generation to build their entrepreneurial and leadership skills, they find the confidence in themselves to take on opportunities that the external and internal environment offers as business units, industries and economies pass through different life cycles.

Essentially, families and enterprises that are keen on continuing on an entrepreneurial pathway over generations of leaders, product and economic life cycles, provide opportunities to all family and non-family members to build and practise their entrepreneurial leadership skills, at all stages of life. In our book “Entrepreneurial Family Firms”, we provide a list of 25 secret recipes of entrepreneurial family firms. Examples of such recipes are:

  • Understanding the inherent talents and interests of all family members while respecting and treating diversity as a strength and finding ways to incorporate these talents in the growth of an enterprise.
  • Providing opportunities to envision, start, launch, and harvest a new venture.
  • Creating opportunities for different generations of family members to learn from each other and work synergistically.

The Relationship Between Entrepreneurship and Family Business – Complementary Dynamics

How can family businesses transform entrepreneurship into a competitive advantage?

Family enterprises must be profitable to sustain over time. To stay ahead of the competitive curve, not only must they be become adept at exploiting the current markets with their products or services, they need to continuously focus on explorative initiatives that will reap harvest when the fruits of current markets dry up. In short, business families should engage in continuous innovation but all the while make sure the current benefits are being reaped.

Do you believe that the cultural setting of the family business has an influence on the degree of entrepreneurship it demonstrates? If so, why?

Yes, I believe this to be true. However, it is often not an entire country that is equally entrepreneurial. We see pockets of entrepreneurship in each country. At times these pockets are found in the form of a particular community or a few families in it that are entrepreneurial, while at other times it is locational. Both external and internal factors play a critical role for a community or region to become a breeding ground for entrepreneurship.

Do family businesses play a particularly important role in bringing about such entrepreneurship in a region?

Business families are more rooted in the community they operate in than other corporations. Therefore, a vibrant economy and society is in their best interest. Such families collectively change the environment through their expectations for themselves, services and products needed. They are also instrumental in attracting talent into a community by providing employment opportunities. Entrepreneurial talent is nurtured not just by families acting as role models, but quite frequently supporting family and non-family members to launch new enterprises.

Tharawat Magazine, Issue 19, 2013