This companies ranges from 34% to 100%. It

This
is the case of a family that has built a successful business empire over four

generations.
Started in the early 1900s by Dewan Bahadur Murugappa Chettiar as

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money
lender and trader, the family-governed Murugappa Group is the one of the

largest
business groups in India, with over Rs 35 billion in sales and over 23,000

employees
as of 2004. The third and fourth generations of the family are successfully

managing
the loose confederation of several companies and a number of SBUs that

form
the Group. The family believes that business is a means to serve the society
and

have
contributed immensely to the society.

Headquartered
in Chennai (Madras), the Group has a diversified portfolio with strong

presence
in Sanitaryware, Fertilizer (Phosphatic), Abrasives, Automotive Chains,

Cycles,
Steel Tubes, Car Door Frames and Neemazal (Bio-products). Apart from

this,portfolio
consists of IT enabled services, Financial Services including Insurance

and
Plantations. It has 38 manufacturing locations spread over 12 Indian States.

Family
ownership of the companies ranges from 34% to 100%. It has several overseas

technology
collaborations.

Each
of the seven flag-ship companies of the group was headed by a family member

As
CEO, with no formal interaction among the companies as a Group, but only

informal
consultations among family members. Male family members (women do not

join
business) start their career as junior executives, and depending on their

performance,
move up in the organisation. They are mentored by senior family

members,
both on business and family values.

In
1991, with the opening up of the Indian economy, the family felt it
advantageous to

be
a Group in a more formal way and officially constituted a Murugappa Corporate

Board
(MCB), composed of family members. The new competitive environment

required
speedier and more flexible Group business portfolio decisions than could be

made
when individual family members were emotionally involved in separate

business
units and focused on their individual company’s day to day management. It

was
hard for the Group to make a business decision to restructure, downsize or sell
a

division
or unit, if that entity was a favourite of a brother or cousin running it. Even

when
all family members wanted to make positive business decisions for the Group as

a
whole, they could not make decisions as nimbly as required in the new
faster-paced

global
economy.

In
September 1999, ownership and operational management of the companies were

separated
for the first time. The process of restructuring was not easy, the cousins

came
together and successfully transformed the Group. CEO leadership of the seven

individual
companies switched from family members to professional non-family

managers,
all promoted from within. The five family members who had headed the

seven
different companies moved into a shared office suite at headquarters and

became
full-time directors of the newly reorganized nine-member MCB. They were

joined
on the MCB by three appointed independent outside board members and the

Group’s
non-family CFO.

The
Chairman of the restructured MCB was M V Subbiah. However, after leading the

process
of transformation and stabilisation of the new governing structure, Subbiah

stepped
down to bring in the first non-family Group Chairman. While the

reorganization
of the business was complete, cousins of the fourth generation are

grappling
with the challenges of creating a family constitution and process for

deciding
future leadership of the Group.