The transition challenge in family and business: a case study of KL Bricks

The case aims around transition and threats to survival in a brick kiln family business. Second, it stimulates an understanding on the need toward collective decision making by the family during the maturity stage of the family business. The purpose of this paper besides addressing entrepreneurship is to examine the “family-ness” in a family business and its benefits, the transition management issues and to understand the difficulties in handling conflicts during succession and transition cycle in a closely held family business.

The case is based on primary research, which is exploratory and secondary information followed by testing the case several times. To authenticate information, multiple sources of information with individual interviews both structured and unstructured at different levels have been used in a time frame of over one year.

The competency of the business purely lies in the quality of the product, utilization of market opportunity, harnessing capability, honesty and complete involvement in business. Undoubtedly, the family business has reflected growth but its existence in near future is doubtful due to certain exogenous uncontrollable factors, such as restriction by government regulation. The subsequent generation desires to actively participate in the family business. However, it is constrained by the new government regulations and the business life cycle. Thus, the family is reluctantly compelled to start focusing on newer alternatives or business ideas. Transitions, both in business and in family, have posed a challenge to the founder. Should the family continue in the same business with added constraints or the next generation starts building on a new idea as an option and spin-off from existing family business? These are scenarios for trade-offs.

The case is restricted to transition in business and in family, within a traditional family business of brick kilns. It is about a strategic choice impending with the founder and his siblings. Interpretations may be connected with related family businesses; however, riders exist, as different firms falling under different industry verticals undergo unique scenarios.

The outcome of the research-based case study shall assist entrepreneurs in the brick kiln industry to understand transition issues and challenges imposed upon due to changing government regulations.

Implications exist for practitioners who may like to anticipate conflict arising due to transition and have mitigation techniques in place.

The case is original, while the new generation is looking to switch or diversify the business.