Succession Planning in Family Owned Businesses

Succession Planning at Ranbaxy – Family Drama, Corporate Style

Succession Planning in Family Owned Businesses

The case discusses the CEO succession planning controversy at Ranbaxy Laboratories Limited (Ranbaxy), India’s largest pharmaceutical company. It describes the concept of succession planning and its importance in managing large companies (especially family owned businesses). The case describes how and why Parvinder Singh (Ranbaxy’s promoter, also CEO) believed in running the business professionally and handed over the company’s management to D S Brar (Brar), a professional (and a non-family member), amidst stiff opposition from family members. The case then details how Brar transformed Ranbaxy from a small Indian pharmaceutical company into a research based global pharmaceutical major.  It examines the reasons for Brar’s decision to step down as the CEO and comments on his succession plan. The case concludes with a discussion of whether Ranbaxy’s promoters would take over the company’s management or continue to allow professionals to manage their business.

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