Importance of Socioemotional Wealth in Indian Family Business Group: The Case of Tata Group

Abstract

This article tests the application of the socioemotional wealth concept in an Indian family-owned business group. The focus of the study is the Tata Group and the events that led to the dismissal of its chairman Mr Cyrus Mistry in 2016. Using the case research method, the article analyses the reasons for the abrupt removal of the chairman, who was not from the Tata family. The data were collected from official filings/letters by group firms/officials and articles on the Tata Group. FIBER scale is used to explain the socioemotional wealth of the Tata Group. The analysis establishes that the leadership change initiated by family patriarch Mr Ratan Tata was because of socioemotional wealth reasons, rather than financial performance. Hence, the article provides evidence that the Indian family-owned business groups consider socioemotional wealth more important than financial interests.