Founded in 1910 as money lending firm in Burma (now Myanmar), by Diwan Bahaddur A M Murugappa Chettier, then spread to Malaysia, Srilanka, Indonesia, and Vietnam. In 1930’s the business was moved back to India, to Chennai. The business passed on to Second generation - 3 sons of the founder, then to 3rd generation- 6 sons of second generation. By Feb 2018, Mr. A. Vellayan, a 4th gen member of the clan, stepped down as chairman, ceding the spot to his cousin M.M. Murugappan (Current Executive Chairman) while the 5th gen has taken up different roles across functions and businesses.
Businesses: 28- businesses -9 listed companies –Abrasives, Auto Components, bicycles, Sugar, Fertilizers, Plant- Presence in 13 states and 5 countries. The major companies of the group include Carborundum universals Ltd, Coromandel Engineering Ltd, EID Parry (INDIA)Ltd, Tube Investments of India Ltd. Gross revenue Rs.36.893 crs (USD, $5.3 bn), revenue conglomerate controls by the Murugappa family.
This group is one of the 3rd large family businesses in India which is continuing without any splits since the founder’s time. The other two being Dabur and Godrej. The group has been awarded with IMD Lombard for its Family business excellence.
- Original shareholding continues-determined by founder at Second generation i.e. 1/3 for each family branch irrespective of members in the branch.
- Only male members are involved in business.
- Conflicts resolution - Family head’s last word.
- Younger generation has to undergo rigorous internships outside of their family business.
- Director ships for family members- qualifications, merit, to work one’s own way.
- Life style- modest/comfortable.
- There is a bill of rights and responsibilities, values and beliefs.
- External facilitation and consultants from the very early stages.
- Mentoring younger generation - Corporate governance - Murugappa Holdings – governed by Murugappa Corporate Board (MCB). A non-family executive N.S. Raghavan was appointed as executive chairman, for one term.
- Retirement age was fixed as 65 years for founder’s family members.
Secrets of success-
- Ownership clarity : at second gen 3 sons @ one third to each family branch of male descendants. The female decedents are kept out. This gave clarity. Leadership roles change in a clear and unselfish way.
- Adaptability :The Murugappas manage the evolution of their businesses and governance structures very deliberately. The make-up of their portfolio is very dynamic. Governance adjusts to family and business circumstances. Early constitution of MCB, with 4 family members and 3 independent directors. Attention to governance system from very early stage.
- Philanthropy :The Murugappa Group and family continue to build on the example of philanthropy initiated by the founder. Sisters and wives are the major sources of leadership and guidance in the family's foundation and the institutions (schools and hospitals) it has founded and supports.
- Transition and re-organization :They strive to introduce change without disrupting performance through an atmosphere of openness and support. They draw strength during change from their heritage and values. The whole transition is on meritocracy and value driven.
- Family Development :The older generations focus on developing the talents of the younger members, as professionals, through academic trainings, International experience, family mentors, and a career path that provides broader experience.
- Entrepreneurial Spirit:Each new generation of the family has received the existing business as legacy and developed several new businesses.