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First-Generation Entrepreneurship’s Dilemmas and Prospects – A Case of Hemlata Foam House

CASE STUDY, ENTREPRENEURSHIP & STARTUPS
Prin.L.N. Welingkar Institute of Management Development and Research, 9 Pages
AUTHOR(S) : Dr. Rachana Patil, Assistant Professor and Vineel Bhurke, Assistant Professor - Prin. L. N. Welingkar Institute of Management Development & Research

Case Preview

First-Generation Entrepreneurship’s Dilemmas and Prospects – A Case of Hemlata Foam House

 

It was May 2011; the early pre-monsoon showers at Amaravati, India, made Narendra Patel (Patel) look outside his shop. He was in a reflective mood. As first-generation entrepreneur, he had been successful in his business of selling foam mattress. His 2011 annual turnover was INR 15 million and he was considered as one among the top five businessmen of the city. It took im 32 years of hard work to build his business to this level but now he was worried about the future of his business. He had two daughters who were settled and happy in their married lives. None of them wanted to steward his business. Patel spent many waking nights worried of his successor after him for his business.

Brief History

Patel entered the business as a first-generation entrepreneur in the year 1979. He belonged to a farming family with orthodox value system. On completion of his post-graduation in commerce, he decided to start his own business. With no business degree or background, it was only his strong desire that led him to take this decision....

Learning the Game of Business

The seed capital for the business came from his father’s savings, but that was not enough to sustain the business for long. At the beginning, he faced problem in raising the capital. Being a first-generation entrepreneur, it was hard to gain trust of people to finance him. No one in his family or his friends belonged to the entrepreneurial background, so he could not get help or guidance from anyone. He had to do everything on his own. There were days when he himself worked overnight just to save INR 10 instead of spending it on labour cost. He could afford only two full-time employees.............

Start of The New Family

In May1982, Patel got married to Pratima. She had lost her parents very early and was brought up by her uncle. She was a very bright and career oriented girl. she expressed her keenness to continue education but Patel’s family was reluctant and ultimately she had to forgo further education. In June 1983, they were blessed with a baby girl. Patel was very happy experiencing parenthood. Everyone in his family was glad. In this way three years passed, meanwhile Pratima was expecting again............

Facing the Challenges: Professional and Personal

Just after a few years, Patel’s family members once again insisted on having a baby boy. As they were thinking that it is only a son who will take forward their family’s name. But Pratima did not want a child anymore. Patel somehow convinced Pratima for the same. Entire family was excited about the birth of the third child, but Pratima delivered a baby girl once again. Entire family became anxious after getting the news. It took the family members quite some time to accept the fact as their destiny.............

Entry of A New Protagonist in The Business

Patel’s cousin Suresh who was just a year younger to him was jobless. He was single; he just completed higher secondary education. Suresh’s mother approached Patel and requested him to get her son involved in his business. He felt that being the elder cousin he should help him. As the business was scaling up, Patel also needed support, he decided to involve him in the business. When Pratima came to know this, she got annoyed and insisted to change his decision but Patel was not ready to do that..............

Sailing the Waves of Business Success and Personal Loss

While things started to look more or less settled, another heart-breaking event happened in Patel and Pratima’s life – they lost their youngest daughter in a fatal road accident. It was the saddest day for the whole family. Patel and Pratima became more conscious about safety and well-being of their other two daughters after that accident. Patel never refused to fulfil any of their wishes.............

What Makes People Change?

Over a period of time Suresh’s attitude after observing Patel’s progress in the business. He started feeling that the progress of the business was only because of him. He aspired to become an independent businessman. So, he started asking some irrational favours from Patel. However, Patel continued to fulfil Suresh’s ever-increasing demands. But Suresh never understood the true feelings of Patel. This continued for a couple of years while Suresh’s behaviour worsened day by day..............

The Unending Dilemma

One day Patel met with an accident. Both his daughters rushed to support. But no one was at the shop apart from the employees to take care of the business. At that time Patel realized that if he moves away from the shop even for a few days, the entire business would collapse. Generally, in India family business was taken up and run by the owner’s son but Patel had two daughters. Both daughters loved him very much but as they were already well established in their life so
they refused to take over his business....................

Exhibits

Exhibit I: Indian Scenario in PU industry

Exhibit II: PU Foam Industry

Exhibit III: List of Products Offered by Hemlata Foam House

Exhibit IV: Global Scenario in Polyurethane (PU) Industry

Teaching Note Preview

First-Generation Entrepreneurship’s Dilemmas and Prospects – A Case of Hemlata Foam House

 

Synopsis

Narendra Patel (Patel) was a first-generation entrepreneur from Amravati District of the Indian state of Maharashtra. He started his shop Hemlata Foam House (HLFH) in 1979. He was very optimistic and upfront about his vision – to be a successful businessman. He had faced many challenges in life – personal as well as professional, but those never wrecked his aim. He achieved his goals with his constant efforts as he reached the pinnacle amongst the top businessmen in the city with a legacy of more than 30 years in the business. Both his daughters were married and well settled in life. They did not want to take over their father’s business. Patel was getting older. As he was envisaging the future, one thought was disturbing him constantly – who would be his successor to lead his business after him?

Case Positioning and Setting

The case is designed for business students at the MBA or executive MBA levels in entrepreneurshipand family-managed business courses.

Learning Objectives

  • • Identify the factors contributed to the growth of Hemlata Foam House (HLFH) from a small shop to its present form and the challenges faced by a first-generation entrepreneur in setting up a venture
  • • Understand Patel’s value system with reference to Schwartz’s model and how it affected his business decisions
  • • Critically evaluate succession issues of HLFH
 

The case allows students to examine how entrepreneurs expand business at the time of limited opportunities. The case demonstrates the interplay between the external environment and the leadership initiatives of the entrepreneur and the relevance and challenges involved in family life which create hindrance for business. The case highlights Patel’s value system, his leadership style and the succession dilemma.

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Abstract

The case study enables the participants to examine how entrepreneurs expand business at the time of limited opportunities. The case study demonstrates the interplay between the external environment and the leadership initiatives of the entrepreneur and the relevance and challenges involved in family life, which create hindrance for business. Narendra Patel (Patel) was a first-generation entrepreneur from Amravati District of Maharashtra, India. On 5th May 1979 Patel inaugurated ‘Hemlata Foam House’ (HLFH). He was very optimistic and upfront about his vision – to be a successful businessman. He faced many challenges in life, personal as well as professional but those challenges never wrecked his aim. He achieved his goals with his constant efforts and became one of the top businessmen in the city with a legacy of more than 30 years in the business. Both his daughters were married and well settled in life. They did not want to take over their father’s business. Patel was getting older. He was envisaging his future and one thought that disturbing him constantly was – who would steward his business after him?



Pedagogical Objectives

  • To identify the factors contributed to the growth of HLFH from a small shop to its present form and the challenges faced by a first-generation entrepreneur in setting up a venture
  • To understand Patel’s value system with reference to Schwartz’s Model and its effect on the business decisions
  • To critically evaluate succession issues of HLFH

Case Positioning and Setting
The case is designed for MBA Program/Executive MBA Programs in courses that deal with Entrepreneurship and Family-managed business



This Case Pack Includes:
- Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
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