DEVELOPING A CONTEXT SPECIFIC MULTIDIMENSIONAL SCALE TO MEASURE THE SUSTAINABILITY OF FAMILY OWNED INDIAN MSMES

Abstract

The importance of the family business is globally visible, contributing approximately 70% to 90% of the global GDP. In India, family-owned businesses (FOBs), particularly Micro, Small, and Medium Enterprises (MSMEs), are dominant, contributing approximately 30% to the Indian economy and employing around 111 million people. Given this significant role, understanding the factors crucial for the sustainability of family-owned Indian MSMEs is essential. This study addresses a critical research gap: the absence of a validated, context specific measuring scale to assess sustainability within this area. The objective is to develop and validate a multidimensional scale specifically tailored for Indian family-owned MSMEs, strictly adhering to the systematic approach suggested by Churchill (1979). Four primary variables were identified: Family Goals, Succession Planning, Family Culture, and Entrepreneurial Orientation, as variables of sustainability. Initial phases, including item generation and a pilot study, demonstrated internal consistency through Cronbach’s Alpha and Confirmatory Factor Analysis (CFA), thus confirming the items’ theoretical coherence and reliability. This process provides a reliable, scientifically developed multi-item scale ready for large-scale data collection, which is useful for academicians and policy makers.