Eponymous heroes | Business in India-survey
Eponymous heroes | Economist.com
Only a few Indian companies are fully ready to compete internationally, with professional managers independent of the owners' meddling. Most Indian business is still in the hands of family firms, and most people take it for granted that this will continue. The boss of a big manufacturing firm, asked at a business conference about succession planning at his (listed) firm, did not miss a beat. The important thing, he said, was not to allow minor relatives—nephews, cousins and so on—to run their own departments or subsidiaries. Much better to set them up in firms of their own and give them contracts. A senior Citigroup executive dealing with smaller firms says these are doing so well they are running out of uncles to lead new businesses.
Most of the companies mentioned in this survey are family concerns. The board of Gokaldas Exports, the garment-maker, includes three brothers and three of their sons. Atul Kirloskar is proud to run a “fourth-generation” company. Both branches of the Reliance family stress their continuity with the “legacy” of the Reliance group's founder, the father of Anil and Mukesh Ambani. Tata Sons is still run by the head of the clan, Sir Ratan Tata. Even Wipro is largely owned by Mr Premji, whose father founded the firm.
Change in culture with exposure to West; shows adaptability?-
It used to be argued that the reluctance of families to cede control of Indian companies prevented them from becoming international successes. That may well be true of many smaller firms. The larger ones, however, are being forced to become more transparent and “professional” by the demands of the stockmarket and of globalisation.
Mukesh Ambani lists four forces that will drive competitiveness in the coming decades, and argues that all play to India's strengths. The first is globalisation, where both in terms of labour (through its own diaspora and through the legions working in outsourcing) and in terms of the capital markets, India is well integrated. The second is technology, where India now plays a part at the cutting edge of global research and development. The third is demography, where the supply shortages reported in this survey should blind no one to the fact that 23% of the increase in the world's working-age population over the next five years will be in India. Where else, as Mr Ambani asks, could anyone contemplate the sort of recruitment his retail plans envisage? Lastly, there is democracy, which might pose short-term obstacles, say to the reform of labour laws, but provides a long-term stability and resilience that China, for example, has yet to demonstrate.
Only a few Indian companies are fully ready to compete internationally, with professional managers independent of the owners' meddling. Most Indian business is still in the hands of family firms, and most people take it for granted that this will continue. The boss of a big manufacturing firm, asked at a business conference about succession planning at his (listed) firm, did not miss a beat. The important thing, he said, was not to allow minor relatives—nephews, cousins and so on—to run their own departments or subsidiaries. Much better to set them up in firms of their own and give them contracts. A senior Citigroup executive dealing with smaller firms says these are doing so well they are running out of uncles to lead new businesses.
Most of the companies mentioned in this survey are family concerns. The board of Gokaldas Exports, the garment-maker, includes three brothers and three of their sons. Atul Kirloskar is proud to run a “fourth-generation” company. Both branches of the Reliance family stress their continuity with the “legacy” of the Reliance group's founder, the father of Anil and Mukesh Ambani. Tata Sons is still run by the head of the clan, Sir Ratan Tata. Even Wipro is largely owned by Mr Premji, whose father founded the firm.
Change in culture with exposure to West; shows adaptability?-
It used to be argued that the reluctance of families to cede control of Indian companies prevented them from becoming international successes. That may well be true of many smaller firms. The larger ones, however, are being forced to become more transparent and “professional” by the demands of the stockmarket and of globalisation.
Mukesh Ambani lists four forces that will drive competitiveness in the coming decades, and argues that all play to India's strengths. The first is globalisation, where both in terms of labour (through its own diaspora and through the legions working in outsourcing) and in terms of the capital markets, India is well integrated. The second is technology, where India now plays a part at the cutting edge of global research and development. The third is demography, where the supply shortages reported in this survey should blind no one to the fact that 23% of the increase in the world's working-age population over the next five years will be in India. Where else, as Mr Ambani asks, could anyone contemplate the sort of recruitment his retail plans envisage? Lastly, there is democracy, which might pose short-term obstacles, say to the reform of labour laws, but provides a long-term stability and resilience that China, for example, has yet to demonstrate.
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