The lessons we can learn from Baniyas

By – Anushka Jain
The word Marwari is being used as a
generic name for Baniyas from Rajasthan.
The Birlas are, of course, from
Shekhawati. There is SwatahSukhay (For
My Own Pleasure), the autobiography in
Hindi of Basant Kumar (BK) Birla, father of
Aditya and grandfather of Kumar
Mangalam. Published in 1991, it is a
remarkable document and much can be
learnt from it if it’s read carefully.

Lesson I: The Marwari Baniya’s company

is controlled through the balance sheet.
Management through accountancy, not
through business administration
Basant Kumar told that he knew which of his companies were well
managed . After this, he met the managers to listen to what was
going on. The undertaking of larger firms took one or two full days
each month . These meetings had three purposes:
 Gave the managers confidence.
 Gave them a window to their views.
 Gave them opportunity to evaluate their capacity and their
character.

After learning accounts from his managers Basant Kumar learnt

how to manage a mill under Murludhar Dalmia and Sitaram
khemka ( both baniyas). He learnt how to operate his
machines. At the age of 70 , he admits his weakness is in
technical matters. He list the following reasons:
 Not enough primary knowledge of engineering.
 Diversified business
 Techinicians worked on this site where he couldn’t meet them
often.
Lesson II: Business is learnt by doing
business.
BK was handed a new assignment along with the mill.
Ghanshyam Das introduced him to a pharamaceuticals expert.
BK and Dr. Perks had to begin a medicine firm. Dr. Perks
surveyed the market and decided it had to be harmonal
drug .This required cow organs, which he obtained from an
abattoir. But after some time the project was suspended for a
couple of months. They had to find another route.The project
ended . Birlas auditor said that accounts was not in order. It
was unacceptable that he had not been careful with the
accounts.
Lesson III: Having no control over the
business is worse than losing the
business.
The Birlas were fiscal conservatives and GD Birla was terrified of
taking debt. GD’s response to BK Birla proposal that they raise
money by issuing convertible debentures. It was a sound policy
written by BK. It gave us slow and solid growth. Government owned
funds wants good shares. Banks also were keen to raise loan money.
After some time Dhirubhai Ambani began building large enterprises.
In 1981 Aditya Birla told his father BK he wanted to expand Indian
Rayon by issuing convertible debentures. GD found out he was filled
with horror and faced his son. BK did not come back again and Aditya
went on his way.

Lesson IV: Conservatism does not

stand still. Know your environment
and where you stand in it.
BK writes in detail how pragmatically the Birlas split their empire
after GD died. There is so much material here. We all can learn from
Baniyas, and take from them what is our culture. Business history of
firms can be a source of pride and learning for employees and public.