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ABSTRACT The Indian state makes Indians business houses, to overcome basic constraints and succeed with what we have we have to innovate and improvise. This article will describe how the Indian Business and its entrepreneurial spirit play an important role in India’s growth. The article discusses the challenges – corruption, terrorism, and unfinished economic reforms — that India faces and their impact on growth on Indian Business houses. The Joint Family Structure, a peculiarly Indian phenomenon, has powered the success of many Indian businesses. But that success has, in turn, been enabled by the broad sweep of economic liberalization in India. That success will continue only if the reforms continue and if the risks that could derail the growth — terrorism, political corruption/stalemate, stalled reforms and growth that focuses only on the urban rich – are contained. We will learn what needs to be done to maintain business as usual. KEYWORDS Business, Joint Family Business; Challenges; Entrepreneur INTRUDUCTION Before 1991, Indian business success was a function of ambition, licenses, government contacts, and an understanding of the bureaucratic system. Decisions were based on connections, rather than the market or competition. Pre-1991 policies were inward looking and geared towards the attainment of self-reliance. During this era, for the Business houses, the capital was limited and India had very few success stories. In 1991, the Indian government liberalized the economy, thus changing the competitive landscape. Family businesses, which dominated Indian markets, now faced competition from multinationals that had superior technology, financial strength and deeper managerial resources. Thus, Indian businesses had to change their focus and re-orient their outlook outward. A few existing Indian
Under this structure. which formed the backbone of the economy. performance and sustained growth. There are exceptions: Some large family business operations of sizes exceeding several thousand crore. The mentor's job is to hand-hold and facilitate a system of intense learning. tenacity and continuity. businesses and families were intertwined though they were also distinct entities with separate rules. Post liberalization. Mentoring is an effective tool that organizations use to nurture and develop their top family managers as well as to groom the next generation. survival of the family became synonymous with the survival of the business. Liberalization. needed to evolve and become more institutional. generations lived and worked together under one roof. Nevertheless. teamwork. The impediments appear to be arising from inadequate understanding of corporate strategy and a lack of focus on family governance.business families adapted to the new economic policy while others struggled. on metrics of financial stability. I explain the changes that family businesses would have to make below. typically Rs 1. have had to deal with issues emanating from lack of governance while there have been cases of a very high order of governance being demonstrated by smaller players. one that focused on ICT (Information and Communication Technology) and created wealth for owners and employees. competitive environment. using the Indian mythology trinity of creation. if they were to extend their life cycle. Challenges before Indian Business Houses – Family Businesses -It is well-known that most large Indian family businesses have outperformed traditional non-family companies. family-managed businesses. however. reaffirming the Weberian values and trust that have built successful businesses. continue to grapple with challenges related to managing growth within the country and outside. changed the very nature of the joint family. to use experiences as a learning tool through case examples. In the structure.000 to Rs 2. such as the erstwhile Satyam Computer Services. The family managers at top functions need a sounding board when trying to audit proposals and help resolve relationship management issues between family and non-family managers. a new breed of business was born. Below. the family would have to re-orient itself to compete in a global.000 crore companies. preservation and destruction. Wealth from the businesses supported the joint family by providing a social safety net for members. Importantly. including several MNCs. Companies like VIP . many Indian family businesses of medium size. Hence. IT businesses succeeded because they were customer focused and professionally managed. If large Indian businesses were to succeed. success had come from the close-knit joint family structure that fosters family values. The old. For the old business houses.
and harms values openly espoused by all. The difference between Europe and India is that Europe is a continent with independent countries while India is one country that has united many divergent countries. Another aspect of family business governance is the need to have a professional and harmonious relationship between family and non-family managers. and must earn the respect of their non-family colleagues through their achievements and strategy and sincerity of purpose. Sensitivities concerning emotional bonds can be major impediments to implementation of good governance practices. Today. Similarly. auditing performance and sharing experiences. . setting goals. globalization. But emotions will have to be addressed and cannot be wished away.” It can be stated unequivocally that terrorism creates uncertainty and delays investments in any country. only the best within the family must be assigned responsibilities. I have seen some very capable managers leaving a company for just this reason. the formulation and implementation of a corporate strategy becomes much simple and sustainable. mission and values. institutions.Industries and HRH Group (a major chain of luxury hotels in Rajasthan) have successfully used the mentoring tool. Once this is achieved. which destroys relationships between non-family and family managers. we need to comprehend a country’s culture. A very important aspect of Indian family businesses which does not emerge as important elsewhere is the issue of family tradition and culture. The Indian culture is tolerant and can deal with differences.As per Wikipedia. television. ethos and value. The essential elements of mentorship in family business include facilitating. coaching. India has the second-largest Muslim population in the world. However. religion and history. These must under no circumstances be conflicting with family traditions. This attitude could erode the value of an organisation rapidly. “Terrorism in India is primarily attributable to religious communities and Naxalite [militant Communist Group] radical movements. constitution and its past response to terrorism to consider and assess its fate. but we have learnt to absorb and assimilate them into our society. about a third of Indian family businesses address this issue against maybe a tenth a decade ago. Terrorism -. as Hinduism absorbed their teachings. Buddhism and Jainism had their roots in India but only traces exist today. Foreigners have invaded India. Culture is rooted in myths. upbringing. Culture is a broad-based word but a powerful concept. They may display arrogance. There can be no defined family governance process unless there is 100 per cent ownership and commitment to an organization’s vision. Many family businesses in India suffer from the display of what is loosely called the malik attitude of senior board members from the family.
However. from electricity to labor and land … They [1991 reforms] freed markets for products. The foreseeable future will be characterized by coalition politics. religions and languages. Economic Reforms -. The political parties have evolved to address their needs and give the minority groups a platform and a voice that are heard at the national level. An important area of reform is the power sector. but India has the experience to manage the political processes and differences. Indian’s response to the November 26th 2008 terrorist attack in Mumbai was balanced and restrained. transmission and distribution. hence. If we are to continue to maintain the growth trajectory. I am confident that. ports and bridges. It will be easier for the government to address and repair old infrastructure through public private partnerships.” [The Economist. it is a positive development. roads. Indians’ frustrations were channeled through the Gandhian leadership of Anna Hazare. These are difficult political decisions and coalition politics will make the process slower and difficult. irrespective of the coalition government (lead by either BJP or Congress). As evidence. Corruption could be viewed as one of the challenge for Indian Business houses. as no industry can achieve a successful transformation without sufficient power. the process is slow and driven by the political process.The Indian culture is also resilient and able to respond sensibly to any terrorist activities. Overspending on the Commonwealth Games and the Department of Telecom’s under-pricing of 2G spectrums resulted in heavy losses for the exchequer.Growth needs to continue and India needs “… another dose of reform. This is a reality. It is unlikely that either of the two major political parties – BJP or Congress – will win a majority. . given India’s history and behavior. We need investments in power.India is a complex country with myriad castes. India is going through a structural — not a cyclical — change. aimed at markets for inputs. and bring in slow pace of economic reforms. This is why the Indian government needs to push through the reforms on power generation. the market for inputs needs to be liberalized. we have stayed the path of liberalization. It is evident that a coalition government slows the reform process. that. July 2011]. Political Risk-. we will remain united as a country.
.Following is the chart of critical business challenges: Conclusion: I believe that it varies according to one’s viewpoint. it is essential that the Indian government address issues of corruption and continue with the next phase of reforms to accelerate the decision-making process. The Indian Business houses have shown their ability to adapt to the changing economic environment and deal positively with the uncertainties in the market place. It is difficult to dampen the Indian entrepreneurial spirit. Reform will continue but at its own pace. the economic reforms will also have to continue. It has grown and competed in the global market despite the controls of the Indian government. Hence. Yes. the joint family structure – the spawning ground for entrepreneurs – continues to evolve and compete effectively in the world market. I have observed that companies that have taken risk and stuck to a sound business plan succeed in India. But if that success is to be sustained. Politics is the biggest challenge.
com.REFERENCES: www.businesstoday.M.P’S Karmaveer Adv.economictimes. www. N.co. Deepali G Mane. Nashik-013 Lecturer (MBA) deepali_3395@yahoo.V.in 9764800058 .com Author Name Organization Designation Email Id Contact no Prof. Baburao Ganpatrao Thakare.D. College Of Engineering.
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