Is Indian business in the hands of family entrepreneurs’?

This very good article wrote by my friend Mr. K. Raja Sekar of IBS-B School,kochi…thanks a lot Raja for giving your valuable information and insight about family entrepreneurs.

Is Indian business in the hands of family entrepreneurs’?
Recent years are golden years for Indian economy, which had a potential capital inflow from Foreign Institutional Investors and an emerging market, which is the destination for all the developed and saturated markets to print their footsteps for further development in their businesses. However it is true, in the same time, a dominant place occupied in the financial dailies about the partition among Ambani brothers, the two business giants of India. Every Indian to think about, is Indian businesses are in the hands of family entrepreneurs’ only. To support that we have a large set of family entrepreneur’s in their success way such as BAJAJ group, MAHINDRA group, SATYAM groups (now in the control of Mahindra).

When we search in the pages of history we will see traditional based family entrepreneurs. In ancient times we had farmers under the Jamindars control and it has been transformed into other shapes such as trading castes. Nevertheless India is dominated by the trading castes present across the country (It is predominantly the Aggarwals and Guptas in the North, the Chettiars in the South, the Parsees, Gujarati Jains and Banias, Muslim Khojas and Memons in the West, and Marwaris in the East. Of these, the Marwaris have been the most successful.)
In another scenario,the developed economies not surprisingly having a major contribution of their GDP’s by the family entrepreneurs. Like in US 40% of the GNP shared by the family entrepreneurs and 80% of the business people are family entrepreneurs. The private sectors of France, Italy, and capitalist Chinese societies like Hong Kong, Taiwan, and the marketised parts of the People’s Republic of China (PRC) are dominated by smaller, family-owned and managed businesses. In most of the countries of retail trade, small industry and all manner of services are in the hands of the family, from the corner store to the most high-tech manufacturing.
In contrast to that, the industrial revolution started from late 19th century and end up in 20th century have a proof that Germany, Japan and the US were quick to adopt the corporate form of organisation as they industrialised and today their economies are hosts to giant, professionally managed corporations like Siemens, Toyota, Ford, and Motorola. The family entrepreneurs’ has an advantage of decision making process with their integrity, working apart from office time. Though advantages are there, unfortunately these may create in certain problems. To exceed the rules and regulations are a biggest challenge for them to achieve success.
Because of competitive pressures unleashed by the economic reforms, it is beginning to dawn on Indian businessmen that superior companies are built by superior people; that the success of their company depends on their attitude towards men and women of high ability and advanced training. Familial capitalism is not necessarily a disadvantage or a weakness in the global economy. The inability to professionalise – to bring in and retain outside talent, to institutionalise, to separate the family’s interest from the firm’s interest – is clearly a weakness. In the successful exporting nations, family firms have overcome this weakness. In India, they are still grappling with this issue. ‘Does the joint business family have any advantages?’ One is commitment, which in a simple-minded way gets translated into hard work. The other is continuity. As to continuity, it seems to be often a liability rather than an advantage when you can’t replace a family member who does not perform.’ If there are advantages to life and work in a joint family, why indeed have they split up? Bharat Patel, a corporate executive and an astute observer of Gujarati joint families, suggests an answer. ‘When one brother has only one son, while the second one has three, there is an inherent inequality because the second one gets three times the income and wealth of the first. This situation is exacerbated if the single son turns out to be the brightest and a go-getter and takes the family business to glory. He then feels even more short-changed because the rewards are not commensurate with effort.

Our cultures define our fundamental beliefs about how the world works and forms ways in which we interact and communicate with others and develop and maintain relationships. Doing business in a particular nation requires a focus on a multi-dimensional understanding of its culture and business practices. Understanding those differences and adapting to them is the key.
India is a complex country, and those arriving here to do business will discover that the path to success is often, not very smooth. These form the basis of doing business in India as well as closely connected to risks of doing business in India.

In a global perspective of business, the fifth largest economy in the globe, second largest in Asian continent, a 1.2 trillion GDP output of India are showing a new dimension and leads to the reach our former president Dr. A P J Abdul Kalam’s words and many Indians childhood dreams that India a developed country. Though some problems are there in family entrepreneurs’, we should welcome the younger talents from the family and non-family businesses to reach our destination. A new path will always be not fruitful, but if we are able to accept the pains we would be feeling that we could climb more number Of steps. We should develop ourselves to reach our destination; it may be either in family or non-family businesses.

K. Raja Sekar (IBS-KOCHI)

Our Secular/Non Secular India

As per our preamble India is a sovereign, secular, democratic and republic country but can we say is this true as per current scenario and how much we really follow the steps given by our constitution, well in my opinion it is difficult to say yes… isnt?
I am neither a sermon nor a conformist but in my opinion the people are being divided and ruled by politician, as Britisher did with us the change is only with race of people who are running common people.
Now I think Indian are matured enough at least for not going for killing game of each other in riots but politician are very much successful in making a perception of insecurity among these two communities.
Hindu and Muslims are the two most common religions practiced in India, there are 13.4% of India’s population follow Islam or we can say there are 154 million Muslim in 2008. Muslims are one of the backward communities in India with only 4% of Muslims are graduate out of 16% of total Indian population of graduate at the age of 23 years. In 2004-05 urban poverty was 22.8% and in that 38.4% was only covered by Muslims which is greater than urban dalit and adivasis.
In India 54.6% of muslims never attended school in comparison to national average of 40.8%.These are certain facts which force us that do we care for all the religion and caste equally in India. Well these data definitely will force you to think about giving some benefit or reservation to this one of the major section of our population and without uplifting this section we can’t imagine India to be a developed country where every people are educated. Human mind is like a parachute, it works only when it is open so be open minded and don’t get into the trap of politician of divide and rule policy. Think about prosperity with equality because that only can make our nation a developed in true sense.
Jai Hind
Ritesh Ranjan

Hybrid Stainless Steel....New Era in Steel Industry !!

New Era of Steel is at Kickoff
As automobile industries are on fast track demand of all segment of automobile is increased many fold form the last 5 year. According to business today research report automobile sector saw a growth of 18% from 2003 to mid of 2008. After that due to recession it got some speed breaker but still it got a growth of 3% where every sector loses.
This rise in demand have pushed manufacture to demand more steel and to have extra edge they are investing too much on R&D sector for better material for car safety. That gave birth to a new stainless steel that is HYBRID SATINLESS STEEL ASSEMBLY (HSSA).
This HSSA is 50% to 60% lighter than normal 304 or 316 grade of stainless steel and 60% to 70% it can absorb shock or we can say harder. So it would have great use in making body parts of car where weight is biggest constrain with safety. By using this HSSA the car would be safer by 60-70% with its very light weight.
HSSA can also attain very thin thickness of about 20 micron so we can easily give that a many shape by keeping its hardness. It is having a very good deep drawing capability and it is formable too.
In HSSA SS 316 fiber is sandwiched between SS304 grade which give its unique characteristics which is better to any stainless steel grade.

Aluminum is also a good material for making automobile parts but it lacks in strength so HSSA is better than any material found so far with its great ahead.
This HSSA is under research work for finding its exact strength, stress and strain capacity and fatigue in Cambridge University and Volvo is also working on that for its implementation in automobile.
The only negative thing which I see in this material is its cost. Its cost is going to be too much as its R&D cost is going to be very much and its manufacturing cost will also be high. However when technology come it come with another technology for its cheap manufacturing as we saw in computer. I hope that when it will come to market it is going make a new era in steel industry.
Hope you like my work…...please let me know.

IPL.. India's Great Tamasha !!

Why Kolkata Knight Rider is losing?

Building pressure to perform is necessary for efficient completion of work but if the pressure and extra involvement of other factor come it shows negative result as with the case of Kolkata Knight Rider (KKR).
Owner of KKR, Mr. Sharukh Khan is simply failed in his over maneuver move to clinch the IPL title. Sharukh Khan of Red Chilli Entertainment and Juhi Chawala with her husband have invested $ 75.1 million for purchasing players but still they are on a race to get lowest position in IPL ranking. That is something amazing for me.
KKR’s coach John Buchanan came with a theory of multi captaincy theory , but I would say this is cricket where a team play and each and every individual is equally important not only the captain. Captain role is just take decision by consulting form all the team member. So making captain and changing captain simply hurt the sentiments of other team member.
KKR team is not less in any parameter like batting, bowling and fielding but still they are not in run to lift the trophy, it is really ironical where most talented pool of players are playing like Saurav Ganguly, Isant Sharma, Brad Hoodge and many world class player are almost out of the race.
Today KKR lost its 6th game in a row and still no chance of improving in team performance. The main reason for these humiliating defeats are extra pressure and extra involvement of other member who don’t know much about cricket. The failure of this team we can relate to corporate world also as we can’t work under much pressure. If you think that your boss is watching you with his third eye and anytime you can be sacked then I am sure that no one can work under such pressure higher than normal.
Recently KKR coach john Buchanan’s multi captaincy theory was opposed by legend of cricket Mr. sunil Gavaskar but Sharukh khan made a very disappointing remark on him saying “ mind your own business” it is his team and he will handle all its working. That shows how a owner with money power and who don’t know much about cricket play a poppet game with his players. KKR lost many matches but didn’t lose much money as they have many sponsors but still they are going to be in loss this year.
Is this ruining our cricket? Well I think yes but I would also like to say that yes this IPL is giving a good exposure to new talent and money. IPL is also giving a corporate taste in cricket where each player is employee and working under a high pressure. Cricket is no more a gentle man game and the cricket sentiment are tottered now.
What do you think guys? Please let me know.

CORE VOTING SOLUTION

CORE VOTING SOLUTION (CVS)

Vote for India, Lead India, Dot hai to Hot hai , these campaign is for increasing voting percentage of India but the question is does these campaign really works? If it works then why the voting percentage of is decreasing per election? If we see the voting percentage in last four elections from 1998 to 2009, the number of person coming out to vote is decreased from 50.13% in 1998 to 44.13% in 2009. This is not only with Mumbai only because whole of India is facing this decline.

Does this shows that people are now less responsible for the government or they don’t have choice to select form corrupt politician. Well in my opinion this is not the only factor for its declining voting percentage there is major factor which restrict people to cast their vote.

The main reason which restricts people to cast their vote is unavailability of voter registration and voter ID card. Now people are not a permanent resident of a particular state, city or locality. According to job and other factor people of Punjab are in Mumbai now and people of Mumbai are in Punjab and the old voter ID becomes waste for their new location and they can’t vote. Everyone is not Amir Khan and Sharukh Khan who takes flight to Mumbai from US and South Africa to cast their vote. So this becomes impossible for a common people even for middle class which are the major section of India’s population and staying at various parts of India.

If you see the figure of voting percentage only 40-50% vote is castes across India except  north eastern state which is having a very good data of above 70% every election and in Mumbai it is only 44.13% which almost equal to Kashmir. Leaving north eastern state all state have similar figure of voting percentage.

Is this correct picture of india’s hudge population of above 18 is votes 44% , my answer is no. as many are not in the list and many have shifted to other place from their native place. So only 5-10% elects our MP and this is bitter truth of largest democratic country.

I started thinking about the solution of this big problem which is going to rise further and further and I got an idea of  “Core Voting Solution”.

Core Voting Solution (CVS) will be a System Application Program with its central data base situated at any part of India under election commission of India. This CVS will take data of all the Indian people with their proof of identification like DL, PAN card etc and then the whole data will be created and stored in that central data base. Suppose a person moves from Kochi to Mumbai he can vote for his candidate from Mumbai itself for Mumbai candidate by just filling a transfer from online from the election commission website. But for that the person should have being staying in Mumbai from the last 2 years. That will give enough exposure of what that location need and what are the demand of common people there.

 Making everything online will ease the voter as well as election commission. I am not bragging only educated person who can fill the transfer form sitting at home but for uneducated person we can put special camp where they can go and fill the transfer form with the officer sitting there. So if will go to vote from anywhere in India just take out the print of your voter ID with a proper serial number and go to use your right in selecting a proper politician.

CVS will defiantly help in solving constantly decreasing voting percentage and then we can say that our PM or CM is purely elected one form the largest democratic country that is INDIA .

Jai Hind

Ritesh Ranjan

 

Making India of Steel !!

Making India of Steel

Steel consumption is the mirror of a country development and progress. Steel is a basic raw material from a pin to a large industry. Development and steel consumption are two side of one coin. In every industry steel is used in any form, like someone may have a notion that steel cannot be used in pharmaceutical companies but how that company can stand without a manufacturing plant where steel is needed. Every industry needs steel in many forms, from machinery to their expansion plan to their main production with steel. About 60% of steel is used in construction and infrastructure.

You can judge a country or state with its steel consumption, the more consumption more development.

 In the recent past china grown up like a shooting star in this sector during Olympic.  China is producing about 36% of total steel production followed by Japan (9%), US (7%), Russia (5%) and India (4%).

India’s 4 % is almost 53 Million tones which is 11.3 % from that last year and India’s per capita consumption is around 43 kg. if we see India’s stand in steel production stage it is still standing lower to other countries. India’s per capita consumption is at 8^th rank with 43 kg and 7^th rank holding Brazil is consuming around 115 kg. South Korea is smaller in terms of geographical area is consuming biggest chunk of steel (1136 kg).

India’s history of steel production goes back to year 1907 when Tata steel set up its first steel plant in Jamshedpur which is produces about 30 MT per annum. This was not only India’s first steel plan but also the very first in Asia.

India has grown to large extent in steel consumption and production. At the time of independence India was consuming only 1.2 kg of steel but now it is touched to 43 kg. This rise is due to industrialization sector. Earlier India’s maximum GDP was from agriculture sector but now service sector and industrial sector took over the agriculture monopoly of GDP.

Steel consumption is very much effected with service sector and agriculture sector as steel is needed for building offices and many other equipment. So Steel consumption is like mirror image of all the sectors.

As I am doing my internship from SAIL, I got a lifetime chance to know the insight of steel and its market. Now the situation is that my eyes are now made of steel. Everywhere I can see steel and stainless steel in my world and starts thinking about which grade of steel is this ? Why this grade is used? My mind is become a blast furnace which is producing steel all time.

If I start taking my food on plate, I don’t see what is on plate but I start the thinking about the grade of stainless steel used for making that plate. Is it SS 304 or SS 316, then comes to conclusion that no need of SS 316 as SS 316 will be used where to save from halogen chemicals so it would be SS 304. Like that I see knife , it is made up of SS 420 as this is ferromagnetic and very hard and cannot be molded again.

 

There are  many example which I can see in and around my world where I can see a numerous uses of steel and stainless steel from pin to airplanes to large industries.

I never saw that picture of my mind and I can see there is many uses of steel and steel and country development depends on the consumption of steel. Right now India is at 8^th position in consuming steel and there is large scope to increase its demand as India is going to boom in all sectors.

To meet demand of Steel in future we have enough base for its raw material except nickel is imported from other countries which is also comes cheaper because of globalization. So the only thing which we need is to have demand and according to that production. In relation to that  first steel plant in north is started running on 12^th May , 2009 in north east state Tripura, Bodhjungnagar, 12 kilometres north of Agartala  with capacity of 150000 Tons per year. Which is going to cater growing economy of north eastern state and Bangladesh?

Recession is just  a bumper in India’s economy  development road , but after crossing from that India is huge market  and huge   potential of steel and its demand is going to rise further  due rise of all sector. So to match up with the demand we need improved steel plants  and more steel plants in future.

With Regards,

Ritesh Ranjan