Indian ethos of “Vasudhaiva Kutumbakam” ( world is a family) and “Janani Janmabhumischa Svargadapi gariyasi” ( mother and motherland rank higher than heaven) complement rather than compete any leader’s world vision, whether it is business, politics, sociology, governance or any other domain. Vivekananda is said to have inspired JRD Tata to produce indigenously rather than going for easy imports. Further, he is said to have been the inspiration behind starting IIS (Indian Institute of Sciences) at Bangalore, the premiere research body in the country today. Modern Management Schools work with the concept of Globalisation as one fundamental tenet. Yet they are not upto the vision of Swamiji when he said, “Even in politics and sociology, problems that were only national twenty years ago can no more be solved on national grounds only. They are assuming huge proportions, gigantic shapes. They can only be solved when looked at, in the broader light of international rounds.”
In this background Yale University’s news publications that “Lack of managers keeps India’s businesses small” requires a careful look at their approach and understanding of the situation. It says, “The study, published in the American Economic Review, uses a novel model to compare the relationship between the efficiency of outside managers and firm growth in the United States and India. It shows that the lack of managerial delegation factors significantly into why businesses in India tend to stay small and has wider implications on the country’s economy, constraining innovation, economic growth, and per capita income.” It further says that “The researchers found that India’s economy suffers from “a lack of selection” — the process of creative destruction through which successful businesses expand while unproductive firms close or are swallowed up by competitors — allowing unproductive businesses to survive because successful businesses do not expand.“
Perhaps there is some merit in this argument if one looks at India which supports positive discrimination, but like reservation, these factors have complex historic as well as present day nuances. In his book “Cast as a social capital”, Finance Prof R. Vaidyanathan develops certain themes on ‘caste and entrepreneurship’ and argues that support comes from caste groups acting as social capital. Entrepreneurs hailing from particular castes like Gounders, Marwaris, Chettiars, etc. set up businesses with caste members as workers and funding source. Hence, capital constraints seem to be a more pressing issue than accepting unproductive managerial skills.
On the other hand, Indians are increasingly occupying top positions for most of the well run US Tech, Financial and other companies. It is said however that taking up American Citizenship is must for any foreigner before he or she is allowed to occupy top position in any of the US firms.
Perhaps this analysis would have focussed more on capital availability as a principal component to remain closer to reality in India. As the USA needs top brains from India and the rest of the world to keep the economy vibrant and growing, Indian businesses need capital to unshackle through various constraints and thrive globally. Saying this, with exponential increase in the number of Unicorns in India, clearly points out that an appropriate business environment is available now here under leadership of PM Modi and India is on its way to excellence.
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