A perspective for business leaders
| A piece of criticism could be that whereas Rao's definition of management covers many fields, he has concentrated only on business management. But his bias is understandable because the subject of management is universally associated these days primarily with the management of businesses. |
| Rao begins the history of business organisations in India with the British East India Company. He moves on to the development of the managing agency system in India, which persisted even after India's independence, and concludes with the emergence of board-governed, professionally-managed corporations working towards international standards of corporate governance. Amongst these he analyses differences in government-controlled, family-controlled, and other corporations. |
| Rao's account of the piece-meal unshackling of Indian business from government control, which began even before the 1991 economic liberation, is useful to understand how the best Indian firms have developed deeper domain knowledge than firms in any other "developing" country, and how therefore they are able to compete internationally now. Indian firms were compelled to learn to perform under constraints and thus developed their strong management capabilities. Carlos Ghosn of Renault-Nissan, on his recent visit to India, commended the "frugal engineering" capabilities of firms like Mahindras and Tatas that give them their competitive strengths. He also observed that Indian managers were great learners. |
| The third strand in Rao's account is the development of management education. Management schools have mushroomed and the products of India's best schools are accepted internationally. However, Rao regrets that concepts of management taught even in our best schools have remained "imported" by and large, whereas there is need to develop concepts that would fit our Indian context more effectively. For example, business models to create markets at lower income levels and to reach into ill-served rural areas, rather than waiting for the middle class to grow and modern infrastructure to develop, could enable businesses to grow faster while also fuelling the growth of economic activity and incomes at the bottom of the pyramid. Perhaps, like our best Indian firms, our management schools must develop abilities to innovate by experimenting and learning new ideas that will enhance their contributions to India's progress as well as give them a special place in the international management education industry. |
| Given Rao's good definition of management""getting people to work together""it is not clear why our management schools should consider the extremely high salaries that some of their students get on graduation as evidence of the quality of "management" education they provide. The high salaries go with jobs that have hardly anything to do with managing people. The highest salaries are offered by investment bankers who want smart calculators to model numbers on computers, not to manage people. It is worth recalling here the words of Prof. Dorit, the legendary teacher at the Harvard Business School many decades ago. He would admonish his class, "Gentlemen (and they were entirely men in class those days), either make it or sell it""do not just keep track of it." Unfortunately, management graduates earn the most bucks today for tracking and analysing information rather than for managing people and creating real stuff. |
| The character (and the capability) of any society is formed by the interaction of several institutions. Hence institutions that compose a society must be seen together and not in isolation. The concept of "India Inc" has crept into the public debate in India. India Inc is woven together by government policy, the evolution of business organisations, and management education in India""strands that Rao puts together. Therefore his book provides a valuable perspective for leaders in these institutions. It should provoke them to take a systems' view from which a pattern may be observed and points for intervention seen. |
| From Servants to Masters The evolution of professional management in India |
| S L Rao Global Business Press, Delhi Price: Rs 395; Pages: 426 |