'Extensions of self': Indian organisation theory and its limitation



I watched a popular Indian mythologist expound on an Indian Business TV channel that Indian organisations are essentially different from Western ones. His reasoning is that the Western organisations are supposed to be separate, stand on its own, entities, Indian organisations are extensions of its owners, and hence, not just culturally different but organically distinct too. 

I am sure this is an attractive opinion. In this season of celebration of Indian exceptionalism, what's better to think of a culturally exclusive form of business? Also, one that makes all the idiosyncrasies of Indian businesses look explicable and even desirable! I am sure a lot of this Business Sutra will be sold - I can see many presentations blooming around this central thesis.

Except that, leaving out the soundbites and mythologies, it reflects a profound misunderstanding of both Western businesses and Indian business culture. In fact, the whole premise is based on a false dichotomy, or, to put it more accurately, it invents an 'Indianness' by making up a difference. 

Let me explain: All family businesses in Europe and America, all sole proprietor firms and even many start-ups will fit this description of 'Indian business' pretty easily. In short, there is nothing Indian about a business which looks like an extension of the owner's self! It's just that type of business.

Now, indeed, there are other business types in the West, such as the professionally managed firm. What the Indian mythologist is claiming perhaps is that this type of business does not exist in India, or, at least, that the form is incompatible with Indian mind. One could perhaps find some empirical evidence to back this up. However, I shall claim that this has more to do with the sources of Capital in India rather than an Indian psyche. 

The English colonialism in India managed the banking system in India through a collaborating class of indigenous bankers and moneylenders. This class effectively controlled the money flows for Indian businesses after the independence, and largely done so even after the banks were nationalised. Now that the ambitions of socializing finance have been stopped and reversed, the control of a small group of people on business and money has expanded. Even when a venture capital firm operates in India or other alternative forms of finance is explored, the financial expertise of these small clan of people are called upon. This gives Indian businesses, from start-ups to big diversified houses, a clan character; together with unrestrained personality cult that rules all walks of Indian life, this gives the Indian businesses a different operating approach.

The point is, however, that there is nothing eternally Indian about it. At the bottom of it, it is really colonial, a legacy of control. One wonders why anyone would think this to be a strength, where an owner - and his son - can run his (or her) empire as he wishes. Many Indian corporations, including even the professionally run ones, often operate more like the Japanese Keiretsu, where business clans control most sectors because of their control of money. That business environment neither makes Indian businesses resilient or innovative - many talented Indians would rather take their skills and ideas abroad - nor it serves its investors or employees in India well. However, instead of looking to reform the practices, the current Indian conversation is going down precisely the wrong path - explaining a symptom as a cause and spinning mythological mumbo-jumbo to justify what goes on.





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