Why The Tatas & Infosys’ of India Need To Learn Something From The So-Called Inefficient Public Sector

By Anusha Majumdar

The talk of the town nowadays seems to be regarding the boardroom brawls of corporate behemoths like Infosys and the Tata Group.

Looking at the kind of controversies these corporates are inciting, we implicitly start doubting the continuity of these institutions, solely because the founders of these mammoth establishments are failing miserably in passing on the fundamental values to the future generations. Why is that so? Let’s take two considerably strong examples to prove our point.

THE TATA- MISTRY FIASCO

See the kind of mystery surrounding Mistry’s unceremonious removal from all the Boards of Tata group companies. This is the last thing one can expect from a group of such a high stature like Tata.

Ratan Tata brought Cyrus Mistry about four years ago. Mistry, another Parsee and related to the Shapoorji Pallonji group, is known to be a professional to the boot!

In fact, Mistry is the first outsider, not related to Tatas, to be appointed. But his removal, the ugly boardroom battles, public spat, allegations of impropriety saddened everyone of us. After all, that’s the last thing we all would expect from such a premiere institution.

 

Ratan Tata With Cyrus Mistry

Following Mistry’s removal, Ratan Tata again took the helm of the affairs from his retirement. One common bit that emerged was that Mistry had failed to carry the business as per the ethos is known as the hallmark of Tatas.

 

THE SIKKA SCREW-UP

Similarly, another emerging battle is that of Infosys. Founded by stalwarts like NR Narayana Murthy, Mohandas Pai, Nandan Nilekani, the mantle was passed on to Vishal Sikka. It took about four years for the honeymoon to be over!

Allegations of impropriety in the form of UNREASONABLY HIGH SEVERANCE PAY, HIGH SALARY TO CEO, and HUGE AMOUNTS OF UNDEPLOYED CASH have surfaced.

 

Vishal Sikka

The founders have come out strongly against their own appointee. We haven’t yet seen the last of it!  The boardroom battle is going to get murkier. These two examples have a common thread. Differences broke out AFTER the original founders left the management.

Are our Private Sector corporates incapable of passing the values and ethos seamlessly to next generation?

The answer seems to be a strong YES!

You shouldn’t be surprised if I say that these Private corporates have to learn a lesson or two from the Public Sector. Take State Bank of India, for example. It’s been around for the last 210 years and still going strong, operating on the same values!

There are other formidable organizations too.

Allahabad bank (1865),

Punjab national bank(1895),

Survey of India(1767),

Indian Army(1895),

Indian Railways(1853).

In fact, Punjab National Bank and Allahabad Bank were in the private sector for a considerable time prior to nationalization!  Yet, they were able to perpetuate the value systems.

They all continue to run on the same value systems they were created on, and stood the stringent tests of the times! The Indian corporates should perhaps take a leaf from the above companies. They should put in place a framework which can stand the change in incumbencies so that the values can be perpetuated forevermore without such fallback.


Image Credits: Google Images

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