ISSN 2278 - 7852
For private circulation only
VOLUME XXII | ISSUE 3| MAY-JUNE 2013
THE MONTHLY MANAGEMENT MAGAZINE
PRICE `50
FAMILY RUN
BUSINESS
90% of world’s top companies are run by families; Indian
businesses have the highest percentage-95%.
"Businessmen the world over may be handing over the
reins to professionals, but for Indian entrepreneurs,
retaining control over the business and passing it on to
the next generation is still the driving passion." This is a
key finding of a new global study on family businesses by
consultancy firm Grant Thornton.
Family Managed
Businesses In India
The Opportunities And The Challenges
Message from the President
Dear Friends,
I come to the hallway point of my Presidency. I am happy that we are seeing better
interactions between members. I am really impressed and energized with the
commitment in the Editorial Team of Indore Manager. This is important for us to build a
viable Indore Manager and also a good IMA brand. As I see the various issues, I must
compliment you on the choice of topics, I find that a lot of them are relevant to today's
India and the challenges we have. In India today the major issues grappling the
management society is of urbanization, digitization of society, of RTI and of
sustainability. The Indore Manager and IMA can only become thought leaders if we
address these issues locally and make society think along these lines.
Last year we took certain initiatives at IMA to make the city understand the role of leadership and thus
create a healthy and professional environment for all. Some of the initiatives are mentioned below and hope
you are taking benefits of our initiatives by your participation and contribution in the different forums,
activities and programs.
• Meeting and interaction with Mr. R. Gopalakrishnan was a rich experience • Onsite learning of Women's
Forum members at Maheshwar at the Weaver workshop • Management learnings from the movies
• Sessions in the Center of Excellence • Workshops got good response in the series of Regular Executive &
Management • Development Workshop to enhance the functional & behavioral skills of your human resource
• Participation of diverse industries to discuss the challenges and sharing the best practices of HR
Our plan for next three months
We are initiating two different programs, conducting workshop in industrial zones at low cost and book
review for book lovers.
Industrial visit for student members.
More learnings from movies and sessions.
I do hope that all readers give their inputs in creating a more dynamic Indore Manager. Kindly drop in your
suggestions in the journey of excellence.
Shamit Dave
President
Message from the Editor
India had been an agrarian society and the joint family system prevailed. The tricks of
the trade were passed through generations within the family. An entrepreneur normally
starts his business, risking capital which has repercussions for the family, should the
venture fail. It is safe to assume that the family is a stakeholder, by default, in any
entrepreneurial excursions. Hence, it’s only natural for family members to engage
themselves in the business.
A family member joining the business comes at no fixed cost and is trustworthy. It is
also natural for a young family member to have subconsciously groomed himself over
the years through dinner table conversations or through case studies. He is a natural
fit in the trade. Imagine who could be better as a teacher than Dhirubhai Ambani for
Mukesh & Anil or Pt. Ravi Shankar for Anoushka Shankar. Acting comes naturally to Prithvi Raj Kapoor clan.
The education starts early.
This issue of your Indore Manager talks about the pros and cons of a family run business, a trend witnessed
globally. Experts like Mr.Parimal Merchant, Capt. B. J. Singh, Mr.Dilip Vasu & Mr.Rohit Gadia share their
research, experience & observation through their articles. I am sure many of us who have family owned
businesses will benefit from it.
We had a little churn in the Indore Manager team where Ruchi moved out to greener pastures as we
welcome Shritika, who will be part of the team. I regret the delay in this magazine reaching your hands.
Until the next issue ... Manage well.
Anuj Kothari
Editor
[email protected]
Registration No. - 52079/90
Editorial
Board &
Team IMA
Editor
Mr. Anuj Kothari
ENHANCING MANAGERIAL 04
EFFECTIVENESS FOR
BUSINESS EXCELLENCE
EK RUKA HUA FAISLA 05
SKILLS FOR RAISING 06
EMOTIONAL INTELLIGENCE
14
THE FACE OF BRANDS 07
Editorial Board
Mr. Mahesh Sharma
Mr. B. P. Inani
Prof. Sushanta Kumar Mishra
Ms. Yamini Karmarkar
Mr. Ranjan Mimani
08
IMA Team
Dr. Rachna Tiwari
Ms. Shritika Jain
Mr. Jaspreet Jeet Singh
Mr. Prakash Mehra
Mr. Sanjay Malviya
Mr. Devilal Purohit
Ms. Kiran Gehani
FAMILY MANAGED
BUSINESSES IN INDIA
17 AN MBA'S DILEMMA FAMILY or OTHER?
Contents
IMA Activities
FAMILY RUN BUSINESS
Designed by
22
12
VB&A
BUILD A POSITIVE SELF-ESTEEM
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26 TEN OFFICE ETIQUETTE TIPS
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WHAT WE CAN LEARN FROM
FAMILY RUN BUSINESSES
28 CEO INTERVIEW
29 TOP TEN MOST POWERFUL
WOMEN OF THE WORLD
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IMA ACTIVITIES
Evolution for Excellence 2013 - 2014
ENHANCING MANAGERIAL EFFECTIVENESS
FOR BUSINESS EXCELLENCE
Tuesday, April 23, 2013
Indore Management Association (IMA) organized its first one day workshop for the
financial year 2013 - 2014. Middle Managers of different organizations attended the
workshop on Tuesday April 23, 2013 at Hotel Country Inn, Indore. The module for the
workshop was, "Enhancing Managerial Effectiveness for Business Excellence" and
the speaker for the session was Mr. Praveen Daryani.
Mr. Pravin P Daryani, the Founder & Mentor of
Powertrain is known to be a trainer with solutions. He
has trained more than 10,000 people till date including
Middle & Sr. Level Managers in Corporate,
Entrepreneurs, Businessmen, Professionals and
Trainers. A man with exceptional leadership qualities, he
is today widely regarded as "The Dynamo". He inspires
his audience, makes training lively, rewarding, effective
and full of fun.
He started his career with BFSI industry with companies
like 'ICICI Prudential Life Insurance Co. Ltd.' and
'Reliance General Insurance Co. Ltd.' where he learnt
the front line sales. He moved over to training with the
renowned insurance giant 'ICICI Prudential Life
Insurance Co. Ltd.' where his next assignment was to
head one of the most performing territories of ROM-Rest
of Maharashtra region.
He started the workshop stating that efficient managers
help in building a successful organization. Enhancing
the skills of managers would help them to grow as an
individual and they in turn would help in the growth of
organization said Mr. Pravin Daryani, a seasoned
corporate trainer, at a one- day workshop on "Enhancing
managerial skills for better Organization". The objective
of the workshop was to provide participants a specific
idea about how; they as managers can influence their
teams.
Mr. Pravin Daryani gave away some important
messages in easily understandable language with lots
of fun and activities like Karela Prayer. He taught how an
efficient manager teaches the team to motivate,
celebrate, delegate, understands the fear elements and
how a manager by being ready for the change can
construct an efficient team. Participants were thrilled on
learning the new concepts like Law of Initiation, Law of
Growth and Ask Questions (AQ) therapy.
He emphasized that there is a big difference between
working as an individual and leading a team. He said
when an individual works alone; he is responsible only
for 8 hours of productivity but when he leads a team of
20, the responsibility of 160 hours of productivity lies on
him.
The companies that participated in the workshop were D&H Secheron, Cipla Ltd., Sigma Chemicals, Ace
Engineering, MDP Industries, Deccan Diesels, Balaji
Group, Alchemy Chemicals, Ruchi Group, Gujrat
Ambuja, Erawat Pharma, and many more.
Regards,
Indore Management Association
TESTIMONIALS
Nice workshop, it will definitely help to improve
personality, way of working and how to lead a team. Keen
to attend such interesting workshops" - Mr. Sanjay Pandit,
MPD Ind. Pvt. Ltd.
“The workshop taught a totally new concept to improve
our professional career and personal life. This was a
fantastic mixture of spiritual and professional concept.”
- Shivmohan Gupta, Ruchi Group.
“Overall a wonderful training which will help me to improve
my skills." - Rakendra Sing Songara, Cipla Ltd.
04 INDORE MANAGER | MAY - JUNE - 2013 “"The greatest discovery of my generation is that human beings can alter their lives by altering their attitude of mind." - William James”
IMA ACTIVITIES
BELOW MENTIONED ARE THE OBSERVATIONS
AND LEARNINGS FROM THE MOVIE-
EK RUKA HUA FAISLA
In this movie, the jury of twelve men is entrusted with
the power to send an uneducated, teenage boy to the
Death Penalty. The crime that the boy is accused to is
killing his father with a knife. The jury is locked into a
small, claustrophobic room, on a hot summer day,
until they come up with a unanimous decision. The
decision that is to decide a boy’s life is to be either
guilty or not guilty. The film is particularly important as
it examines the twelve men’s deep-seated personal
prejudices. These are reflected in the perceptual
biases and weaknesses, indifference, anger,
personalities, unreliable judgments, cultural
differences, ignorance and fears, that are in a position
to mark their decision-making abilities.
• BODY LANGUAGE / DRESSING SENSE
• Different Personalities
Ego
Drama
Power Games
Compassion
“"The most positive men are the most credulous." - Alexander Pope”
• PRECONCEIVED NOTIONS / MENTAL
BLOCKS: ATTACHMENT TO OWN POINT OF
VIEW
• Strong Personality
Honesty
Patience
Courage
Compassion
• Knowing the Rules/Laws/Facts: Done
Homework
• Issue Based Debate
0
Taking a 360 View
Sticking to Core Issue
• PERSONAL ATTACKS / LOOSE COMMENTS/
BLAME GAME/ ACCUSATIONS
• Creative Solutions
• Conflict Management
• Eye for Details
• Experiment / Fear not Failure
• Personal Vendetta / Agenda
INDORE MANAGER | MAY - JUNE - 2013 05
IMA ACTIVITIES
IMA Center of Excellence
A Session on
SKILLS FOR RAISING
EMOTIONAL INTELLIGENCE
Wednesday, April 17, 2013
The session was conducted by (Retd.), Major General (Dr) V.S. Karnik who is a BA,
MSc, MBA, M Phil, Ph.D (Management) & has served the Indian army for 40 years'.
He belonged to the Gorkha Regiment, and has participated in 1965 and 1971 wars.
According to Dr. Karnik, family life is our first tool of
emotional learning.
He stated EI is the factor which is at play when people
with high IQ flounder and those of modest IQ do
surprisingly well.
He gave a slight correlation between IQ and some
aspects of EQ. Emotions get in the way of enhancing our
ability to think and plan, to pursuit training for a distance
goal to solve problems and the its like. EI is a master
aptitude. Hope, optimism and efficacy help in EI side
issues. EI also hinges on the link between sentiments,
character and moral instincts.
According to Dr Karnik, EI components have following
characteristics
a. Independent
b. Interdependent
c. Hierarchical
d. Necessary but not sufficient
e. Generic
He also spoke about Emotional Hijacking, Emotional
labor and relationship between 5 dimensions of EI and
25 emotional competencies.
He explained that emotions play an active, major and
decisive part in everyone's daily life - wife, husband,
children, parents, and adults involved in any career,
06 INDORE MANAGER | MAY - JUNE - 2013
especially who are dealing with people. The leaders deal
with people and they lead people. Hence leadership is
closely connected with EQ. A leader with high IQ but low
EQ will fail but a leader with high EQ but less IQ will
ultimately succeed.
Major. General Karnik explained the effect of EQ in
modern business. He said the business organizations
today are looking for the 21st century leaders, who have
vision, who can manage change effectively in the global
scenario, and have ability to align people. Leadership
style based on EQ has effect on the organization's
climate & on the organization itself. Unless such
leaders have high EQ and high emotional maturity, the
organizations will suffer. A new research has found, six
distinct leadership styles, each springing from six
different components of EQ. Four fundamental
capabilities of EQ i.e. Self-Awareness, Self
Management, Social Awareness and Social Skills in
turn, are composed of specific sets of competencies.
He added, EQ and leadership concept is not the product
of modern or western countries, but, as stated earlier,
this concept was propagated, taught and practiced in
India 8,000 years ago, as is evident from Gita,
Mahabharat, Ramayana and other Indian epics. For us,
there is a need to relearn EQ and leadership concept
and practice it.
“No one ever finds life worth living-he has to make it worth living." - Unknown
IMA ACTIVITIES
IMA HR-FORUM MEETING
Held on 30th May 2013
Theme of the Discussion "Efficient Learning & Development- Responsibility of HR”
Points that were discussed upon:
1. The meeting started with an introductory session with
all the members who joined the forum meeting.
2. There were participations from various companies likeMethodex System Ltd., CapitalVia Global Research Ltd.,
Eicher Engineering Components, Erawat Pharma Ltd.,
Rajratan Global Wire Ltd., Ubique Branding Solutions,
Sodani Hospitals & Diagnostics Pvt. Ltd., Premier
Biosoft (India) Pvt. Ltd., National Steels and many more.
3. Points discussed were:
• ROI of training should be justifying
• Time to time internal and external trainings should be
conducted as both of them are equally required in
every organization
• The impact of training is for a less duration, so time to
time reviews are important to retain the impact of
training
• Trainers & HR should work out a win-win way for small
organizations that hold fewer budgets for trainings
• HR should emphasize more on training for blue collar
employees
4. In the end a conclusion was drawn that external training
agency, HR department and the Top Management need
to come together for a mutually beneficial Model.
IMA Center of Excellence A Session on
THE FACE OF BRANDS
Held on Friday, May17, 2013
The Speaker for the session was Mr. Vinod Bhargav, Founder & Managing Director, VB&A.
Points discussed in the program are mentioned below:
How to make your brand more visible?
For brand visibility and recall value, it's important to
have a face of your brand. People resort to having
human models or brand ambassadors to create right
kind of brand personality for the brand.
Humanly, the brand helps the target audience relate to the
brand, which results in the ultimate objectives being
achieved for the brands.
According to Mr. Bhargav the face for a brand should have:
• Consistency • Singularity
He gave few examples of how to choose the right face for
a brand?
One of the examples he gave, was of Tanishq
Tanishq chose Mr. Amitabh Bachchan as a face for its
brand. Mr. Bachchan's attributes consider well with the
brand personality of Tanishq.
Both have similar traits which correlate well, like
• Credibility
• Trust
• Prestige
• High Quality • Upper Class
He also gave example of Lux, how Lux has used the
same theme running for decades.
“A successful man is one who can lay a firm foundation with the bricks others have thrown at him." - David Brinkley
INDORE MANAGER | MAY - JUNE - 2013 07
Theme Article
CAPT BJ SINGH
Chief Executive
Absolute Training Solutions
FAMILY
RUN
BUSINESS
Breaking the Glass Ceiling
90% of world’s top companies are run by families; Indian businesses have the
highest percentage- 95%. "Businessmen the world over may be handing over the
reins to professionals, but for Indian entrepreneurs, retaining control over the
business and passing it on to the next generation is still the driving passion." This
is a key finding of a new global study on family businesses by consultancy firm
Grant Thornton.
When we hear about family run business, we conjure up the
image of a corner kirana store being run by a mother and
father team or small mechanic shops being run by the father
and handed over to the son.
There is now a feeling that we are heading towards the
closure of the friendly colony kirana store that provides a
personalised service to the cold and unfriendly treatment at
08 INDORE MANAGER | MAY - JUNE - 2013
the chain stores.
The feeling that family run businesses are small is far from
the truth as almost 90% of the world’s businesses in the
advanced countries are run by families that contribute nearly
50% to the Gross Domestic Product.
Family businesses may not be small anymore and with
globalisation, they need to adapt in order to stay afloat.
“You cannot always control circumstances, but you can control your own thoughts." - Charles Popplestone
Some of the top names of family run businesses in the world
are: Ford, Panda Energy International, Samsung, Toyota,
Trump Organisation, Walmart to name a few, while the Indian
scenario is replete with names like, Tatas, Birlas, Ambanis,
Mittals, Premjis, Mahindras, Jindals, Murugappas, Godrejs,
Kirloskars, etc.
Understanding the Indian Scenario
With the Indian economy, striding fast with development and
with 95% family run business from small and medium sized
to large enterprises, it appears logical that with a growing
economy and rising Gross Domestic Product, the business
growth in terms of new businesses entering the fray would be
family run businesses.
The traditional close knit joint family system in India that
fosters a better team work along with the age old value
system of respect for elders and family name, seems to a be
an important ingredient of success in many family
businesses.
Genesis of change
In order to attain economic freedom and as a means of
import substitution, family businesses started in India and
were promoted in the 1890s. As an integral part of the
Swadeshi movement, these family businesses got subsidies
and special treatment from the government. They
consolidated almost all monopolies during the license raj
where their inadequacies were hidden from the market
realities. Indian family run business was always respected
and protected in India. With the advent of the new century,
the era of prosperity that traditional family-run big businesses
enjoyed is coming to an end. Family run businesses are
undergoing metamorphosis due to opening up of Indian
economy to the rest of the world, they need to diversify, frauds
in family run businesses and probably the need for an
unflinching loyalty to family over best business practices.
The family business had to face stiff competition from both
new domestic players and well-established international
players who were laced with better technology and
managerial skills with the advantage of deeper pockets. A
new breed of business emerged with the changing business
scenario. With the manufacturing sector taking a back seat
and service sector coming to the fore along with IT, the
business buzz words changed. The family businesses that
changed, adjusted with the managerial style of the existing
global market.
The service sector brought business directly to the customer
and it had to be efficient and nimble to succeed. Except the
Tata's, no other top family business enterprise ventured into
this sector for a long period. Many big Indian businesses
faced a crisis situation at this juncture, and had a choice of
either changing or perishing. Those companies that adapted
well to the new economic pressures survived while the others
struggled.
What went wrong with the Indian Family run Businesses?
The family run businesses depended on the skills or lack of it
of its own family members and did not bring in outside
professional help. For years, the top management positions
were monopolised by the family. There was no realisation that
running a corporation was a professional business and no
longer could the ill trained and ill equipped family members
take on these professional roles. Most of the
times, the top board and management position was handled
The feeling that family
run businesses are
small is far from truth
as almost 90% of the
world’s businesses in
the advanced countries
are is run by families
that contribute nearly
50% to the Gross
Domestic Product.
by the same person and without a proper understanding of
the roles the very purpose was defeated. Even if professionals
were hired they were expected to be loyalists, who did not get
the expertise of a well qualified and independent board.
The Mantra for Success
1. Set some boundaries- Limit business discussions to the
office
2. E s t a b l i s h c l e a r a n d r e g u l a r m e t h o d s o f
communication- Consider weekly meetings to assess
progress, air any differences and resolve disputes.
3. Divide roles and responsibilities- Big decisions can be
made together, but a debate over each little move will
bog the family business down.
4. Treat it like a business- Lay emphasis on business and
not family.
5. Recognize the advantages of family ownershipAccess to human capital in the form of other family
members can be a key to survival, as family members
can provide low-cost or no-cost labor, or emergency
loans.
6. Treat family members fairly- Pay scales, promotions,
work schedules, criticism and praise should be even
handed between family and non family members.
7. Put business relationships in writing- To avoid hard
feelings or miscommunication, put something in writing
that defines compensation, ownership shares, duties
and other matters.
8. Don't provide "sympathy" jobs for family membersOnly merit based jobs.
9. Seek outside advice- The decision-making process for
growing a family business can sometimes be too closed
10. Develop a succession plan- A family business without a
formal succession plan is asking for trouble. The plan
should spell out the details of how and when the torch
will be passed to a younger generation.
Summing it up
We have the opportune moment to make the right move and
take on the world by following the correct steps for starting
and running family businesses professionally and breaking
the Glass Ceiling!!
“If we did all the things we were capable of doing, we would literally astound ourselves." - Thomas Edison
INDORE MANAGER | MAY - JUNE - 2013 09
Blog of the Month
BUSYNESS OR…
MESSINESS!
Anupam Kher rightly said,
“It is better to go slow somewhere
than to go fast nowhere!”
There are phases in life when you are running around
everywhere! Things are pulling you in different
directions. Clock governs your thoughts and schedule
rules your moves! Hours after hours, you are just filling
the slots of time with activity and more activity. Plans,
people, promises, priorities - everything is stacked
tightly. All is normal to the naked eye, but inside, you
know, you aren't heading anywhere!
In the name of busyness, you are simply a part of
messiness, neither creating value nor adding it! You
can't figure out how you landed here, and are even more
10 INDORE MANAGER | MAY - JUNE - 2013
clueless about how to get out of it! It is such
helplessness as if you are trapped in a traffic jam where it is not your discretion that decides your move,
but the rowdiness of road and the whims of others that
call the shots!
In such a phase, remember you will survive the mess
sooner or later, just don't let it mess you up!
So! Keep your map, hold your compass and find the
envelope on whose back you drew that vision!
It's not over yet.
“Let your Discourse with Men of Business be Short and Comprehensive." - George Washington
Theme Article
PROFESSIONALLY RUN
V/S
FAMILY OWNED BUSINESS
Every business
m a k e s
enormous
contribution to
sustain the
economy, be it
professionally
managed or
family owned
business,
admittedly both
have its pros &
cons and
assorted
fe a t u r e s t o
carry out the
business
process. It all depends on the dreams of the dreamers and
business owners like how they operate and regulate their
business functions.
At first glance, professionally run businesses appear to be
more systematic and process driven as they drive their
business with high goals, vision and values and align
them with their actions. And, when it comes to serving,
they are more of customer centric wherein they look for
emerging needs of customers and transmit robust
mechanisms to augment customer experiences and
relationship. Moreover, in such businesses, ownership is
given to the person who has potential enough with traits,
like mitigating risk and minimizing mistakes in the
business which sometimes, even gets changed, based on
the delivery of performance by the business. Poles apart,
family owned businesses run as per the guidelines of
family members, especially karta of the family. These
businesses are often perceived to be quicker in decision
making as they are more centralized. Here, ownership is
mostly held by the eldest person of the family who rules
the business based on experiences and simultaneously
desires the whole family to follow his footsteps, thereby;
they often resist for undergoing change happening in
business world and as a result such businesses generally
come to an end on its fourth stage. In business approach,
these businesses are more of product centric, their
focused aspect is always more towards introducing new
product, its development and captured market as their
product lines define their businesses identities.
These are the few highlights on which professionally run and
family owned businesses diverse from each other and certainly,
these dissimilarities help the nation in different aspects broadly
and equally contributing in sustaining the economy.
advt.
PROFILE
Rohit Gadia
An Entrepreneur
Founder & CEO, CapitalVia
Global Research Limited
An entrepreneur with sharp business acumen, Rohit, successfully grew CapitalVia over
the years. He is ambitious with clear vision to make his company, The Finest Global
Research Conglomerate by 2020. He prides in his farsightedness, conviction to pursue
his visions relentlessly and being open to learning. He likes to risk high stakes which
make him a better entrepreneur.
Rohit comes from a non-technical background, who offered his services for full-time job
at HP BPO before wearing his entrepreneur cap. He has a Masters in Finance
(Investment Banking and Mergers & Acquisition) from S P Jain - Dubai & Singapore. He
holds a graduate degree from SBM Jain College, Bengaluru. He excelled at campus and
was conferred with first ever "S P Jain Alumni Award for Professional Excellence 2010".
He believes in the fusion of human intellect and technology, creating a better world.
Rohit is proficient in people management, finance, technology, business analysis,
business strategy, negotiation, entrepreneurship and E-commerce. He is passionate
towards his work and believes in empowering his managers by delegating decision
making and authority.
Rohit is an avid reader who travels a lot and is fond of playing chess, table tennis and
Squash. He admires Chanakya, Swami Vivekananda & Sunil Bharti Mittal.
“Change your thoughts and you change the world." - Norman Vincent Peale
INDORE MANAGER | MAY - JUNE - 2013 11
DILIP VASU
Head of School,
Choithram International
WHAT WE CAN LEARN FROM
FAMILY RUN BUSINESSES
To many, the phrase "family business" connotes a small or
midsized company with a local focus and a familiar set of
problems, such as squabbles over succession. While plenty
of mom-and-pop firms certainly fit that description, it
doesn't reflect the powerful role, that family-controlled
enterprises play in the world economy. Not only do they
include sprawling corporations, such as Wal-Mart,
Samsung, Tata Group, and Porsche, but they account for
more than 30% of all companies with sales in excess of $1
billion, according to the Boston Consulting Group's
analysis.
Conventional wisdom holds that the unique ownership
structure of family businesses gives them a long-term
orientation that traditional public firms often lack. But
beyond that, little is known about exactly what makes
family businesses different. Some studies suggest that, on
average, they outperform other businesses over the long
term-but other studies prove the opposite.
12 INDORE MANAGER | MAY - JUNE - 2013
To settle that question, Sophie Mignon, an associate
researcher at the Center for Management and Economic
Research at École Polytechnique, compiled a list of 149
publicly traded, family-controlled businesses with revenues
of more than $1 billion. They were based in the United
States, Canada, France, Spain, Portugal, Italy, and Mexico.
In each business a family owned a significant percentage,
though not necessarily a majority, of the stock, and family
members were actively involved both on the board and in
management. They then created a comparison group of
companies from the same countries and sectors, which
were similar in size but not family controlled. (They didn't
look at Asian companies because so many of them are
family controlled that it's difficult to find a suitable
comparison group). Then they did a rigorous analysis of the
ways in which those two sets of companies were managed
differently and how that affected performance.
The results show that during good economic times, family
“Up is never where you are now." - Belasco & Stayer
Theme Article
run companies don't earn as much money as companies
with a more dispersed ownership structure. But when the
economy slumps, family firms far outshine their peers and
when they looked across business cycles from 1997 to
2009, we found that the average long-term financial
performance was higher for family businesses than for non
family businesses in every country we examined.
The simple conclusion they reached is that family
businesses focus on resilience more than performance.
They forgo the excess returns available during good times
in order to increase their odds of survival during bad times.
A CEO of a family-controlled firm may have financial
incentives similar to those of chief executives of non family
firms, but the familial obligation he or she feels will lead to
very different strategic choices. Executives of family
businesses often invest with a 10- or 20-year horizon,
concentrating on what they can do now to benefit the next
generation. They also tend to manage their downside more
than their upside, in contrast with most CEOs, who try to
make their mark through outperformance.
At a time when executives of every company are
encouraged to manage for the long term, they believe that
well-run family businesses can serve as role models. In
fact, in the research they were able to identify several
companies with dispersed ownership whose strategies
mimicked those of family firms. Those companies also
exhibited a similar performance pattern: below their peers
during upturns but leading the pack in times of crisis.
08. Don't provide "sympathy" jobs for family
members- Avoid becoming the employer of last resort
12 Essentials for Striking the Right Balance
in a Family Business
01. Set some boundaries- It's easy for family members
09. Draw clear management lines- Family members
involved in a business to talk shop 24/7. But mixing
business, personal and home life will eventually produce a
volatile brew. Limit business discussions outside of the
office. That's not always possible, but at least save them for
an appropriate time, not at a family wedding or funeral, for
example.
02. Establish clear and regular methods of
communication. Problems and differences of
opinion are inevitable- Maybe you see them already.
Consider weekly meetings to assess progress, air any
differences and resolve disputes.
05. Recognize the advantages of family ownershipFamily-owned businesses offer unique benefits. One is
access to human capital in the form of other family
members. This can be a key to survival, as family members
can provide low-cost or no-cost labor, or emergency loans.
Firms run by trusted family members can also avoid special
accounting systems, policy manuals and legal documents.
06. Treat family members fairly- While some experts
advise against hiring family members at all, that sacrifices
one of the great benefits of a family business. Countless
small companies would never have survived without the
hard work and energy of dedicated family members.
Qualified family members can be a great asset to your
business. But avoid favoritism. Pay scales, promotions,
work schedules, criticism and praise should be evenly
handed between family and non-family employees. Don't
set standards higher or lower for family members than for
others.
07. Put business relationships in writing-
It's easy
for family members to be drawn into a business startup
without a plan for what they will get out of the business
relationship. To avoid hard feelings or miscommunication,
put something in writing that defines compensation,
ownership shares, duties and other matters.
for your kids, cousins or other family members.
Employment should be based on what skills or knowledge
they can bring to the business.
who often have a present or presumed future ownership
stake in the business have a tendency to reprimand
employees who don't report to them. This leads to
resentment by employees.
10. Seek outside advice- The decision-making process
for growing a family business can sometimes be too closed.
Fresh ideas and creative thinking can get lost in the tangled
web of family relationships. Seeking guidance from outside
advisors who are not affiliated with any family members
can be a good way to give the business a reality check.
11. Develop a succession plan-
family members may be qualified for similar tasks, duties
should be divvied up to avoid conflicts. Big decisions can be
made together, but a debate over each little move will bog
the family business down.
A family business
without a formal succession plan is asking for trouble. The
plan should spell out the details of how and when the torch
will be passed to a younger generation. It needs to be a
financially sound plan for the business, as well as retiring
family members. Outside professional advice to draw up a
plan is essential.
04. Treat it like a business- A common pitfall in a
12. Require outside experience first- If your children
03. Divide roles and responsibilities- While various
family business is placing too much emphasis on "family"
and not enough on "business." The characteristics of a
healthy business may not always be compatible with
family harmony, so be ready to face those situations
when they arise.
“One man with courage makes a majority." - Andrew Jackson
will be joining the business, make sure they get at least
three to five years business experience elsewhere first.
Preferably in an unrelated industry. This will give them
valuable perspective on how the business world works
outside of a family setting.
INDORE MANAGER | MAY - JUNE - 2013 13
Theme Article
FAMILY MANAGED
BUSINESSES
IN
INDIA
THE OPPORTUNITIES AND THE CHALLENGES
Theme Article
Family businesses are the lifeline of India’s economy. Almost 90% of Indian
businesses are family-owned, which makes the rest of the business community
largely dependent on them. Be it as their vendors, transporters, contractors or
distributors; non-family corporations collaborate with family firms on various
levels. Parimal Merchant, Director of the Center of Family Managed Businesses,
S.P. Jain Institute of Management and Research, India, explores in this article
the challenges and opportunities that Indian family businesses face.
Although family
businesses are vital to
the Indian economy,
little attention is paid
unless there is an
opportunity to criticise
them. They are often
accused of a lack of
professionalism, of
nepotism, infightings, and
mismanagement. There is a
famous cliché, which is
quoted frequently and seems
to have been accepted as an
universal truth: The first
generation builds, the second
generation consolidates, and
the third generation destroys
the family business. When
accusing family businesses of
such a short life span it is often
conveniently forgotten that
longevity is an objective difficult to
achieve for any business. In 1982
the book “In Search of Excellence”
by Tom Peters and Rober H.
Waterman listed 62 companies as
high performers. By 1992 most of
them were languishing. Similarly, in
Fortune magazine’s yearly list of top
500 companies; onethird of the
companies listed in 1970 had vanished
by 1983. In reality, survey findings
reveal that the average life of a
corporation in Japan and Europe is no
longer than 12.5 years independently of
whether they are family-owned or not
(Jagdish Sheth, “The Self-Destructive Habits
of Good Companies“). There are many reasons
for short life cycles in businesses, yet, family
“Courage is fear holding on a minute longer." - George S. Patton
ownership is often particularly mentioned. In reality,
however, the contrary is frequently the case: Family
businesses on average not only outlive, but also
outperform non-family corporations. A Morgan Stanley
study shows that family firms generated Return on
Equity of 18.5% as compared to 14.1% from non-family
corporations (John Ward 2007, quoted by Amy
Schuman, FBCG, Inland Press, February, 2010). A
Newsweek (April 12, 2004) study shows that family
firms outperform their rivals in all leading stock indexes
of Europe.
Indian Family Businesses
The majority of Indian family businesses are quite
young. India faced wars in 1962, 1965 and 1971; it was
only after 1980, that the economic environment
became more business friendly. As a result the period
from 1980 to 1995 was one in which a large number of
family businesses were established and prospered.
Many of those family businesses split up over the last
few years due to family differences. There are some
families with large business operations, but the majority
are SMEs. Family businesses have a culture that is often
at the same time entrepreneurial, flexible, paternalistic,
agile and frugal. Since the family’s name is at stake, they
stand for values, long-term commitment, relationship
orientation, and dependability.
Indian family firms are also highly efficient. They often
have to work with limited resources and make the most
out of it. A multinational car plant can get free land from
the Indian government and access to financing from
capital markets, but for the majority of family
businesses each step is a challenge. Yet, they embrace
it with a true entrepreneurial spirit.
Indian family businesses also have distinct advantages,
particularly that of vigilant ownership. The family
owners’ commitment and visibility leads to higher
productivity in the business. Their dedication and
perseverance enables them to extract opportunities
from complex non-routine problems. In addition, family
INDORE MANAGER | MAY - JUNE - 2013 15
Theme Article
firms also tend to be less bureaucratic and can take fast
decisions. Their stakes are emotional as well as
economical and they are likely to look for sustained
value creation. As a result they can move faster with
unconventional logic, can go counter-cyclical and can
reach for new opportunities.
The Challenges
Indian family businesses enjoy various advantages due
to their inherent characteristics and a social culture that
supports their structures. However, these advantages
can be destroyed if the family is not united; as the family
grows, the challenge is to keep a sense of unity. These
are a set of typical challenges that Indian family
businesses face today:
90 percent of Indian businesses are family-owned
18.5, 14.1 a Morgan Stanley study shows that family
firms generated Return on Equity of 18.5% as compared
to 14.1% from non-family corporations
1. The Next Generation
The greatest challenge concerns the gap between
family generations: A business founder is used to doing
everything himself. Thus developed, the unique culture
of the present Indian family business: Inward-looking,
owner centric, smaller scale, with a restricted
perspective, and conservative mindset. This culture
eventually becomes a hurdle in absorbing ‘outsiders’.
The same culture also poses a serious challenge in
absorbing the next generation family members:
Different generations, seeing the world differently are
supposed to work together. It can be a difficult thing as
the young generation is often in a hurry and has big
ambitions, while their elders are more conservative and
skeptical.
The gap keeps on getting wider and wider. When conflict
escalates between fathers and sons, it is often the
mother, who takes the role of CEO (Chief Emotional
Officer). This is a common story in many Indian family
businesses.
2. Attracting and Retaining Non-family Employees
Another possible challenge is non-family employees
joining the family firm: The culture, which has solidified
over time, becomes a barrier for accepting ‘outsiders’.
Business owners are often at a loss as to how much
authority a non-family employee should be able to
attain. In most Indian family businesses stakes are high:
It is not easy to put their own destiny in the hands of nonfamily employees.
Having founded the business, the owner is used to
having insight into all aspects of his business. Allowing
the same insight to an outsider can be hard. On the
other hand non-family employees may also have
difficulties in adjusting to the family business culture.
They are used to structured corporate environments.In
16 INDORE MANAGER | MAY - JUNE - 2013
family businesses that structure may be missing.
It is important that time is bestowed on new
professionals so they can settle. Many Indian family
business owners end up selecting non-family
employees based on their performance in the
corporate world without paying much attention to their
‘fit’ with their own firm’s culture. They forget to spend
time in facilitating the settling down process.
3. Women of the Family Joining the Family Business
Indian family businesses are still largely male
dominated. The role of women in business and
employing women is largely accepted and encouraged
in India. However, when it comes to hiring women in the
family business, there are reservations. Within the
Indian social context of business families, bringing up
the children is considered primarily a responsibility of
the mother. Thus, whenever the issue of women in the
family business is raised, it is subject to her ability to
balance between her duties at home and her duties at
work. However, as more and more women are highly
educated, they are demanding a say in the family
business. The traditional family model is still
disapproving of it, yet The next generation has to learn
to appreciate their parents’ wisdom and understand
at the same time that there is no substitute for hard
work.
increasingly it will have to respond to these demands. It
is only reasonable for family businesses to tap into this
huge source of talent.
The Realities
The Indian business landscape has started expanding
fast. With the involvement of the older generation
alone, such growth is unthinkable. While the parent
generation needs to accept this, the next generation
has to learn to appreciate their parents’ wisdom and
understand that there is no substitute for hard work.
The solution to these challenges requires an
understanding of the family business dynamics and a
separation of people from problems. Family business
members should learn that no one is wrong but that
each generation has a different culture. Once families
learn about these cultures and understand the need to
appreciate different perspectives, whether young or old,
they will be able to harmoniously work with
professionals as well as across generations. Thus, if
family businesses can manage these dynamics, they will
be better placed to reap the benefits of the great range
of opportunities in the Indian economy and beyond.
AUTHOR
Parimal Merchant, Director of the Center of Family
Managed Businesses, S.P. Jain Institute of
Management and Research, India
“Courage is going from failure to failure without losing enthusiasm." - Winston Churchill
STUDENT SECTION
Shreyata
MBA (MS), IIPS, DAVV
AN MBA'S DILEMMA -
FAMILY or OTHER?
“The problem is that when I go around and speak on campuses, I still
don't get young men standing up and saying, 'How can I combine
career and family?”
Gertrude Stein
“To look at something as though we had never seen it before requires great courage." - Winston Churchill
INDORE MANAGER | MAY - JUNE - 2013 17
Indore being the economic capital of state and one of
the most promising Tier II cities today has seen the
growth of many family owned business from very small
to medium, big and huge. Many of these family
businesses have their second and third generations
ready to take over. Donned with management and
other professional degrees, these youngsters are
being groomed to take their family businesses to newer
heights!
I happen to be one such second generation "Would be
professional" presently in a B-school. My dad and uncle
have established a decent enterprise with lots of
potential for future growth. Few days back we were
contemplating the possibilities of me and my siblings
being a part of the business to expand it. Now, that was
little confusing for me! As an MBA, I had been aspiring
to sit for campus placement and get that golden
gatepass to enter a "Multi National Company".
I discussed with my friends and realised that this was
the basic dilemma of students today - to choose their
career options. The common feel was that if you own a
family business, there is no doubt you have been
approached from someone inquiring about your
intentions to work. For many young adults, especially
those in college, there are professional decisions to be
made. They need to choose among the two different
tracks which lead their life ahead, they need to either
go for a family owned business or they opt for a job.
As with any transition in career or personal goals, it is
important to establish goals early in your professional
or academic career. Life goals are important to your
overall career development and, possibly, joining the
family business is one of them. If you are considering
the possibility of joining your family business, the first
area you should address are your skills and how they
relate to the needs of the business.There's nothing like
being your own boss. It's a personal privilege to be a
part of a family business.
To clear the dilemma of thoughts between going for
family business or joining any multinational there can
be a self analysis done which may help to choose a
specific option. The analysis consists of few questions
which need to be answered from the voice of one's
soul.
• Am I listening to my own voice?
• What are my real areas of interest and skills?
• Have I looked fully at my motivations for choosing to
work or not to work, for the family business?
• What price will I pay for choosing to work for the
family business?
Thus, it is apparent that the family business is not the
18 INDORE MANAGER | MAY - JUNE - 2013
only choice. In fact, many career placement
counsellors advise young adults, especially those in
college, to consider other employment opportunities
before joining the family business. As one of my
professors put it, “It's always to learn at the cost of
others (here referred to some company other than your
family owned)"
There is another aspect of it. Family owned business'
have great potential in India. The Indian and world
economy are dominated by family owned businesses,
which generate most of the economic output and
wealth of a nation. Two out of every three listed
companies in India are family-controlled, making India
the country with the highest presence of family
businesses in Asia. The huge potential to create
employment coupled with their long-term vision
enables the family firms make a unique contribution to
the global economy as well as to society in general.
Some of the large family-owned businesses are like
Tata Group and Aditya Birla Group.
Hence, successful people do not see the world in a
Black-and-White Monochrome of either success or
failure. They look honestly at themselves and find
opportunity for growth and learning in their
experiences.
I guess the choice is now much clearer to me.
Family owned business' have
great potential in India. The
Indian and world economy are
dominated by family owned
businesses, which generate
most of the economic output
and wealth of a nation. Two out
of every three listed companies
in India are family-controlled,
making India the country with
the highest presence of family
businesses in Asia.
“To see what is right and not do it, is the want of courage." - Confucius
FINANCE SECTION
Impact of the newly inserted Provision
in Income Tax Act by Finance Bill, 2013
on the real estate sector
Four very important amendments have been made by the
Finance Bill, 2013 to the Income Tax Law which will have
very far reaching impact on Real Estate transactions to be
transacted in the financial year 2013-2014. These
amendments relate to taxing the notional income in the real
estate transactions as against the real income of the real
estate developers as well as the real estate investors.
The impact of these amendments is surely going to be very
sharp and in many cases it might result into big agony and
big tax to many developers and investors as well. Similarly,
the provision relating to Tax Deduction at Source (TDS) on
real estate transactions is also going to pause compliance
related formalities to every purchase of real estate
exceeding a particular price tag. Well, the long and short of
these new provisions is that they would surely impact real
estate transactions during the financial year 2013-2014.
Finally, another amendment relates to granting a little more
deduction towards interest on new residential property
purchased after 1st April 2013. All these new amendments
are being discussed in greater depth in the succeeding
paragraphs so that all those interested in real estate
activities during the forthcoming financial year 2013-2014
can carry out real estate transactions by carefully
understanding tax implications with no problem at a future
point of time.
Circle Rate to be adopted for Computation of Profits and
Gains of Business or Profession
A new section 43CA is inserted by the Finance Bill, 2013
which provides stamp duty value to be considered for the
purpose of Computation of income under the head "Profits
and Gains of Business or Profession in respect of all
transactions relating to land or building or both. This
amendment will have adverse impact on almost all
transactions of real estate entered by all real estate
developers and traders in India because their income would
be computed on the basis of notional income and not the
real income as appearing in the books of account of a tax
payer.
It may be recalled that presently as per section 50C of the
Income Tax Act for all investors deriving capital gain on
selling their real estate assets the circle rate (in case it is
higher than the sale price) or the stamp duty valuation rate
as fixed by the State Government is to be considered as the
sale consideration. The computation of capital gains is thus
arrived at by replacing the circle rate as per stamp duty
value as against the actual sale consideration (in case the
same is higher than the sale price). However, till now, these
provisions do not apply to transfer of immovable property,
which is held by the transferor as his stock in trade.
“It is curious that physical courage should be so common in the world and moral courage so rare." - Mark Twain
INDORE MANAGER | MAY - JUNE - 2013 19
FINANCE SECTION
As per the amendments done, where the consideration for the
transfer of an asset (other than capital asset), being land or
building or both, is less than the stamp duty value, the value so
adopted or assessed or assessable shall be deemed to be the
full value of the consideration for the purposes of computing
income under the head "Profits and gains of business or
profession". It is also provided that where the date of an
agreement fixing the value of consideration for the transfer of
the asset and the date of registration of the transfer of the asset
are not same, the stamp duty value may be taken as on the date
of the agreement for transfer and not as on the date of
registration for such transfer. However, it is important to note
that this exception shall apply only in those cases where amount
of consideration or a part thereof for the transfer has been
received by any mode other than cash on or before the date of
the agreement.
It is a well known and an accepted fact that many times the real
estate developers and all those persons carrying on the
business of real estate sell away some of their stock of real
estate at a price which is lower than the existing circle rate of the
property so as to correct their cash flow or for any other reason.
But now, in view of the above mentioned changes to be made to
Income-tax Law it is expected that great genuine hardship would
be faced by all such persons who are now engaged in real estate
business. However, it is provided in the law that in case the
assessee claims before the Assessing Officer that the value
adopted or assessed by the stamp valuation authority exceeds
the fair market value of the property then the Assessing Officer
may refer the valuation of the capital asset to the Valuation
Officer as per the provisions contained in the Wealth-tax Act.
Income-tax on immovable property received for inadequate
consideration
The Finance Bill, 2013 has amended section 56 of the Incometax Act, 1961 to bring to tax all such properties which have been
purchased by Individuals & Hindu Undivided Families at a price
lower than the Circle Rate. The existing provisions of sub clause
(b) of clause (vii) of sub-section (2) of section 56 of the IncomeTax Act, inter alia, provide that, where any immovable property is
received by an individual or HUF without consideration, the
stamp duty value of which exceeds fifty thousand rupees, the
stamp duty value of such property would be charged to tax in the
hands of the individual or HUF as income from other sources.
Further that the existing provision does not cover a situation
where the immovable property has been received by an
individual or HUF for inadequate consideration. Now as per the
provisions of clause (vii) of sub-section (2) of section 56 provides
that where any immovable property is received for a
consideration which is less than the stamp duty value of the
property by an amount exceeding fifty thousand rupees, the
stamp duty value of such property as exceeds such
consideration, shall be chargeable to tax in the hands of the
individual or HUF as income from other sources.
Sometimes there may be a gap between the date of agreement
for purchase of the immovable property and the date of
registration of the property, in such a situation to avoid the
hardship to the tax payers it is provided that where the date of
the agreement fixing the amount of consideration for the
transfer of the immovable property and the date of registration
20 INDORE MANAGER | MAY - JUNE - 2013
are not the same, the stamp duty value may be taken as on the
date of the agreement, instead of the date of registration. This
exception shall, however, apply only in a case where the amount
of consideration, or a part thereof, has been paid by any mode
other than cash on or before the date of the agreement fixing the
amount of consideration for the transfer of such immovable
property. These amendments are applicable from 01-4-2013
and would therefore be applicable for the financial year 20132014 relevant to the Assessment year 2014-2015.
It may also be noted that in case the stamp duty value of the
immovable property is disputed by the assessee then in such
situation the Assessing Officer can refer the matter to the
Valuation Officer as per the provisions contained in the WealthTax Act.
TDS on transfer of certain Immovable Properties
A new section 194-IA has been inserted in the Income Tax Act,
1961 which provides for Tax Deduction at Source (TDS) on
transfer of certain immovable properties. This proposal has
come into operation with effect from 1st June, 2013. It may be
recalled that similar provision was introduced last year but the
same was withdrawn later on. As a result of the new amendment
greater obligation is now cast on all persons who are purchasing
immovable property in excess of `50 Lakhs.
Under the existing provisions of the Income-tax Act, tax is
required to be deducted at source on certain specified payments
made to residents by way of salary, interest, commission,
brokerage, professional services, etc. On transfer of immovable
property by a non-resident, tax is required to be deducted at
source by the transferee. However, there is no such requirement
on transfer of immovable property by a resident except in the
case of compulsory acquisition of certain immovable properties.
In order to have a reporting mechanism of transactions in the
real estate sector and also to collect tax at the earliest point of
“What you can do, or dream you can, begin it. Boldness has genius, power and magic in it." - Goethe
time, a new section 194-IA has been introduced to provide that
every transferee, at the time of making payment or crediting of
any sum as consideration for transfer of immovable property
(other than agricultural land) to a resident transferor, shall
deduct tax, at the rate of 1% of such sum.
It may be noted that the Agricultural Land has been excluded
from the ambit of this new provision, however by going through
the provisions line by line we find that all agricultural lands are
not excluded and that the agricultural land which is comprised
within the jurisdiction of a municipality, having a population of
over 10,000 as well as land which is not more than 8 Kilometres
of the local limits of any municipality would come within the
purview of making compliance as per the above new section
and thus in respect of this category of agricultural land, the
formalities of TDS are required to be complied with.
The tax payer has however been relieved from obtaining the TAN
No. (Tax Deduction Account Number) and a new form 26Q has
been specified which needs to be filled online and payment of
tax has to be made with reference to the PAN No. of the Seller.
Presently the options activated are for online payment of tax,
however soon the options will be available to pay the taxes
offline in the recognized branches of the authorised banks.
However the Form 26Q will still be needed to be filled up online.
This will definitely increase the formalities required for executing
a real estate transaction.
Hence, every person after 1st June, 2013 will have to deduct
TDS @ 1 % on payments made to the transferor for real estate.
In case the property in excess of `50 Lakhs is purchased, then
such TDS would be required to be deducted at every part
payment of consideration which would cause great harassment
specially to investors who are not engaged in day to day
business activities.
Extra deduction in respect of interest on loan taken for
residential house
A new section 80EE is inserted by the Finance Bill, 2013 which
aims to provide extra deduction of one time, only in respect of
interest on loan taken for a residential house property. The
maximum amount of deduction is `1 Lakh. The following
conditions are required to be complied with to obtain this special
deduction:
(I) The loan has been sanctioned by the financial institution
during the period beginning on the1st day of April, 2013
and ending on the 31st day of March, 2014
(ii) The amount of loan sanctioned for acquisition of the
residential house property does not exceed `25 lakhs
(iii) The value of the residential house property does not exceed
`40 lakhs
(iv) The assessee does not own any residential house property
on the date of sanction of the loan
(v) If the deduction is claimed under section 80EE, no
deduction will be allowed in respect of such income under
any other provisions of the act for the same or any other
assessment year
It may be mentioned that the way this provision was earlier put
up in the budget memorandum, it was a general impression that
this deduction will be over and above the deduction available
“Courage is being scared to death-but saddling up anyway." - John Wayne
Amendments made by the
Finance Bill, 2013 relating to
the real estate sector will have
far reaching consequences to
a large number of investors in
real estate as also to the
persons engaged in real estate
business, hence it is
recommended that all those
interested in real estate must
very carefully study and
implement these new tax
provisions.
under section 24, i.e. the deduction of interest upto `1.50 lakhs
on self occupied house property. However it is now made very
clear that the double deduction of the same amount will not be
allowed. This restriction has considerably reduced the charm of
this section as several income tax payers will stand getting the
deduction as they were getting earlier to these provisions.
It is further provided that the deduction under the section shall
not exceed `1 lakh and shall be allowed in computing the total
income of the individual for the financial year beginning on 1st
April, 2013 and in a case where the interest payable for the
previous year relevant to the said financial year is less than
`1 lakh, the balance amount shall be allowed in the financial
year beginning on 1st April, 2014. It may be noted that the loan
has to be taken only from any financial institution or a house
finance Company. The most unfortunate part of this provision is
that the benefit of this provision is not available to existing
property owners having a house property loan from the bank, etc.
Conclusion:
The above mentioned amendments made by the Finance Bill,
2013 relating to the real estate sector will have far reaching
consequences to a large number of investors in real estate as
also to the persons engaged in real estate business, hence it is
recommended that all those interested in real estate must very
carefully study and implement these new tax provisions.
Compiled by;
CA. Alok Jain
Partner - B.M. Jain & Co., Chartered Accountants
E-mail - [email protected]
INDORE MANAGER | MAY - JUNE - 2013 21
BUILD A
POSITIVE
SELF-ESTEEM
SELF-ESTEEM
A few years ago in a jail: A convict said to the jailer, " I'm going to
be released from the prison in a couple of weeks and so happy I
am.'' The jailer said to him ''what are you going to do when you
leave jail?'' he told the jailer he is going to try to be a contributing
member of society.
What is self-esteem ?
Self-esteem is the way we feel about ourselves. When
we feel good within, our performance goes up and our
relationships improve both at home and at work. The
world looks nicer because there is a direct correlation
between our feelings and behaviour. An anecdote will
help you understand better.
22 INDORE MANAGER | MAY - JUNE - 2013
A few years ago in a jail: A convict said to the jailer, "
I'm going to be released from the prison in a couple of
weeks and so happy I am.'' The jailer said to him
''what are you going to do when you leave jail?'' he
told the jailer he is going to try to be a contributing
member of society.
The jailer asked him the same question again and he
“I have lived a long life and had many troubles, most of which never happened." - Mark Twain
MORAL STORY CUM TIPS
gave the same answer. The jailer asked him, '' What
are you going to do when you leave jail?'' Obviously,
he was looking for a different answer. At this point, In
an angry tone, he said, ''I am going to be a
contributing member of society.'' Then the jailer
pointed out to him that there was a word of
difference in what he said earlier and what he said
now. First he had said, '' I am going to try to be'' and
now he said '' I am going to be.'' The difference is the
word ''try''. Either we do something or we don't. The
word ''try'' kept the door open for him to come back to
jail.
In reality, having high self-esteem comes from the
ability to see yourself confident, special and unique all
the time.
Do you see yourself as special and unique? Do you
have high self-esteem? Do you have confidence on
yourself?
No??
1. Believe in your inner beauty
Don't say to yourself that you are neither beautiful nor
unique. You are beautiful and peaceful.
There is no one on earth like you and you have a lot to
offer to humanity. Look always to your inner beauty.
2. Believe in your mind power
Know that the way you see yourself comes from the
power of your thoughts and mind. Use your mind power
and the power of your thoughts to develop love for
yourself. Once you begin to see yourself as unique,
people around you will begin to see you in the same
way.
3. Focus on your positive qualities
You have to realize that you as a human being have
good and positive qualities. Always surround yourself
with people who think you are beautiful and who enjoy
your company and your positive qualities. Focusing on
your positive attributes and surrounding yourself with
positive friends will help you better accept yourself and
hence build your self-esteem.
4. Overcome your negative habits
If you have a negative habit that you don't like, make
plans to get rid of it. Once you substitute your negative
habit with a positive one, your self-esteem will improve.
5. Speak up
Many people never speak up because they're afraid
that people will judge them or think of them negatively.
The simple fact is that these are the fears that
everyone experience. By making an effort to speak up
at least once in every group discussion, you will
“We need to wake up from a thought that lasts too long." - Paul Valéry
become
a
Self-esteem
is the way we
feel about ourselves. When
we feel good within, our
performance goes up and our
relationships improve both at
home and at work. The world
looks nicer because there is a
direct correlation between
our feelings and behaviour.
better public speaker. You will feel more confident
about yourself .
6. Practice good posture
By practicing good posture, you will automatically feel
more confident. Stand up straight, keep your head up,
and make eye contact. You will make a positive
impression on others and instantly feel more alert and
empowered.
7. Don't always try to please others
It is great to be considerate of others, but think
sacrificing your own needs to please them. You can't
make everyone happy. Make sure yourself what is right
and wrong and go with it. Don't allow yourself to be
used.
A good trick to starting to build self-confidence is to
pick something about yourself that you do like
(EVERYONE has at least one aspect about them that
they like) and say to yourself '' I am (aspect) and I am
awesome! '' Then pick something that you want to
improve; '' I am going to _____________ and life will
rock even more because ____________ !'' pick a time to
repeat this, like every time you brush your teeth or rub
your eyes. Examples: '' I am a good artist! I am going to
be less shy and life will rock even more because more
people will see my art!'' '' I am clever! I am going to think
things out more to solve minor problems around me.
Life is in my control! ''
Smile at yourself in the mirror every day and at least
TRY to smile at others
Source
(http://successsearch.wordpress.com/2012/11/24/
Compiled by;
build-a-positive-self-esteem/ )
Kiran Gehani
INDORE MANAGER | MAY - JUNE - 2013 23
BOOK REVIEW
A very Indian approach
to management
Business
Sutra
B
O
O
K
Publisher
Publication Year
ISBN-13
ISBN-10
Language
Binding
Number of Pages
In this landmark book, best-selling author, leadership
coach and mythologist Devdutt Pattanaik shows how,
despite its veneer of objectivity, modern management is
rooted in western beliefs and obsessed with
accomplishing rigid objectives and increasing
shareholder value. By contrast, the Indian way of doing
business-as apparent in Indian mythology, but no longer
seen in practice- accommodates subjectivity and
diversity and offers an inclusive, more empathetic way
of achieving success. Great value is placed on darshan,
that is, on how we see the world and our relationship
with Lakshmi, the goddess of wealth.
Business Sutra uses stories, symbols and rituals drawn
from Hindu, Jain and Buddhist mythology to understand
a wide variety of business situations that range from
running a successful tea stall to nurturing talent in a
large multinational corporation. At the heart of the book
is a compelling premise: if we believe that wealth needs
to be chased, the workplace becomes a rana-bhoomi-a
battleground of investors, regulators, employers,
employees, vendors, competitors and customers; if we
believe that wealth needs to be attracted, the workplace
becomes a ranga-bhoomi-a playground where everyone
is happy.
Devdutt Pattanaik, is a terrific teacher and storyteller.
Using clear language, simple illustrations and apt
examples, he shows us how the Indian approach to
business can be interpreted from an attitude which is
D
:
:
:
:
:
:
:
E
T A
I
L
S
Aleph Book Company
2013
9788192328072
8192328074
English
Hardcover
446 Pages
rooted deeply in the psyche and can be interpreted
using clues from the rich treasure house of Indian
mythology. He rightly points out that western approach is
rooted in Biblical (to some extent) thinking or rather a
form of it, on one hand and by classical Greek thinking
on the other. The biblical approach glorifying, but
eclipsed by Greek thought which glorifies man. He
shows us how the western approach is always
concerned with 'what'. The Indian approach, rooted as it
is in it's mythology, is more concerned with 'why', while
the Chinese approach, rooted in its own peculiar mosaic
of philosophies, is supremely concerned with 'how'?
Basically, Devdutt had decoded mysteries that it could
have taken many a scholar a lifetime to unravel.
BUSINESS SUTRA is an ideal read for any Indian person
who has studied management science, of which a
western model is prevalently taught .They will discover
how belief influences behaviour and therefore,
business. This will help to give them the Indian approach
to management and business and give them a more
balanced east/west view. It would also be a terrific
addition to the library of any business person of western
origin who has regular business with Indians or
businesses based in India. Even for readers who just
enjoy studying the significance of mythology and who
are particularly interested in studying the effect
mythology has on the lives of people - this book has
something for them too.
Juzar Ali. Reader's Paradise,
Apollo Square, Indore, Ph: 9893114322
24 INDORE MANAGER | MAY - JUNE - 2013
“If you do not change direction, you may end up where you are heading." - Lao Tzu
Tech Update
Name:- Mr. Abhishek Nandedkar
Designation:- Director, Nandedkar Group
Mail:- [email protected]
Blackberry Q10:
ALL SET TO ROCK
THE SUITS
Blackberry Q10
Item
Weight
Screen Type
Resolution
Pixel Density
Screen size
Add On
Internal Memory
RAM
Micro SD
Wi-fi
Bluetooth
NFC
3.5 mm Jack
USB Type
Camera
Pixel Ratio
Secondary Camera
Video
User Interface
Chipset
CPU
Graphics
Battery
Colors
Price in Indore
We recently witnessed launch of some very
extraordinary mobiles in 2013 and the good news
keeps coming.
If you're a Blackberry user who loves a physical
QWERTY keyboard this ones for you, The Canadian
Smartphone Company is all set to unleash its newest
and one of the best Blackberry smart phones Q10.
Q10 is bundled with all the goodies, Blackberry's
newest Operating System 10.1, Super Amoled touch
screen and an 8 mega pixel camera.
The Machine: This beauty with brains makes perfect
business sense, not only does it have 2GB RAM but it is
also equipped with 16GB internal memory. It's Dual
core 1.5 GHz cortex A9 Processor will ensure that you
never slow down.
“If you change the way you look at things, the things you look at change." - Wayne Dyer
139 Grams
Super Amoled 16 M touch screen
720 X 720 pixels
330 pixel density ppi
3.1 inch
QWERTY keyboard
16GB
2 GB
Upto 64 GB
802.11 a/b/g/n dual band, wi-fi hotspot
Yes
Yes
Yes
Micro USB
8 Mega pixels
3264 X 2448 auto focus LED
2 Mega Pixels
1080@30fps
Blackberry OS 10.1
TI OMAP 4470
Dual core 1.5 Ghz cortex A-9
Power VR SGX544
2100 MAh
Black, White
`44,500
The QWERTY: It's just awesome, looks neat,
comfortable and for those who are already using
Blackberry Bold will definitely love it.
The Look: When we look further at technical specs it
weighs 139 grams and its 3.1 inch Amoled screen
boast 330 ppi which is also good enough.
It also supports NFC, 4G and all the standard goodies
like Wi-Fi, Bluetooth etc. other features that it has are
camera with time shift mode and intelligent calendar.
Blackberry Q10 has been recently launched. Honestly I
miss the physical QWERTY keyboard so I won't wait for
getting my hands on Q10. However it will be unfair to
compare Q10 with other full touch screen smart
phones as this gadget only means business for the
business suits.
INDORE MANAGER | MAY - JUNE - 2013 25
Tips
TEN
OFFICE ETIQUETTE TIPS
1. Office Attire
2. First Impressions Last
Employees should wear their properly pressed office uniforms
during office hours because it is the most visible
representation that you work for the company. Some
companies do not have strict uniform policy, but instead
observe a casual business dress code to give enough
freedom and comfort to their employees while in the
workplace. Even then, employees are still expected to present
a respectable and professional image. However, do keep in
mind that not all casual attires fit in the office setting.
If you are new in the company, or if someone new is
introduced to you, always maintain proper manners. Do
not assume that you can kid around with other people in
the workplace - especially if you are not acquainted with
them. Always introduce yourself properly to new people
you meet, whether they are visitors, clients or also work
for your company.
26 INDORE MANAGER | MAY - JUNE - 2013
“All great change in America begins at the dinner table." - Ronald Reagan
Tips
3. Always Say Excuse Me, Please, Thank You
and I'm Sorry
These are just simple phrases, first taught to us by our
parents to be good girls and good boys, which we
should have mastered by this time.
Always say "excuse me" when you cough, when you
sneeze, and when you call someone's attention in
between their work or conversation.
Always say "please" when asking someone a favor.
Without this, you will sound like you are demanding or
giving a command.
When people do things for you, whether it is a superior
or a subordinate, you should always say, "Thank you."
This will show your co-workers that you appreciate
them and what they do for you and for the company.
Saying "I'm sorry" is such a powerful way of letting
others know that you didn't mean what just happened,
thus making the situation less disturbing or less
disappointing. Saying "I'm sorry" is just an initial step
because it should be followed with what you should do
to make it up.
4. Be Clean
One way to show professionalism towards your coworkers is to come to work smelling and looking nice.
Though there is a saying, "beauty comes from the
inside and not from the outside," physical image still
counts in the workplace. Even customers inquiring
about your company's products won't be interested
with your approach if you look like you just jumped out
of your bed and wore your worn uniform yesterday.
Cleanliness applies not only to the employee's
personal grooming, but also on how clean and
organized things are in their work area.
5. Try Not to Interrupt
During meetings or even in casual conversation, try not
to interrupt other people who are speaking to show
them respect. Listen and wait for them to finish before
you raise your point. Even in situations where the
conversation is casual, it is still in the workplace so
proper conversation manners should still be observed.
6. Privacy
If you are entering a room or a cubicle of a co-worker, it
will be nice if you knock first before initiating a
conversation. This shows that you respect their work
space and privacy. Also, always remember that
borrowing should always come with permission from the
owner -for everything from small things like a stapler or
markers, to big things like viewing or copying files.
7. Don't Be Loud
The workplace is a shared space, so any kind of noise
can be a distraction for a lot of people. Do not raise your
voice to get someone's attention. Being loud is one of
the most annoying characteristics of people in the
workplace, and you would definitely not want to be that
guy who everybody secretly hates in the office.
8. Workplace Conversation
Being approachable in the workplace is a good way to
build camaraderie, but don't spend this time chatting
about inappropriate topics such as your vacation last
week or your embarrassing moments. Also, limit
chatting time with your co-workers because they may
have something more important to do. You can always
save these topics until break time.
9. Don't Be Late
For a lot of reasons, being late for work should be
avoided. Being frequently late for work is a mark of an
unprofessional attitude and it should not be
encouraged or tolerated in a professional environment.
Instead, being on time for work or business meetings is
one way of showing your boss that you are interested
and serious about your job.
10. Mind Your Gestures
As mentioned earlier, employees are expected to
behave as professionals. In any kind of job, supervisors
and employees often experience back pain, tiredness
and even sleepiness which lead them to stretch, shake
their hands or lay their head down on their desk.
Though these acts are not prohibited, employees
should be conscious that they should not overdo these
stress-relieving gestures.
You can shake your hands or stretch a little without
disturbing others. It is best if you go to the comfort room
and do it there. When you yawn, make sure to cover
your mouth and as much as possible don't make the
yawning sound. When so sleepy, you can go wash your
face or you can rest your head down for 3 minutes to
rest your eyes, but don't do this in front of a client.
Break time is a perfect time to relax, but never place
your feet on top of your desk because that is incredibly
bad manners.
Source:
http://www.brighthub.com/office/career-planning/articles/89875.aspx
“Do not dwell in the past, do not dream of the future, concentrate the mind on the present moment." - Gautam Buddha
INDORE MANAGER | MAY - JUNE - 2013 27
CEO
Interview
Mr. Pranav Patel
M.P. Dyechem Industries Pvt. Ltd.
One quality/trait that you think makes an
entrepreneur different from others?
Using common sense:
Every business and position requires appropriate
skills, and when it comes to business these skills
become most essential for endurance. Common sense
is the ability to know what is going to happen when
things are going in one way.
3 most pivotal moments in your career that
you learned from
1 No adversity is big enough to bring you down if
you have belief in yourself
2 No opportunity is big enough to sacrifice your
values for that
3 Give your best effort for every task and gracefully
accept the result
Your most prized possession?
My people:
Everybody has some important people in their life that
all can inspire you, share moments, and be there for
them when needed. I am very grateful for those people
in my life. I am a much happier person because of them.
What's a compulsion in your wardrobe?
Comfortable clothing:
I like to keep loose comfortable clothes that do not
make me feel restricted and just make me feel relaxed.
A book which is your Bible?
The monk who sold his Ferrari: A Fable about
Fulfilling Your Dreams and Reaching Your Destiny
28 INDORE MANAGER | MAY - JUNE - 2013
The monk who sold his Ferrari",written by Mr. Robin
Sharma is a tale, which provides an approach to living a
simple life with greater balance, strength, courage and
abundance of joy- Significant slices for life.
Country/city in which you love to do
business or spend some time in?
Any country that brings me closer to my goals:
I have developed my own system - a method that works
very well for me. It is the system I use to set goals for
everything I want to achieve in life and is one of the
most important tools I have. With this tool I can live in
any country/city.
Your preference in leisure time?
Spending time with family and friends:
Mostly people waste half of their leisure time watching
television. But I prefer to spend this precious time with
my family and friends. As we all know we can't live
without our families or our friends because they
represent a huge part of our lives.
What is your mantra for Entrepreneurs /
Family Run Business Owners?
Be honest to your work:
It has been said that honesty is the best policy. It
sounds like the simplest thing in the world, but being
truly honest with others and with yourself be a real
challenge. But, honesty develops character, as well as
credibility and trust, all of which are the building blocks
of high self-esteem and healthy relationships. Being
honest isn't a goal that you check off a list-it's an
ongoing process that will both challenge and benefit
you throughout your life.
“The mind is everything. What you think you become." - Gautam Buddha
TOP TEN MOST
POWERFUL WOMEN
OF THE WORLD
1
6
Angela Merkel
Sheryl Sandberg
Age: 58
Country: Germany
Category: Politics
Age: 43
Country: United States
Category: Technology
2
7
Dilma Rousseff
Christine Lagarde
Chancellor, Cermany
COO, Facebook
President, Brazil
Managing Director,
International Monerary Found
Age: 65
Country: Brazil
Category: Politics
Age: 57
Country: France
Category: Philanthrogy / NGO
3
8
Melinda Gates
Janet Napolitano
Co-chair, Bill & Melinda Gates Foundation
Secretary, Department of Homeland
Security, United States
Age: 48
Country: United States
Category: Philanthorpy / NGO
Age: 55
Country: United States
Category: Politics
4
9
Michelle Obama
Sonia Gandhi
Age: 49
Country: United States
Category: Politics
President, Indian National
Congress, India
Age: 66
Country: India
Category: Politics
5
10
Hillary Clinton
Indra Nooyi
First Lady, United States
Personality, Philanthropist
Age: 65
Country: United States
Category: Politics
CEO, PepsiCo
Age: 57
Country: United States
Category: Business
Source: http://www.forbes.com/power-women/list/
“Hatred does not cease by hatred, but only by love; this is the eternal rule." - Gautam Budhha
INDORE MANAGER | MAY - JUNE - 2013 29
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30 INDORE MANAGER | MAY - JUNE - 2013
“Try not to become a man of success, but rather try to become a man of value." - Albert Einstein
Indore Management Association
Presents
MANAGEMENT FILM SHOWS
July - September 2013
Day & Date
Movie Name
Learning
Friday,
July 5, 2013
Inception
”Reality” is a relative concept”
Unraveling The Dream within The
Dream
Thursday,
August 6, 2013
Shatranj ke
Khiladi
Two fanatical, Chess obsessed
noblemen unaware that a bigger
game of chess-a political one, is
being played out around them.
CA. Navin Khandelwal
DirectorNeeraj Engineering Ltd.
Friday
September,
6, 2013
Jerry
Maguire
“Fixing and controversies in sports”
- About a sports agent who has a
moral epiphany and is fired for
expressing it.
Mr. Abhishek Sanghvi
Founder & Vice
Chairman, iLEAD Group
Timing: 06:30PM onwards
Venue: IMA Meeting Room
56/1, Jall Auditorium, South Tukoganj, Indore
Contact: 0731 -4069545 / 2512544-45
Email: [email protected]
Moderator
Mr. Amit Bidasaria
CEO VSN Direct
Indore Management Association is announcing a Workshop Series
TRAINING AT DOORSTEP!
We are happy to announce our workshops of this series at
Pithampur & Dewas
“Essentials of Supervisors"
July 24, 2013 at Pithampur & July 27, 2013 at Dewas
IMA has aspired to facilitate more training programs to support you in developing your
human resources at minimal cost. We are happy to announce our initiative of conducting the
workshop series at different industrial sites. Our workshops are on the theme “Essentials of
Supervisors” at Pithampur on July 24, 2013, Wednesday & at Dewas on July 27, 2013,
Saturday. These workshops will be hosted by Kirloskar Brothers Ltd. at Dewas & Piramal
Healthcare at Pithampur.
Outlines of the workshops : •
•
•
•
•
•
•
•
•
•
Personal Qualities and Attributes
How the workplace is changing
Issues between generations
How to manage time and identify priorities
What makes a good leader
The situational leadership model and how to apply it
The four stages of team evolution
Communication, questions, listening skills and non-verbal messages
Feedback as a way to improve performance
Ways to motivate without money
Methodology of the workshop will be based on indoor classroom teaching and outdoor experiential
learning.
Investment:
For IMA Member
For Non-Member
Per Participant
Group Offer (Minimum 5 participants)
Rs. 1200 (Per Participant)
Rs. 1000 (Per Participant)
Rs. 1800 (Per Participant)
Rs. 1500 (Per Participant)
12.36% Service Tax will be additional
Day & Date : Wednesday, July 24, 2013
Time
: 9.00 AM to 4.00 PM
Venue
: Training Center
Piramal Healthcare
Plot No. 67-70, Pithampur, Indore.
Day & Date : Saturday, July 27, 2013
Time
: 9.00 AM to 4.00 PM
Venue
: Training Center
Kirloskar Brothers Ltd.
Opp. Railway Station, Ujjain road, Dewas
Faculty
Faculty
: Er. Rakesh Jain
Director - Outdoor Learning Resources.
: Mr. Amber S. Arondekar
Founder & Mentor - Powertrain
For more details, we request you to contact Mr. Sanjay Malviya Mobile No. : +91 8889996130
Email id: [email protected] Join & Follow on : https://www.facebook.com/groups/imaindore