Tradition, change and conflict in indian family business [Reprint 2018 ed.] 9783111345079, 9783110992472

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TRADITION, CHANGE AND CONFLICT IN INDIAN FAMILY BUSINESS

PUBLICATIONS OF THE INSTITUTE OF SOCIAL STUDIES

PAPERBACK SERIES XIII

INTERNATIONAAL INSTITUUT VOOR S O C I A L E S T U D I E N - ' S - G R A V E N H A G E 1974

TRADITION, CHANGE AND CONFLICT IN INDIAN FAMILY BUSINESS by

ALLAN R. COHEN University of New Hampshire

1974

MOUTON THE HAGUE • PARIS

© Copyright 1974 Institute of Social Studies, The Hague, The Netherlands. No part of this book may be translated or reproduced in any form, by print, photoprint, microfilm, or any other means, without written permission from the publishers. The responsibility for works published in the series "Publications of the Institute of Social Studies" rests with the authors; publication of a work in this series does not commit the Institute of Social Studies to any opinions stated therein.

To my parents, in whose family and family business it all began

FOREWORD

When Professor Allan Cohen asked me to write a foreword to his volume, I was both flattered and apprehensive: flattered because I had an opportunity to add to his thinking, and apprehensive because I was asked to add Indianness to Professor Cohen's fragile Americanness. I confront issues of cultural normativeness and cultural integration almost every day of my life and I hope I shall continue to face these issues throughout my career as a behavioral scientist and as a human being. I had three significant encounters with Professor Cohen which are relevant to this volume and which are of significance to what I have to write in this foreword. Our first encounter was in a taxi in New Delhi at a time when he was thoroughly engaged in the present project. It was a personal encounter in which both of us assessed the other; basically, Allan was engaged in trying to understand the boundaries of my Indianness while I was persistent on finding out his commitments to his Americanness. Both of us were also involved in understanding the reverse cultural commitments: he was exploring my Americanness and I was pushing him on his Indianness. It was not a very pleasant encounter although it was expanding and exciting. We did make promises to each other to develop mechanisms for deeper acquaintanceship and we have kept those promises. The second encounter was more meaningful. I was paternalistic and professorial in the true Indian tradition and he was childlike and a student striving for independence in the genuine American tradition. By this time we were willing to accept

8

FOREWORD

each other as separate, but struggling for the same destinies in terms of our human dilemmas. The third encounter was during a seminar at Calcutta where I had invited Allan to write a paper on case research, with specific reference to his work in India. This encounter was mainly through his writing the paper. It was at this time that I began to accept Allan as a colleague in a very special and admiring sense. What he wrote in that paper showed how he could cope with fundamental issues of understanding different cultures without coming to any evaluative conclusions. I was enthralled and proud of his work, and a sense of wellbeing has flowed between us ever since. These encounters are pillars of what this volume contributes and what it misses. Understanding families is a cultural and evolutionary process. Cultural in the sense of it becoming a comparative study of the scientist's cultural orientations on the one hand, and the cultural configuration he wishes to understand on the other. It is evolutionary because understanding a family involves really living in and with it; there is no closure in understanding and there is no conclusion that is substantially definitive. The limitations in being comparative lie in the parameters and variables which the researcher chooses and studies. His vantage point stems from his own experience in the family and the culture. These structures are the initial and primary socializing agents for him. Being evolutionary is burdensome because it has no beginning and no end. These issues are not uniquely the limitations of Professor Cohen. They are the problems confronting researchers engaged in the study of human behavior and persons steadfast in the more difficult task of changing the paths of human endeavor. There are three major themes which emerge in this volume and are relevant to me in the context of my encounter approach: one, the issues of studying families and cultures as evolutionary and cultural processes; two, the author's emphasis on developing typologies in terms of traditionalism and modernity; and three, analysis of data in terms of role concept and its derivations, implying that there is stability in relationships and that such relationships are faceless.

FOREWORD

9

STUDYING FAMILIES AS CULTURAL AND EVOLUTIONARY PROCESSES

Indian families are not families in the Western sense of the term. Western family tradition considers families as units which include husband, wife and non-adult children belonging to the couple. They originate as neolocal in nature and basically patriarchal, patrilineal and patrilocal. Indian families are conjugal in nature without an origin, and extensive in the sense that blood relationships are not primary for their building, and could be both patriarchal and matriarchal, patrilocal and matrilocal, patrilineal and matrilineal. The lineage is more connected with caste and subcaste, language, geography, and the original locality of the family. Indian families are also extensive in the sense that the village itself is a family constellation where roles of each person in the village are defined in the context of the culture, norms, religion and caste. For example, children are taught to relate to nonblood related members of the village as uncle, brother, sister, etc. Children grow in the context of the whole village as a family constellation where roles are defined in terms of behavioral relationship regardless of kinship. The relevance of uniqueness of Indian families for studying entrepreneurship in the Indian family centers around three major themes: (1) There is a planning of relationship boundaries in which the extendedness of the family becomes defined and clarified. The boundaries include geography, language and dialect, clothing and attire, caste and subcaste, and multiple other factors. Children learn to behave towards other human beings in patterned responses. The relationship is predetermined by the previous information and knowledge the interacting parties have about each other. The training requires that the development of a relationship is directed towards the maintenance of the community as a whole and not limited to the satisfaction of individual choices and needs alone. For instance, in establishing the response structure of individuals towards other individ-

10

FOREWORD

uals, similarities in terms of caste and culture weigh heavily as a source of relationship. The maintenance function is the basic unifying source and foundation of community relationship. (2) Hierarchy is predetermined and is more an ascribed aspect of the culture than an achieved characteristic of an individual. For instance, the concept of an undivided family is an anathema to individual entrepreneurship and sometimes in conflict with the larger interests of the family. Usually individuals act as deviant members of the family in order to excel individually and to express any instincts of entrepreneurship. In this sense, deviant behavior is well rewarded and quite often reinforced without in any way disturbing the ascribed nature of hierarchy. (3) Family role relationships transcend business role relationships. Hence there is continuous stress on successful individuals in cases where such individuals are not a part of the established hierarchy. In this book, the issue of role relationship has been considered within the context of this stress, without in any way connecting it to the problems of an Indian Hindu business family.

TRADITIONALISM VS. MODERNITY All efforts to understand societies at large have limitations. Yet one of the more fashionable parables for comparing societies has been in terms of modernity vs. traditionalism. In all such comparisons, however, traditionalism has been equated with a history of non-industrialization and with symptoms of resistance to change towards new technology for economic growth. By the same token, modernity has been understood in the context of a society's ability to Westernize itself at a rapid rate; the rate again being determined by the standards set by the technologically advanced societies. Let me propose an alternative to understanding this issue in the context of Indian business families. Indian business families present two faces: the public and the private. The public face

FOREWORD

11

is basically guided by three principles: (a) "Samman" principle (principle of respect, honor, reverence, pride) permits individuals to express sentiments of respect to persons with predetermined role relationships. It provides individuals with the opportunity to express a modicum of politeness towards each other, which in turn protects them from being confronted with or confronting each other on basic issues of disagreement and conflict. Samman also provides individuals with space to withdraw from threatening situations or from threatening each other. It provides a basis for dependence on each other under stressful conditions. This principle, if practiced, preserves the hierarchy in the community and protects those who are underprivileged in every sense of the word. Young and old, rich and poor, high and low caste people, close and distant relatives, and others representing such polarities, understand and maintain their station in life with the help of the Samman principle. (b) "Sambandh" principle (principle of relationship) explicitly helps to maintain the norms and rules for relationships among people. It prescribes the desirability of maintaining good relationships with people of divergent views, caste, religion, hierarchy, and other parameters that distinguish people from each other. It is a norm-setting device which calls for a stable relationship among people and demands that individuals and groups continue relationships for their wellbeing and safety. It is very much like the concept of Rousseau's social contract based on the good of the general will among individuals. But in its truest sense, it is a social contract for not disturbing established relationships in the community. (c) "Samyukta" principle (principle of unity) is a coping mechanism for living in diversity. It is the characteristic form of a hierarchization rule in which those with high status pressurize those with low status in the family to live in unity. In a sense, living in unity is the foundation for the maintenance of the hierarchy. It is also a method for punishing deviant members

12

FOREWORD

in the family, particularly those who are entrepreneurial in instinct and those who wish to develop family units on a Western model. The practice of this principle is one of the greatest hindrances in the development of neolocal families patterned after Western models. This principle requires that all those with common roots live under common roofs; it is the core of the Indian extended business family. The private face of the Indian business family is more real than the professed public face. Understanding this aspect will contribute to the understanding of the issues connected with modernity vs. traditionalism. It has been amply clear for some time that industrial growth of a nation has had to depend on Western technology; the success of industrialization has depended on a society's ability to import these Western technologies without creating instability in the social and communal order. The private face is an expression of this struggle to live with Western technology and traditional mores. The effort to maintain a society in its traditional form in India is expressed in maintaining the public face guided by the three principles explicated above, while a desire to import technology and its subsequent consequences is apparent in the private face maintained by the Indian business families. But the private face of the Indian business family is not new and is not dependent upon the advent of Western technology; in fact it existed before Western technology was imported. The surfacing of the private face, however, is a consequence of the struggle to import Western technology and at the same time to maintain the traditions of Indian family life. The private face is guided by three basic principles and practices: (a) "Samgarsha" principle (principle of struggle) permits the members of the community to express competitive instincts, but requires that the struggle be for a good communal or social cause. The definition of what makes a good social or communal cause is always in question, but the Indian families have evolved systems and mechanisms to settle that question

FOREWORD

13

at least temporarily. If the struggle can be justified on the basis of the principles connected with the public face, in the service of maintenance of the community's public face, then it is usually considered a 'good' cause. The struggle comes into focus most clearly when members of an extended family fight amongst themselves for space under the same roof. In terms of public face, it is not seen as desirable for members of an extended family to live separately from each other, even if the building does not have enough space after the family has grown in size. The fight for space is expressed in some unique forms in the family; for instance, there might be a struggle to show each other how little space one can live with, thus shaming other members of the family who might require more space. In fact, the fight is expressed in terms of a competition over sacrifice for others and, as a result, competition in one's ability to shame others for not being reasonable and sacrificing in the name of the family. This fight again results in resolutions consistent with the established hierarchy in the family. Another area of struggle most frequently encountered by the members is in their ability to maintain consistency between their public and private faces and a continuous challenge to the myth that families live their public image in their private world. I can cite several incidents to exemplify the concept of competition in Indian families, but what is more important to understand is the role it is supposed to play if we take into account only the public face of the Indian family and ignore the private face. (b) "Sammpatti" principle (principle of acquisitiveness of material wealth) expresses the material concerns of the Indian family and a fundamental acquisitive instinct shown by the members of large and small communities in India. A significant incentive for Indian business families to stay as an extended family centers around this acquisitive and materialistic instinct. For instance, Indian laws regarding personal life, such as marriage, ownership and inheritance, are guided by religious laws and differ for communities on the basis of religion. There are some common laws, but in personal aspects of life, laws based

14

FOREWORD

on religion supersede any civil laws of the land. For Indian businessmen, staying in an extended family is simply good business and provides greater business viability than living separately in smaller family units. This principle also reinforces endogamous aspects of the community and guarantees the maintenance of wealth for future generations in the same family and, more often than not, in the same community. (c) "Shakti" principle (principle of power, ability and potency) is very much akin to the Western models of traditional power struggles among competing individuals and groups. It is also very close to the concept of tribal warfare. A great many entrepreneurial activities have been stimulated by the need for power among individuals and groups. Within the family, brothers and sisters learn to fight for power and supremacy over each other. The family is a good training ground for counterdependent responses, particularly since in such families it is already known who shall have the power on the basis of hierarchy and the order of birth. The eldest brother is the prime target of competition for power since it has been established according to Indian Hindu family tradition that he will carry the scepter of family power; the eldest brother is preordained and therefore is a sitting target. The need for power and its expressions take many forms, but most of them are seen in subtle behavior and behind-thescene activities. The combination of competitiveness, acquisitiveness and struggle for power make collaboration among brothers, between father and sons, among any kin related individuals, a very arduous exercise. The relationship among brothers who are engaged in business together is unique in Indian families. I shall use an illustration in which each of five brothers engaged in business together continued to work on seeking power in a pathological and most unique manner. Health was used as a creative method for solving power-related issues. In the name of health and, therefore, as an expression of concern for each other's wellbeing, health remained the basic strategy to relate to each other. In one instance, four of the brothers declared the fifth to be overworked and stressed to the point

FOREWORD

15

of showing mental and emotional fatigue. After an expression of such 'concern', the four brothers decided to take away the responsibilities assigned to the other so that 'he would not feel burdened'. In another case, one brother used his poor health as a means of asking forgiveness for major business failures and requested that he be given another chance. Health and therefore potency have been used by these five brothers as a major source of either curtailing someone's power or as an excuse to maintain power by asking forgiveness. Under threatening conditions, health has acted as a saviour for all members. Having bad health could be good or bad depending upon how the power alignments turned out at a given time. The Indian family is an elastic umbrella under which all kinds of collusions could take place, as long as they are under the umbrella. But the umbrella is more useful when the rains of external threat are seen by the members of the family under the umbrella. I have pointed out that the issue of modernity vs. traditionalism might not be as real as the issue of Indian business families coping with the realities of their public and private faces. The fundamental issue confronting such families is their struggle to develop consonance between their two faces. Professor Cohen has experienced a great deal of the public face, and therefore has developed his thinking around role relationships, but for me as an Indian the issues lie in confronting and encountering the discrepancies between the two faces. Sometimes, it must be admitted, the issues get lost and appear as expressed confusion between modernity and traditionalism.

ROLE RELATIONSHIPS A N D STABILITY

Indian business families are haunted by a conflict between the actuation of prescribed roles and the maintenance of ascribed roles. This conflict is apparent when one observes a conflict between the role and the self. The self in the Indian family is not given an opportunity of expression in the community and therefore it must find devious ways to express itself.

16

FOREWORD

The ascribed role actuation is always under question in the business families as the ascription does not automatically guarantee achieved status. The advent of Western technology and knowledge has profoundly affected the foundations of ascriptive roles. It has forced the question of changing hierarchy on the basis of achievement criteria. In a sense then, the role model discussed in this volume derives its strength from the Western tradition of social arrangement and not from the Indian arrangement of families. In the beginning I mentioned that my relationship with Professor Cohen transformed over a period of time and that this was a consequence of our confusions about, and affection for, our cultural heritages. I have come to believe that interactions among human beings go through an aging process. And the evolutionary nature of human relationship does not justify our hanging academic hats on only one hook of a cultural hatrack. It requires multiple paths for exploration and provides opportunities for living in multiple cultural contexts. Professor Cohen and myself are suitable examples of this dilemma. Case Western Reserve University, Cleveland, Ohio. March, 1972.

Suresh Srivastva

TABLE OF CONTENTS

Foreword

7

PART ONE

I II III IV V VI VII VIII IX

Introduction National Products Ltd Reddy Engineering Company The Murty Group of Companies Shilpa Construction Company The Chand Brothers The Doctors Birla Company The De Companies

21 55 117 140 177 203 220 229 239

PART TWO

X Assessment of Traditionalness of the Family and Business Systems XI Inter-Role Conflict and Traditionalness .

.

.

251 295

Appendix I Social System Analysis: key to understanding organizational behavior

330

Appendix II Questionnaire

339

Bibliography

346

PART ONE

I INTRODUCTION

This project evolved from intensive research in a large familydominated company in India. The original research began on a subject unrelated to family business; at the time of starting the research, the author was unaware that the company was family-owned.1 In the course of interviewing the Sales Manager, the fact that he was the younger brother of the Chief Executive and that this caused serious difficulties, began to force its way to the writer's attention. The younger brother was obviously very disturbed about the relationship, and revealed an extreme lack of confidence in himself, aggravated by his doubts about his brother's confidence in his executive ability. Our findings in this company suggested that Indian family business might be an important place to study the problems of simultaneous membership in two different and conflicting social systems, each with its own values, norms, and expectations. This has been termed inter-role conflict in Kahn et al's classic study of organizational stress, where "role pressures associated with membership in one organization are in conflict with pressures stemming from memberships in other groups".2 If, for example, a son reports to his father as a subordinate to a superior, there often is confusion on both sides when the demands and expectations between father and son differ from 1

The early research is reported in a series of cases, Metal Company of India (MECO), A - F, available through the International Case Clearing House, Harvard University. 2 Kahn, R. L., et al., Organizational Stress: Studies in Role Conflict and Ambiguity, p. 20.

22

INTRODUCTION

those between superior and subordinate. This conflict of pressures may not always exist (depending on the closeness of the family social system to the business social system); we considered it important to study the conditions under which it appears, as well as to investigate what the behavioral consequences are when the conflict does exist. What are the coping mechanisms for dealing with inter-role conflict in family business and how do they affect managerial performance? We believed that answers to these questions would provide insight into other prevalent inter-role conflicts, such as those affecting foremen, the classic "men-in-the-middle". The dilemmas created by membership in conflicting social systems are important, for example, because of the growing need for people to serve as linking members between groups of specialists with different orientations to time, structure, people and environment.8 Any person in an organization who feels the obligations of two different social systems will be subject to inter-role conflict; the essence of most important executive jobs is dual membership in conflicting social systems as, for example, in coordination between production and sales. The wider culture in which family and business values and attitudes are acquired provides the setting for organizational inter-role conflict in family business. The Indian government has chosen economic development as its planned goal; the country is currently in transition from an agricultural to an industrial economy, a rural to an urban society, a traditional to a modern social system, and these changes affect (and in turn are affected by) the family system and business practices. By intensively studying managerial role requirements, norms and values in family companies in India, we can see the consequences of societal change on the behavior of the managerial decision-makers who will by their decisions be affecting economic growth through the private sector. Certainly family business in India is important, controversial 3

See, for example, Lorsch and Lawrence, "Organizing for Product Innovation", Harvard. Business Review (January-February 1965).

INTRODUCTION

23

and little researched. 4 Consequently, in the process of investigating inter-role conflict, we were determined to develop a good literal description of managerial behavior and attitudes in Indian family business. What are family businesses in India actually like? in studying family business we were especially interested in seeing how the family system combined with the business system in a wider culture of change to produce emerging managerial behavior. Our central postulate was that family systems and business systems in modern India frequently place conflicting demands on family members in family businesses. We planned to assess under what conditions this was true, and what consequences there were for: (a) the individual growth and development of family members in the companies, along with the growth and development of non-family executives who are affected by family behavior, and (b) the growth of the company, and by implication, economic growth through the private sector. 5 4

Though no exact figures exist, a high offical of the Federated Chambers of Commerce and Industry of India estimated privately to us that 80-90 percent of all Indian private business is family-dominated if not wholly and formally owned. The government has recently appointed a high-level commission to study the managing agency system; serious questions have been raised about concentration of wealth, anti-social behavior and quality of management practices in the family-dominated managing agencies. Furthermore, there is a great deal of speculation - and some research - on the joint family system and its place in present day India. Feelings about the family and the family's place in business are strongly held and sharply divided. In a speech at the Seminar on the Managing Agency System, Delhi, June 29, 1965, S. L. Kirloskar, the President of the Federated Chambers of Commerce and Industry said: "In my view, it would be wrong to presume that a family firm would ran its affairs inefficiently and without applying modern methods of management and salesmanship. This generalization is not borne out by practical experience and is patently unfair. However, that kind of assumption seems to be present at the back of the minds of many who decide matters." ' We assume that individual companies choosing to grow is an important determinant of economic growth in a mixed economy like India's. Government policies may determine or limit opportunities but individual companies can still recognize the opportunities and take advantage of them through new investment, better use of existing resources, etc.

24

INTRODUCTION

It is central to our way of understanding behavior, that an existing practice may be functional along one of these dimensions and not on the other; part of our task has been to clarify which system is being benefited when. There is at least one other important dimension on which it is possible to assess the consequences of inter-role conflict and the coping mechanisms for dealing with it: family maintenance. The problems generated by conflicting family and business systems certainly affect the families involved, and insofar as perpetuating the joint family as a unit is considered by the family to be an important goal, we cannot ignore this dimension. Nevertheless, we have chosen to treat this dimension as secondary, since from our Western bias, individual and company growth are the more important issues. We call this focus "Western bias" advisedly, for in choosing to treat these dimensions as more important than maintaining the joint family, we have reflected a concern for the individual and the nation, rather than for the family, which to many Indians is by far the more important and satisfying social unit. In effect we are making explicit our values, which may or may not conflict with the values of those we study; as mentioned previously, we have been concerned to specify for which systems observed behavior is functional and for which dysfunctional. And we have been less concerned with dysfunctionalities to the family system than the others, though where relevant we have discussed these dysfunctionalities. Some of the families we have studied created dysfunctional consequences in the other systems by their attempts to maintain the family, while other families have managed to minimize such consequences; we will explore the combinations as we describe the companies. There are those whose primary concern is the negative aspects of the dissolution of the joint family in its traditional form; we have seen enough of the severity of that system at its worst to be unsentimental about it as an end in and of itself. Ultimately our concern is for man, not his institutions, which in our naively humanistic way, we believe should serve man or cease to exist. Yet we recognize the best aspects of the joint family, deeply value its virtues

25

INTRODUCTION

and believe, to paraphrase Mark Twain, that the reports of its recent demise are slightly exaggerated. Consequently, though our prime concerns will be the assessment of functionality for individual and company growth, we shall have quite a bit to say about various forms of family organization in Chapters X and XI, where we shall deal with the elements or processes which make up the different family organizations, and we shall attempt to see the positive and negative aspects of each. The following simplified diagram summarizes the way we have conceived the study: Given Changing environment and culture: rising expectations. Western influences on authority attitudes, more complex society, relatively rapid change, industrialization, economic growth, etc. Family Practices and Beliefs: Expressed in role expectations and requirements, obligations, norms, values, etc.

\

"/ \

/

Business Practices and Beliefs: Expressed *"in role expectations and requirements, norms, values, etc.

Emergent managerial behavior in the family company: management practices, inter-role conflicts and their modes of resolution, treatment of family members in business, treatment of non-family members in business.

1

Consequences for: individual growth and development, company growth, and by implication, economic growth, family maintenance.

26

INTRODUCTION

CONCEPTUAL SCHEME

Implied in the above objectives is a way of conceptualizing behavior in terms of social systems. Included as Appendix I is a description of social system analysis which explains how we view organizations as social systems. Central to the concepts expressed there is the idea that social systems are a set of interdependent elements - interactions, activities and sentiments which can be seen as an organized whole. System boundaries are determined by the relative number of interactions between persons; thus both families and business organizations can be clearly seen as social systems, each with a characteristic set of activities, interactions and sentiments. Another useful tool for understanding behavior, not dealt with explicitly in the Appendix article but completely consistent with it, is the concept of roles. Roles are the activities which a person holding an 'office' in an organization or system is expected to perform as the office-holder.8 Roles are a way of allocating behavior to members of a system on a regularized and relatively stable basis. Assignment of roles to members allows a certain amount of predictability in interpersonal relationships, since the activities of a person in a role are largely determined by the expectations or pressures he receives from other relevant members of that social system. The mutual expectations of members of a social system, a very important category of sentiments, contribute to the stability of the system and the sustaining of relationships between members. An important way of understanding behavior in both family and business systems, then, is to identify the existing role expectations, the beliefs members have about the ways in which they should behave towards one another, along with the actual behavior of the members. In order to know what kinds of questions to ask and what areas to investigate to get at role expectations, we prepared both a description of the Indian family system as it was traditionally supposed to be, and sometimes still is, and a list of characteristics often considered 'de6

See Kahn et al., op. cit., Chapter 2.

INTRODUCTION

27

sirable' by Indian managers for business organizations in India. This list was derived from our earlier case research, and represents the 'oughts' of at least some Indian businesses. From the descriptions of the two systems, we will make clear why we predicted that differences between them in traditionalness, would be the most important variable in producing interrole conflict.

T H E FAMILY SYSTEM I N I N D I A

If the extended family system in India can be said to have had a purpose, it was a mutual joining together for survival against an often hostile environment. The system provided social security and spreading of risk which may be seen as the earliest form of 'corporate diversification'. If one member of the family prospered, all could share in the prosperity, and if one member was in trouble, his problems could be absorbed by all the other family members. In modern India, lack of a national social security plan and widespread unemployment preserve to a certain extent the functionality of an extended family. Though modern families may not all live together under the same roof and share a common kitchen, for even many "modernized" Indian families the extended family is still a psychological reality. Money is sent home, visits to family members are as frequent as job schedules permit, and family members often 'count on each other'. When there are problems they arise because some members of a family no longer feel that these obligations exist, while other members think the obligations should exist.7 The common purpose of the family - to survive - makes it a goal-oriented system comparable to business enterprises, with management problems of its own. This way of looking at the family was used by Homans in describing the extended family system of the Tikopia: 7

My interpretation of the conclusions of Aileen Ross, The Hindu Family in its Urban Setting. Also see The Family in Mahuva by I. P. Desai.

28

INTRODUCTION

The point is that in the family, as in any organization, there is an overall task to be accomplished, in this case the survival of the family, specialized tasks that contribute to the main one, a division of labor in carrying out the specialities, and a chain of command to insure coordination. Effective work on the environment could not be carried out at all, or could not be carried out so well, without these arrangements. They are not a matter of deliberate planning, as in formal organizations, but they are present just the same. They must be. The family has jobs to do and therefore must exemplify, as much as other groups, the general principles of cooperative organization. The other characteristics of the family cannot be understood without reference to these.8 Though it is clear that there have obviously been many families which were exceptions (and there are now many more), the literature on both Northern and Southern families in India, reveals several common features which we can summarize as follows:9 (1) The family is extended. This means that a large number of parents, children, grandchildren, uncles, aunts, nephews and cousins are inter-related by many mutual obligations of help and support. Who is obligated to whom, and how, varies with caste and region, but the fact of extended obligations (as compared, for example, to American families) is almost universal. (2) Every member of the family is supposed to place welfare of the family above welfare of the self. A family member is supposed to first consider the effects of his actions on the family and is obligated to help other family members even at great cost and inconvenience to himself. Which particular family members deserve most consideration depends somewhat on the part of India in which one lives, but the phenomenon is widespread. (3) Authority usually resides in the oldest male of the household, Homans, The Human Group, pp. 237-38. • This description is derived from several sociological and anthropological studies; the primary sources are Hagen, On the Theory of Social Change; Carstairs, The Twice Born-, A. A. Khatri, "Social Change in the Caste Hindu Family and its Possible Impact on Personality and Mental Health", in Nature and Extent of Social Change in India, Sociological Bulletin XVI (March and September, 1962); and Desai, The Family in Mahuva.

8

INTRODUCTION

29

who is not obliged to consult family members on decisions affecting them, though if wise he might often do so. Whether or not family members are consulted, the eldest male or the head of the family, is responsible for making final decisions which all family members are expected to follow regardless of their feelings about the decision; criticisms of, or severe arguments with, those in authority is not allowed. (4) As implied in the above point, authority in the family is mostly by age-grading; the older a family member, the more authority he commands over the younger members. (5) Child-rearing assumes that children are incapable of selfdirection until a very late age. Children . . . are viewed as not knowing, not understanding and are talked about as though they had no feelings. Anything is discussed before children as though they were not present. [It is assumed] they will do bad things in parents' absence if parents do not watch them; if they are out of sight, they will forget the elders' words and do what they please; they will be difficult to control unless they are made to obey through use of fear and force . . . It is felt that children who are praised directly will think too much of themselves and will grow lazy.10 (6) Negative motions toward family members, especially toward elders, are generally denied overt expression. There might be, for example, intense rivalry between brothers for a parent's affection, but it will usually take covert forms. If the negative emotions become too strong to find outlets in covert ways, they may be expressed in almost uncontrollable outbursts. (7) Traditionally in India even a young man remains dependent and has to respect family elders and obey them implicitly. He has little to say in important decision-making situations, even those which affect him intimately, as for example, choice of mate and career. However, his role in the family and in the outer world is crystalized. He knows what to do and what to expect from life. He feels secure that his basic needs would be 10

Hagen's excerpts are from page 164 on attitudes towards children in Burma, which for our purposes can be treated as identical to traditional Indian attitudes.

30

INTRODUCTION

taken care of by the family. He develops [a] firm sense of identity and feels the security and the predictability of the environment round about him. The price he has to pay for this is loss of [a] large area of autonomy, loss of initiative, stagnation instead of creativity, etc.11 This system was, and for some (especially those who live in villages) still is, highly functional to the culture in which it existed. For centuries one of the most important aspects of environment in India has been that technology (farming and other uncomplicated jobs) hardly changed. Thus more senior family members probably were in a position to make the best decisions by virtue of age and experience. In industrializing India, with many industries, occupations and skills relatively newly created, age and experience is probably less relevant than it was, and accordingly we will expect to find some changes from the traditional family system.

DESIRED INDIAN MANAGEMENT SYSTEM

If for the present we can use the term paternalism to summarize the characteristics of the traditional family system (a more rigorous definition will be developed in Chapter X), then it would be reasonable to expect that the traditional Indian business system was also paternalistic; unfortunately there is very little genuine documentation of traditional Indian business practices. Rice offers some evidence in his Ahmedabad Experiment and The Enterprise and its Environment about personalistic practices of management, and his prescriptions for change can be seen as attempts to depersonalize the management practices of Calico Mills and Sarabhai Chemicals, which he describes as typical of the paternalistic pattern of Indian management: In contrast to the primary work-groups of mechanised industry, the managing systems of India have preserved many of their family 11 A. A. Khatri, op. cit.

INTRODUCTION

31 12

characteristics. The Managing Agency system has been absorbed into the traditional joint family. In a traditional managing agency, family membership and family relationships are of over-riding importance. All members have equal rights of access to the head of the family, even though some may be senior to others, and each member of the family contributes to the common task according to his abilities. In the derived management organization the power of family members, irrespective of role, is greater than that of non-members. But the relationships within the organization are informal and are governed more by personal than by task considerations. In able families the system has led to the building up of large enterprises that have carried through the first stages of the transition from village crafts to urban mechanization. The changes in technological, economic, and social conditions that have taken place in recent years, however, have called for such varying, specialized and hence exclusive, knowledge and experience, that only those with specialized training have been able to undertake certain functions of management. Unless highly trained specialists happen to be available among the members of a family, greater responsibility and authority have to be delegated to others. This disturbs the traditional family relationships. It also means that relationships between different specialists have to be adjusted to task needs rather than to personal preference. Just as the machine has become the producer, and has limited the worker's freedom of action, so the demand for specific mechanisms of control and service has limited the manager's individual idiosyncracy. 13 In the Calico Mills, the Managing Agent had direct contact with, and overriding authority over, all managers. Although junior managers were subordinate to particular senior managers, the latter had general authority over all those junior to them. New appointments at all levels were made, or at least approved, by the Managing Agent. [However,] a strong joint family t r a d i t i o n . . . makes the inevitable by-passing not only acceptable but desirable. 14 In a family business the Managing Agent carries so much responsibility and wields so much authority that the power of others, how18 The Managing Agency System is a system in which a company gives a longterm management contract to a group called a Managing Agency, which may not but usually does also own stock in the company. Started by the British, the system allows the Managing Agents to control a large number of companies with less than complete ownership. The agencies are usually owned and operated completely by one family. 13 A. K. Rice The Ahmedabad Experiment, p. 246 14 Ibid., p. 183.

32

INTRODUCTION

ever senior, is dwarfed by comparison. The Company was already large, yet it was still managed on a personal and informal b a s i s . . . informal and personal management had succeeded for many years and was valued by those who worked in the Company. They feared that greater formality would be more impersonal and less comfortable - a feeling shared by the Managing Agent. 15 The informal and traditional nature of existing management was based upon a series of very personal relationships. Roles, as distinct from those who took them, and role relationships, as distinct from personal relationships, were of minor importance. 16 One of the forces that encouraged [family businesses'] growth derived from a feudal, but nevertheless secure, background in which the members of a family occupied the leading positions in an enterprise, and in return looked after, in their way, those who worked for t h e m . . . . In typical family business both leaders and followers could usually depend on one another, and accept their relationship. In the good family business the pattern could, and did, remain remarkably stable in spite of the frustrations for those non-family members who had aspirations to positions of p o w e r . . . .17 [In Sarabhai Chemicals] Expansion and diversification had been possible on the basis of the informal and largely unstructured role relationship that had existed among [Dr. Sarabhai's] managers, but the quality of the relationships had depended almost entirely on personal loyalty to h i m s e l f . . . , 18 The former more informal and personal system of management had allowed Dr. Sarabhai to communicate with, and give orders to, anybody at any level without any implication that he was thereby criticising his immediate subordinate. 19 Our own previous research in India, however, suggested that even if the existing practices in Indian business were still paternalistic, many Indian businessmen held a widely different set of sentiments, imported from the West, about the way business ought to be. Indian businessmen held these beliefs, similar to Rice's on formalization, often in direct contrast to their simultaneous beliefs about obligations, relationships, authority and status in the traditional family system. Perhaps the central characteristic of these management beliefs was an emphasis » " "

Ibid., p. 180. Ibid., p. 188. Ibid., pp. 208-209. 18 A. K. Rice The Enterprise and Its Environment, p. 118. » Ibid., p. 172.

INTRODUCTION

33

on rationality of decison-making, a deliberate attempt to make decisions objectively and impersonally. Emotions and feelings were considered to be out-of-bounds, and consequently a large number of formal rules were explicitly framed in advance, so that all cases covered by these rules could be dealt with impartially. For example, the younger brother of the Chief Executive in the Metal Company of India stated: In the company, my relationship shouldn't make any difference. It's not important what my relationship to anyone is, but rather my position in the company. But even though the relationship should not get into the company positions, it sometimes does; I can't help it In short, I don't know if one can be more effective in work, but one can pull on better if he's less sensitive - forget about feelings, emotions and sentiments, and one can get along much better. Subordinate one's own sentiments and ego to others' sentiments and get along much better. Relationships shouldn't make any difference in the business but sometimes you can't help their getting mixed together.20 The General Manager of a family-owned textile mill, while discussing what he considered to be the chief engineer's lack of delegation, said: While we are not perfectly organized here, we still have a bonus system, we have very good security, and we have promotions reasonably regularly We wanted Pandya to give a sketch which showed the lay-out of the cables in the Factory. The Managing Agents said they wanted to have a lay-out so that in case Pandya falls sick or a contingency arises we would still be able to locate the cables You see, we want a continuity of the organization; we need a 21 second line of management Similarly, a top executive of a very large family-owned company claimed that: The trouble with most Indian concerns is that management in them is too informal. Let me be clear: by informal I don't mean that management is too friendly, but that it does not closely enough follow formal organization channels for communication. 'Informality' is just !0

"

From the "Metal Company of India (A)" case. From the "Naroda Mills (A)" case.

34

INTRODUCTION

another way of saying that there is too much bypassing of executives going on. Just as in a feudal system, the loyalty of employees goes directly to the person rather than to the organization as a whole. The loyalty goes to the Agents because that's where the power lies, and every employee tries to be in the good books of the Agents because he knows his immediate bosses are really powerless. While in a few companies the family Agents are trying to professionalize and become more formal in their relationships, it's very hard for them to change their personalities.22 Some other beliefs held by many Indian managers were that work was supposed to be divided and specialized; with the various tasks coordinated through a hierarchy of authority, its power circumscribed also by formalized rules. Positions in this hierarchy were supposedly attained through merit, on the basis of performance rather than on ascribed status factors such as age, family background or religion. Loyalty to the organization and effective performance were presumed to be motivated by monetary rewards. For example, the managing agent of a textile mill, had felt for some time that Shah Mills' management, including himself, had tended to be autocratic. Even he, though he was keenly aware of the need to give more responsibility and authority to lower level executives in order to develop a group of capable men who could help the company expand, found that he was making too many decisions in the company. On one occasion, he had even been asked by his Factory Super-intendent to choose what flavour icecream to have at a staff party! He believed that if Shah Mills was to grow in a significant way, it would need to develop its own men by training them to take responsibility for decisions.23 Another example was noted when the cousin of an executive wrote to his cousin asking for help in getting a promotion. Even though he said that "I am sure you will not leave stone unturned in this regard as I am one of y o u . . . and you c a n . . . give further push as [I am] your own man", he still devoted a full page to describing his abilities and the hard work he had put in.24 11

"

14

From "The Trouble with Indian Organizations" case. From "Shah Mills (A)". See "Cerjun Manufacturing Company".

INTRODUCTION

35

Further examples of the desire for formal and circumscribed authority were found at the textile mill mentioned earlier: You see, we are a small company and communication is done only informally. That we do by seeing the person involved or just telephoning him. The Engineer meets me every day and we talk things over. But we do try to do things here through the heads of the various departments like Spinning, Weaving and Processing. For example, the managing agents or myself will not go below the heads of the departments in order to give instructions to the workers. If we have circulars to be distributed we distribute them through the heads of the departments. Similarly, workers do not go to the Managers *or to the Managing Agents but rather take their complaints or suggestions to the departmental heads. The heads of the departments are responsible for their respective departments and I act to coordinate between various departments.... I know that the conditions for working in this mill are par excellence with other mills. The pay here is at least equal or higher to other mills in the c i t y . . . . The idea of the master and the servant is changing. Now we are going to face the problems of too much delineation of rights and duties... ,25

In practice, of course, many of these 'desired' modes of organization are modified, ignored, bypassed or found to be unworkable, often because in the struggle between beliefs about how business relationships should be and how family relationships should be, the family beliefs are placed first. By now, furthermore, the virtually universal existence of informal organizations within business enterprises, quite different in structure and relations from the formal, has been well documented. Yet the philosophy associated with the above 'desired' characteristics is still widely held and practiced, with some possible justification. Burns and Stalker, for example, found that for companies with stable markets, and constant (and relatively low) rates of technological change, mechanistic management practices (which are similar to the above 'desired' characteristics) were best suited to accomplishing the firm's objectives. But companies operating in increasingly changing environments were more successful when the management practices and struc25

From "Naroda Mills (A)".

36

INTRODUCTION

ture were more 'organic'. Burns and Stalker's idealized descriptions of 'mechanistic' and 'organic' are as follows: In mechanistic systems the problems and tasks facing the concern as a whole are broken down into specialties. Each individual pursues his task as something distinct from the real tasks of the concern as a whole, as if it were the subject of a sub-contract. 'Somebody at the top' is responsible for seeing to its relevance. The technical methods, duties and powers attached to each functional role tend to be vertical, i.e. between superior and subordinate. Operations and working behaviour are governed by instructions and decisions issued by superiofs. This command hierarchy is maintained by the implicit assumption that all knowledge about the situation of the firm and its tasks is, or should be, available only to the head of the firm. Management, often visualized as the complex hierarchy familiar in organization charts, operates a simple control system, with information flowing up through a succession of filters, and decisions and instructions flowing downwards through a succession of amplifiers. Organic systems are adapted to unstable conditions, when problems and requirements for action arise which cannot be broken down and distributed among specialist roles within a clearly defined hierarchy. Individuals have to perform their special tasks in the light of their knowledge of the tasks of the firm as a whole. Jobs lose much of their formal definition in terms of methods, duties, and powers, which have to be redefined continually by interaction with others participating in a task. Interaction runs laterally as much as vertically. Communication between people of different ranks tends to resemble lateral consultation rather than vertical command. Omniscience can no longer be imputed to the head of the concern. 26 A body of literature has developed which elaborates on the idea and general desirability of organic systems; 27 we accepted as a working axiom only that this style of management is best suited to conditions of changing technology and markets, while the mechanistic, including the characteristics spelled out earlier as desired in India, is more appropriate for conditions of stability, despite its costs. 28 Most companies in India faced little competition, in marketing or technology, though the growth of 28 Burns and Stalker, The Management of Innovation. " For example, Likert's New Patterns in Management, and McGregor's The Human Side of Enterprise. 28 "A pyramidal structure of authority, with power concentrated in the hands of few . . . was, and is, an eminently suitable social arrangement for routinized tasks", from Bennis, Changing Organizations.

37

INTRODUCTION

the economy has been slowly changing this situation. Yet it was Western ideas about rationality, impersonality, etc., the tenets of mechanistic practices grown from 'scientific management', which appeared to be affecting values and norms for behavior, especially in business situations. Family values and norms were also affected; because the family system and the business system were likely to have different rates of change, we predicted that difficulties would emerge.

JUXTAPOSITION OF FAMILY SYSTEMS AND BUSINESS SYSTEMS

If business systems with the desired goals of impersonality, meritocracy and decisions by rules co-exist with traditional family obligations, expectations of loyalty, submission of individuality to family goals, and unlimited authority, we would expect to find severe inter-role conflict. Many of the conflicts faced by family executives in our previous research seemed to arise out of such conflicts in the degree of traditionalness in the business and in the family. Consequently, the difference in traditionalness between the role expectations and requirements of the family and of the business was taken to be a crucial dimension for understanding the pressures leading to interrole conflict. We did not assume that present-day Indian families were all organized along traditional lines; rather we determined to investigate to what degree the particular families studied were traditional in their relationships. Similarly, we would investigate the existing management practices and attitudes, so that we could determine to what degree management was traditional in its behavior. For each company, then, we would develop estimates along two dimensions: traditionalness of the family system and traditionalness of the business system. Traditional Family: Business:

Non-Traditional

1

38

INTRODUCTION

Thus, each company could be seen as having one of four patterns, most easily visualized as one of the four boxes in the following chart: Table I.

Business Traditional

Family

Non-Traditional

Traditional Non-Traditional

Different kinds of behavior and problems might be associated with different combinations of family and business systems; we anticipated more difficulties when the two systems were different than when they were both traditional or both nontraditional. Further complications were expected if there were differences among and within the family along either of the dimensions. For example, the younger generation of a family might be much less traditional in family values, attitudes and obligations than the older generation; differences in the family system might or might not then be reflected in the business system, or the entire management might be in transition in its traditionalness. Thus in any one company, it might be possible to find any one of the following combinations of business and family systems: Table II.

Business

Traditional Family System

Traditional Transitional i>jon.tl.a(jjtjonaj

System Transitional

Non-Traditional

| |

Within the limits of our resources, we wanted to know which of the possible combinations actually existed, what behavioral consequences emerged from those we found, and more particularly, which conditions produced inter-role conflict and how it was dealt with in each case.

INTRODUCTION

39

EXAMPLES OF POSSIBLE ISSUES CREATED BY DIFFERING FAMILY AND BUSINESS TRADITIONALNESS

On the basis of our earlier research and observations in family companies, we anticipated conflicts manifesting themselves in a variety of possible situations. Such conflicts for the family member manager could arise, for example, around questions of merit. What should a father do about an incompetent son working in the company? Maintenance of the family might mean protecting a son, even an incompetent one, while welfare of the concern might require getting rid of him. Should a nonfamily member with needed skills or managerial ability be promoted ahead of a family member? Should untrained distant relatives be hired because of family obligations? In terms of the allocation of influence within the company, what should the family manager use as his criteria? Should he rigidly follow the traditional family principle of age-grading and strict hierarchy, even in a company which by its markets and technology needs to utilize skills wherever they exist, or should he allow influence to those with expertise? Similarly, in relation to loyalty, how freely should a family member disagree with another? Should a relative's poor performance be criticised? Should a family member in a lower position report about poor performance of non-family members even when what he sees does not come within his assigned sphere of company activities? Should he be included in high-level discussions just because he is a family member? Should a family member not interested in business feel obligated to enter the business to 'help out'? This list of issues was by no means exhaustive, but suggested the centrality and proliferation of possible conflicts arising from differences in family and business traditionalness. Actually, these and many more issues were observed in the companies researched, as reported later. It is important to recall that we planned to assess the consequences of the way in which these issues were faced along at least two main dimensions: individual development and company growth.

40

INTRODUCTION

We wanted to see what combinations of degrees of family and business traditionalness produce such inter-role conflicts, and what mechanisms exist for dealing with these conflicts. We could then assess the consequences of these conflicts not only for the individual growth and development of family members caught in such positions, but also for company performance and growth, and thereby economic growth. But since our study was intended to be exploratory, we also planned to investigate other possible consequences of family businesses for company growth, economic growth and individual development.29 Even family systems and business systems which are both similar in their degree of traditionalness could have important variations along these dimensions. For example, although both family and business might be traditional with no resulting inter-role conflict, there will still be interesting consequences along our dimensions as a result of the traditional practices in the company. The family goals, for instance, may be elaborated around security, mutual welfare and protection; though company goals can be the same - in many familyowned companies they are - such goals would not aid the economy to grow, and in an economy which is developing could lead to a failure of the firm to survive. Where there is competition, active efforts to grow may be necessary just to maintain present size - or to survive at all. Similarly, subservience to elders in the traditional family was probably functional to preservation of the family when the family was part of a society in which individual position was relatively fixed by birth (ascribed status). One's subservience guaranteed compliance with unpleasant demands made by the elders, and in turn one received protection and security. In such a family, when the eldest male exercised his awesome influence, the family members receiving directions maintained respect and distance, though not affection, and avoided unnecessary interactions. As Homans suggests, this may be a univer" For some generalized issues raised by family business, see the two chapters on family business in E. J. Miller and A. K. Rice, Systems of Organization.

INTRODUCTION

41

sal phenomenon: When two persons interact with one another, the more frequently one of the two originates interaction for the other, [i.e. utilizes authority] the stronger will be the latter's sentiment of respect (or hostility) towards him, and the more nearly will the frequency of interaction be kept to the amount characteristic of the external system [i.e. requirements of the job].30

In a traditional family this may have worked well, since little upward flow of information was necessary (what could a son tell his father about digging with a hoe, for example?), and negative sentiments were suppressed. But in a business enterprise of any complexity, information must flow rapidly to the right points for decision-making, and a relationship of distance might prevent this. Thus, we postulated that it would be important to explore the kinds of distance - and influence-relationships in family companies and how they relate to company growth. SUMMARY

We concluded that the characteristics of the traditional Indian family are in many ways different from the characteristics expressly desired for business enterprises, and we expected many possible difficulties if traditional family behavior was carried into the family business where family members desired different behavior from themselves and others. The object of our research was to see if in fact family businesses in India have problems of the kind described, under what conditions these problems occur, how they are dealt with or avoided, and what the effects of these problems are for individual, company and economic growth. At the same time, we looked for possible advantages for family companies: What is gained by having family members together in a business? In this process we examined the extent to which family and/or business attitudes are no longer traditional, and the effects on the family company of the degree of traditionalness of each family. 30

Homans, op. cit., p. 247.

42

INTRODUCTION

From this investigation we hoped to gain an understanding of how family businesses in India operate, to shed insight on inter-role conflict and its resolution, to make a start on developing ways of measuring the traditionalness of family systems and business systems, and finally, to suggest some policies for operating executives of family companies in transition. In this way we might contribute to individual and corporate growth, and thus India's economic growth.

METHODOLOGY

In order to draw broad implications, we needed to investigate a wide range of cases where family and business systems, as expressed through role expectations, norms and values, might not coincide. Were there companies into which family behavior was carried where it was a disadvantage, an advantage, or neither? What was the range of family traditionalness in current Indian family businesses? What combinations of traditionalness in the family business existed? Given the kinds of questions we wanted to explore, and having had the benefit of intensive clinical work in one Iron and Steel company, we needed to study more than one or two family companies. Yet the nature of the information we sought was so intense, personal and largely unexplored, that we were convinced it could not be obtained through any impersonal research method such as a mailed paper-and-pencil questionnaire. Consequently, we settled on a middle range of techniques, more diverse and systematic than pure case studies, but less rigorous, global and predetermined than hypothesis-testing surveys. Accordingly, utilizing all the information, hunches and puzzlements from our earlier case research and pilot project, and all the implications we could draw from our descriptions of the traditional Indian family and the currently desired business practices, we compiled a long list of mostly open-ended questions to be asked of each person interviewed. After trials of the questions with a few Indian friends in family businesses,

INTRODUCTION

43

and consultation with Dr. Kanwal Mehra, an Indian psychiatrist with research experience, a questionnaire was prepared (see Appendix II). The questionnaire was primarily used as a reminder to the researcher to cover at least those topics in it, but all leads given by the interviewees were welcomed, encouraged and explored as fully as possible. Average interview time per person was approximately four hours, but in several instances interviews or personal discussions with enthusiastic subjects totalled twenty to forty hours, plus direct observations. All interview data was written at the time of the interview as close to verbatim as possible, as the extensive quotes in the next eight chapters suggest.31 Briefly, the questionnaire asks respondents about present and 'ideal' business practices, in order to assess their degree of traditionalness and reveal their business role expectations. Similarly, the degree of traditionalness in family practices and role expectations in the family were obtained by questions relative to family behavior, present and ideal. The inter-relationship of family and business practices is also explored, as is company and individual history. The design of our questionnaire and the choice of whom to interview differs from the procedures used by Kahn et al. in their study of role conflict. Though they distinguished between 'objective' and 'experience' role conflict their focus was on 'objective' conflict, which they determined by asking assumed role senders to express ways in which a particular individual (called the 'focal person') should change. The role senders were chosen primarily on the basis of positions adjacent to the focal person on the organization chart of the company, and were asked to react to a list of work activities previously prepared by the focal person. The nature of our population, however, allowed us to work differently. Each of the family members working in the comS1

For an excellent discussion of the kinds of assumptions and procedures we utilized for interviewing and their justification, see Chapters I and II in C. Argyris, Understanding Organizational Behavior.

44

INTRODUCTION

pany was treated as a focal person, who both received and sent role expectations to and from others in the company, particularly family members. We assumed that in the process of interviewing all the family members in the company, and the important non-family executives, a general pattern of pressures or expectations would emerge around such general and important questions as how and on what basis should influence be allocated, how should decisions be made, how much part should outside (family) relationships play in the business. Such questions must be faced by any member of any organization, regardless of the specific content of the tasks assigned to or required of him. It was in relation to these types of issues that we postulated that role conflicts were likely to emerge, and we were interested in knowing how each family member perceived such; business and family pressures impinging on him. We further postulated that role ambiguity would not be an important problem; i.e. we assumed on the basis of our earlier research that individual family members would know only too well the differing expectations of others towards them, and that the important problems would arise from attempts to cope with conflicting pressures. At the same time, we suspected that a person was not likely to identify role expectations as coming from individual senders,32 but rather would feel them as a generalized impression, accumulated over time, of the demands on him in that particular role. Consequently, we decided not to examine or explain why some individuals perceive inter-role conflict when they are receiving no observable conflicting role pressures, or vice versa; while an exploration of the personality bases for false perceptions of social pressures would be a worthwhile project, we have only touched on it peripherally. Though in a few instances we shall mention that the perception of pressures is not wholly consistent with the apparent pressures sent by others, we shall keep our focus on the receiver. We adopted this strategy (choice of focus can be no more than a strategy, after all), for the following additional reasons: 82

This concept is elaborated on and an example given in point (2) below.

INTRODUCTION

45

(1) The only evidence readily obtainable for actual role pressure sent is what the role-related people interviewed say they send, which may or may not be all they send, overtly or covertly. Role senders may not be fully aware of or articulate about their expectations. While the same could be argued for receivers, we believed that it would be easier with depth interviews to uncover feelings arising from what is being 'done' to the subject than what the subject actually does to others. (2) All relevant role senders may not be easily identifiable or available for interviewing. In at least one case, for example (Reddy Engineering), it turned out (and Will be apparent in the write-up) that one person's perceived role pressures came in a large part from somewhere outside the immediate members of the family and business systems. For that person (Mr. S. Reddy), just being a partner in a company carried with it a set of pressures in his mind which came from either his education, his generalized cultural experience, specific outsiders he knew and respected - or perhaps all three along with other sources we have not recognized. (3) We predicted that the consequences of inter-role conflict for company growth and individual development would be just as severe when conflict was perceived as when it was actual; perceived conflict must be coped with no less than actual conflict, and the perceiver would feel equally pained by imagined as by genuine pressures. In the final analysis it is how we see the world that directly affects our behavior, though the world, to be sure, manages to intrude on our perceptions from time to time. The point at which the difference between perceived and actual pressures becomes acute is when one attempts to treat a problem, and at that point, the diagnosticianchange agent would need to investigate thoroughly the source of the perceived pressures. (4) Though Kahn et al., make the distinction between 'experienced' and 'objective' role conflict, and though they treat personality as an interviewing variable between role conflict and the responses to it, their data suggest that personality differences, and hence perception, are not the central issue

46

INTRODUCTION

in understanding role conflict. That is, they do not use the distinction often in analyzing their data, and report in relation to neurotics vs. non-neurotics, for example, that: The evidence urges the conclusion that 'neurotic' and 'non-neurotic' reactions to role conflict are substantially similar, and that sufficient environmental stress may produce neurotic symptoms even in those who show little predisposition to neurotic anxiety, (p. 262)

We took this, then, as an indication that we were unlikely to seriously distort our findings by focusing on perceived or experienced role pressures, and that we need not be overly concerned that we would obtain reports of inter-role conflict which were not based on actual pressures. Let us be clear that the strategy we followed was not without its limitations. The attempt in questioning, and later in our analysis of the data, to separate the family from the business system in each company proved to be difficult and occasionally artificial. Many of the respondents had extreme difficulty in conceptualizing the demands, norms, expectations and obligations of each system apart from the other, as will be evident in the cases. Particularly in companies which were in a strong transition process, the family and business were intertwined in the minds of the family executives. Though to some degree this in itself is the relevant finding, we thought it beneficial to force the data apart in accordance with the separate sections of our questionnaire. Where necessary we have supplied ample quotations - at the risk of appearing repetitious - so that the reader may judge by his own criteria whether the conceptualization of the family and business as two different systems is justified. We must remember that we are dealing with perceived role pressures which exist primarily in the minds of men - an ornery place in which to search - and we shall do our best with the material we have. We hereby alert the reader to the problem, asserting as we do, that perceived family pressures are separable from perceived business pressures if we pry hard enough, and that the increased understanding of inter-role conflict which we hope to gain is worth the effort.

INTRODUCTION

47

SELECTION OF COMPANIES

Using personal interviewing, an admittedly slow method of collecting data, we wanted to be sure that those family companies studied were different enough from each other to ensure that we were not just looking at one typical stratum of the varied family-dominated business in India. In order to select a sufficiently diverse sample, we listed several variables which might affect the traditionalness of family and business expectations, or affect the functioning of family business in other ways: (1) The community to which the family belonged might influence the traditionalness of family role expectations, and therefore the way in which family members behaved in the family business. Parsis and Marwaris, for example, were reputed to be at opposite ends of the spectrum in terms of traditionalness of business practices.33 Therefore, members of diverse communities should be included. (2) The number of family members involved in a business might be a reflection of traditionalness, and might well affect the company's performance. A large number could be an advantage or disadvantage: If there were few family members, growth might be limited; on the other hand, it might force use of outsiders which could then lead to rapid growth, or to faltering growth due to mistrust or inability to use outsiders' skills effectively. If there were a large number of family members they might: (a) strangle growth, if many were incompetent or if the top family member's attitude was, "If I expand I will just have to share my increased earnings with my relatives", (b) be forced to find enough members who are competent so that growth can be built from within the family, (c) cause the company to grow in order to ensure positions and income for all. (3) The complexity of the company's technology and environ83

See W. McKelvey, "Environmental Influences on Two Indian Business Communities" (unpublished Master's Thesis, M.I.T. 1962).

48

INTRODUCTION

ment might affect the ability of family members to manage it successfully. It was expected that the more sophisticated the technology and the greater the rate of change in the market and technological environment, the greater the need for outsiders in a company and the greater the need for a non-traditional business system, which would probably be associated with a non-traditional family system. A simple technology might not call for skills not available in the family. There might also be a self-selecting factor, in that non-traditional families which have confidence that they can work with outsiders (perhaps because they have acquired some management tools like control and budgeting systems) might go into more sophisticated technologies. (4) The size of the company might also affect the ability of family members to manage successfully. Presumably, the larger the company, the more 'managerial' skill would be required. The more subsystems in the company, the more coordination towards the overall goals of the company would be required. We expected that in larger companies more outsiders would be necessary, or that if there were no outsiders, only relatively non-traditional families with a large amount of acquired skills would be running them. Assuming that variations along any or all of these four criteria could affect the degree of traditionalness, we arbitrarily divided each criterion into a number of clear-cut sections which seemed to give a sufficiently wide range to guarantee that any important differences associated with community, size, technology or number of family in the business would be revealed. Thus we developed a table representing the various dividing points of the four independent criteria. Any company chosen would fall in some category on each of the four criteria, though not necessarily in the same relative position. For example, the Iron & Steel Company which served as our pilot company would appear as (1) Gujarati, (2) Complex Technology, (3) over 500 employees, (4) over 6 family members.

49

INTRODUCTION

Table III Community

Gujarati

Size (Number of employees)

Under 25

Technology and Environment

Simple Traditional, little skill or machinery required. Little technical or market change

Number of family members in the company

2

Marwari

Bengali

25-100

3-4

TN°rth Indian

100-500

Medium Some specialized skill and knowledge needed, some changes occurring in the industry 5-6

TS°uth Indian

Parsi

Jain

over 500 Complex Several different departments needed, complex machinery, perhaps foreign collaboration. Relatively high rate of change in the industry over 6

Since the 'community' column of criteria had the largest number of categories (7), we used communities as the base point for company selection. We selected one company from each community such that in doing so, all boxes under other variables were finally filled by at least one company. The companies from the various communities were chosen purely on the non-random basis of where we could get permission to conduct the study. At the start, any size, technology, etc., company was acceptable, since all boxes were open. In two instances we had personal relationships with some members of the family before starting; in one case this made it difficult at first to get honest replies from the other family members, necessitating extensive and repeated interviews. On the basis, however, of the intimate nature of the data eventually collected in this company, we feel reasonably sure that nothing important was distorted or withheld from us. A third company was located through someone in one of the first two, and a fourth was recommended as 'interesting' by an executive in our pilot company. The remaining four were obtained through the referrals of friends, prompted by my requests to suggest companies which would fill boxes in the criteria table that were still not covered at that point.

50

INTRODUCTION

It is worth reporting for future researchers that in both of the two companies in which our entry was through a junior family member, we encountered difficulty in getting full permission to proceed. In each of these cases, we had to agree to confine initial interviews to a few lower-level members of the family, as a way of indirectly 'testing' us and the questions we asked. Only after we were well into our research in each company did we know if we were going to be allowed to continue, a rather unnerving and risky way to proceed with research; of course, the procedures provided very overt 'evidence' of the extensive power of the elders! Fortunately in each case we were allowed to proceed, and eventually obtained fascinating and important data directly from the elders. In one of the cases, however, interview time with the eldest member of the family was severely restricted throughout, a fact largely compensated for by the generously given time of the other seven family members in the company. (Thus one functional consequence of a large family in business was vividly illustrated). A description of the companies finally selected and studied will give a profile of the population actually covered. The eight communities represented were: Gujarati Marwari (living in Gujarat) Bengali North Indian (from near Delhi) South Indian (Madras) South Indian (Brahmins from Andhra Pradesh) Parsi (living in Gujarat) Jain (living in Bombay) A total of aproximately 50 family members and key nonfamily executives were interviewed intensively from these eight firms, totalling over 200 hours of direct interviewing. To preserve the disguises given these families in the cases, we will not identify which family goes with the data for the remaining

INTRODUCTION

51

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