A Peep into an Extinct Business Model

Dr. Trilok Kumar Jain
Published on: 16th March 2015
When people are coining new business models, let me take you to traditional Indian business model, where business runs like a family concern. In earlier times, the family values dominated business values, and therefore, doing something unethical was wrong both from business perspective and from family perspective (doing unethical in business will bring unethical things in family as family and business were inseparable in those days, which would not be acceptable in any case). Doing business honestly has been a goal for the person from family values and also from personal values.

It is very important today for a student of business management to study business models, particularly on ethical business. Traditional Indian business practices emphasized the goals of life and the spiritual values so much that in many families those values percolated down to business practices also. The western business models may have coined words like “Punch Line” or “Mission Statement” but, we can find similar practices in Indian business traditions for generations. The Duggar family has been carrying its business logo for generations (say over 100 years) which reads “Niyat Gal Barkat Hai” (this line means if we have good intentions and follow ethics then only we shall progress and prosper). This is not a punch line prepared today, but it represents the basic values that this family has been practicing for generations.

Family business is now disappearing in India, but it is an important case to study (before it is completely extinct). No person has any personal property, not even a room of his own. But everyone can take a decision for the entire family. Every property is a family property. A person can take a decision in the interest of family. Everyone would talk about important decisions in the evening in family joint meeting. Broad policy guidelines are provided by the elders, while the juniors share their day to day decision situations.
A Peep into an Extinct Business Model
Children are imparted family values, business sense, and decision making skills from the childhood. Every person gets practical training in the family business for 3-4 years, and thereafter, he may introduce a new business, manage it and show off his creativity and innovative ability. He would continue to get regular guidance and support from the entire family and his business would remain a part of the family business. Thus everyone is groomed for business leadership.

The Karta (the head of family is called Karta in Indian family business, and Karta has the most important role in business decision making) of Duggar family is Mr. Inder Chand Duggar. He inherited values of joint family business from his grandparents and he nurtured these values down to the family. He has created a system in his family that has helped the family of three dozen people from three generations to live together happily and undertake business activities collectively. All the males of the family would together take lunch and dinner and similarly all the females of the family would also take lunch and dinner together. This is not just taking food together, but it is to share love, care, and emotional support for the entire family.

The family has prepared its expenditure planning for next 20 years. There are plans ready for various family rituals including marriage, anniversary functions or other celebrations. Proper planning ensures that the family doesn’t face any problem in any function or event. Human values, spirituality, honesty, sincerity and commitment are considered more important than material progress or financial achievements. Simplicity and frugality are emphasized and these values are taught to the next generations.
Earlier this family was having its business in Assam. During 70's, when there was disturbance, the family decided to relocate itself to its ancestral place in Bikaner. Thus the family shifted to Bikaner and then opened offices in Jodhpur, Surat and other important places in Western India.

During business expansions, they have to select other business firms as partners. Their criteria are simple. They prefer to pick up firms, which also emphasize honesty, commitment and family business values in their dealings. Thus they are able to pick up similar firms as partners and they are able to have sustainable partnerships because both the firms carry similar values.
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