Blood runs thick in India Inc: Newsweek
The publication in its latest issue says family-owned monoliths in India still prefer insiders and relatives over better qualified outsiders and squabble unproductively.business Updated: Jul 16, 2008 18:37 IST
Corporate India, which has grown globally in stature, is still a far cry from the professional management as family-owned monoliths in the country still prefer insiders and relatives over better qualified outsiders and squabble unproductively, says US magazine Newsweek.
Commenting on the bitter battle between Ambani siblings, the publication said in its latest issue that the feud further underscores the need for the businesses to outgrow from their mostly family-run setups.
"Nor are such tantrums limited to the Ambanis -- many family owned Indian monoliths still favour insider, hire relatives over better-qualified outsiders, squabble unproductively, and ignore independent director's advice," the magazine said attributing the views to a managing partner at a private equity firm which invests in such companies.
Pointing out that Indian firms have been growing in competitiveness globally, the magazine said that "conventional wisdom has also been that subcontinental powerhouses are getting sophisticated."
Newsweek cited the recent merger of country's largest drug maker Ranbaxy Laboratories with Japanese pharma major Daiichi Sankyo as an example.
"Management is becoming more professional, too; bullish analysts point to the recent merger of Ranbaxy with Japan's Daiichi as a sign of a new willingness among India's CEO scions to move beyond the walled garden of family firms and team up with smart outside companies."