Wild, wilder, wildest!
The bane of the Bajaj Group is very clearly in their love to run their companies while owning them. It seems funny that neither Rahul nor the other owners have considered the fact that hiring non-family
external CEOs to run their family companies can in one shot resolve the family disputes about control; and also portray an extremely professional image of the group. In November 2006, Rahul boasted at a Wharton symposium, “There is no reason to believe that a non-owner (CEO) is more competent than an owner (CEO).” Sadly, with this statement, Rahul gave away lack of even skimming knowledge of research on the subject. Research from Harvard, London Business School et al has proved beyond doubt that family CEOs will eventually destroy firm value and ensure breaking up of groups. And now, according to the exemplary BDO Stoy Hayward Survey, only around 10% of family-businesses globally survive past the 3rd generation.
Dear Rahul, it’s already the third generation at Bajaj now, a group that has started breaking apart at breakneck speed. Was it a coincidence then that just this week news filtered out that you are finally searching for an outside CEO for Bajaj Auto? Perhaps... The New York Times writes about the movie Wild Hogs, “It’s a comedy about male midlife anxiety. Some of us may not find the subject so funny, but never mind.” Dear Sir, we know you don’t find this funny; it was never meant to be a comedy anyway; but we’re anxious, so are lakhs of your shareholders. And wild as we may be, we just can’t ‘never mind’!
external CEOs to run their family companies can in one shot resolve the family disputes about control; and also portray an extremely professional image of the group. In November 2006, Rahul boasted at a Wharton symposium, “There is no reason to believe that a non-owner (CEO) is more competent than an owner (CEO).” Sadly, with this statement, Rahul gave away lack of even skimming knowledge of research on the subject. Research from Harvard, London Business School et al has proved beyond doubt that family CEOs will eventually destroy firm value and ensure breaking up of groups. And now, according to the exemplary BDO Stoy Hayward Survey, only around 10% of family-businesses globally survive past the 3rd generation.Dear Rahul, it’s already the third generation at Bajaj now, a group that has started breaking apart at breakneck speed. Was it a coincidence then that just this week news filtered out that you are finally searching for an outside CEO for Bajaj Auto? Perhaps... The New York Times writes about the movie Wild Hogs, “It’s a comedy about male midlife anxiety. Some of us may not find the subject so funny, but never mind.” Dear Sir, we know you don’t find this funny; it was never meant to be a comedy anyway; but we’re anxious, so are lakhs of your shareholders. And wild as we may be, we just can’t ‘never mind’!
For Complete IIPM Article, Click here
Source: IIPM Editorial, 2008
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative
Source: IIPM Editorial, 2008
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative
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Strategic Alliance / Consulting / Intellectual Tic-up Partners Arindam chaudhuri GIDF Planman Consulting Business & Economy 4Ps Business & Marketing The Sunday Indian The Daily Indian Kkoooljobs.com
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