Tag Archives: conflicts

Don’t Mix Business With Social Pressures :

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Pre-independence my family was in the tobacco business in Bellary, mainly dependent on consumption by army. Post independence, the soldiers were moving out of town. This reduced the demand for tobacco products drastically. Our neighbours produced a competing brand. Now, though the demand had plummeted, fearing that we may lose the labour force to the competitors, our family continued production at full capacity – suicidal. Obviously, stocks started piling up.  Hoping that suddenly better days would come, excess stocks were stored in a warehouse located just behind the manufacturing unit.

Bellary is well known to have only two seasons a year – hot and very hot.  Normally it doesn’t rain much in Bellary and ‘heavy rains’ were not heard of.  However, on one of those days around 1955, there were very heavy rains, so much so that the roof of the warehouse collapsed.  Tobacco products become unusable once they are wet.  The entire stock became worthless.  There was no known storm insurance concept at that time.  It was a heavy loss and the family could not bear this loss. At the same time, our business partner expressed his inability to bear his share of the loss and backed out.

That rainy night was the biggest setback to the family.  Imagine, just one incident, changed the entire fate of the family. The family, which was considered one of the richest in that locality was on the verge of collapse.

If we analyse the reasons for this collapse, there were a few management blunders.  The most obvious one – though demand had dropped permanently, production continued at same pace.  The production continued just for the fear that the competitor would take away workers.  On top of all, the most damaging reason was the feeling that if production drops and we let go of labour, society will look down upon us, a fear of loss of face.

If the social pressure had not  influenced the business, the history of the family status would have be different.

In a “guidance program for the youth” where I am a mentor, I have observed that even in today’s  independent and forward-thinking age, young entrepreneurs are trapped with similar problems.  In one specific case, though the profit margins were good,  expansion was being made to impress customers and competitors.  Collection of outstanding was ignored, stating “that delay in payment is okay, as long as I get business”.  They somehow considered that demanding the payments was unsocial from the people of high status. These so called high status guys took full advantage and effected the payments at their own will and wish.

On scrutiny, it came to light that though the customers were very happy with the socially-rich vendor, it led the business to cash starvation so much so that the business was at the brink of closure.   After studying the figures, I had to advise the owners, about 8 months ago, that for the sake of survival, they had to come out of this “social complex”.   Luckily they heeded to the advice.  On their path to recovery, they had to offer hefty discounts to get outstanding dues. Certain debts turned bad and led to legal recourse.   They closed all their unprofitable wings, stopped dealing with the late pay masters and concentrated on the healthy portion of business.  Though it was a painful process, atleast they survived.  They are now about to turn the corner, within 6-8 months.    However, had they continued with the “Social ego” problem, they would have definitely closed down by now.

Whenever we have problems, we start getting influenced by what the society would think. After I qualified as a Chartered Accountant, when I was in the Middle East, I had the opportunity to study the reasons for many loss-making businesses internatioanally and suggest corrective measures.

I observed, particularly in cases of businesses owned by high profile owners, that though they knew where they were making losses, they were not willing to take action. And in most cases, the reason was for fear of society.

The business normally have activities which give decent profits as well as loss-making activities.  Profits generated by certain activities are eaten up by by loss-making activities.

In one of my assignments, I had to face a severe ego problem.  They were very hesitant to close down the loss-making units just because when the owner would be in his social circles the next time, someone would say “oh, you have closed down so-and-so business”.  They sound sympathizing but are actually sarcastic. This was a case of ego clashing with business decision.

I then had to argue: “One, are they going to come forward and help you if you start going down the drain. Two, how hurt would you be in the social circle, if you had to close down the business completely, which is likely to happen if you continue to lose this way.  Three, those who are real businessmen, would appreciate your decision as an aware and sensible one. Please ignore society on this matter and do what is best for you”.  He ultimately listened, his business survived.

For the sake of our own survival, let fear of society not influence business principles.

Author: Badri Baldawa                                                                     Editor: Meeta Kabra

Affordable Traditions

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“This is the marriage season, I will be very busy”, said a neighborhood moneylender. How do weddings make a lender busy?

Did you get it?

Weddings obviously mean business to many like caterers, decorators, jewelers, etc.  We missed out another category of businessmen who look forward to the wedding season – The moneylender.

The affluent lay down certain traditions to show-off their prosperity.  In the process, probably they do not realise the quantum of damage they cause to society.

A practical example.  In our town, at any wedding, the entire community was invited for three full course meals. ‘Sigree noota’ – all the members in every family were on the invite list. This translated to 200-250 people on two of these meals and 400 people for one of them because people from the neighbouring townships were also invited.

Funnily enough, for those who could not attend, a parcel to their home! Obviously, these meals mean a lot of money.  Someone who probably wanted to boast about his wealth must have started this and with time this became tradition.

Those who did not have adequate sources of income, also had to host three meals.  They were worried that if they failed to host 3 meals they would be looked down upon by the community. Their fear was valid.

Whenever invited by the affluent class, even the members of the low income profile families would go for the dinner.  Not attending was considered as an unfriendly act. Once they went, it was understandably difficult to avoid inviting when there was a wedding at their own home – an endless chain.

Think of the amount of harm this tradition caused.  Those who could not afford, borrowed money.  Some sold or pledged their homes to finance the meals.  A few had to convince their wife and daughters-in-law to sell or pledge their ornaments and jewelry.

Obviously, loans from banks was not available for weddings.  Therefore, they had to borrow from private lenders. The maximum amount a moneylender would lend would be about half the value of the property pledged. An additional condition was that if the loan was not repaid before the amount accumulates to the total value of the property, the owner lost his right to the house or the jewelry.  The interest on private borrowing was anything from 24% to 36% (usually monthly compounded) per year.  This means over a period of 2 to 3 years, the amount repayable would double.  In short, within 2-3 years if the loan was not repaid, hard earned pledged items became the lender’s property.

Why? What is the root cause?  Is it just to maintain a tradition in the society? Will the society for whom this has been done come to his rescue? No. Just forget it, they would be busy gossiping!

The irony is it hardly made any difference to the guests, but the host was doomed. It wouldn’t be surprising if, in certain cases, it led to suicides. What is the point of following such traditions? Inspite of knowing the consequences, no one dared to amend or rectify.

Justification : “why should I be the first one to defy tradition?  Let someone else take the blame”.

Solution?

If we can sensibly act.  For example, at my wedding in 1971, we were reasonably better placed financially and could have managed to host 3 meals easily.  For me, this was an opportunity.  I explained the above consequences to my dad.  He was well aware of such unnecessary burden on some people in the community.

I suggested “Kakaji, why not we restrict the wedding celebration by hosting just one dinner? Let us take the blame for curtailing this tradition and the change could save someone”. My dad was in favor of a positive change in the society and he readily agreed.

Yeah, we did it!  We changed over to all-in-ONE dinner for my wedding.  It is almost 43 years since then and this system is followed to date!

This is just an example of one tradition at a wedding.  Sure, there are many other such opportunities at weddings, but the same principle hold good for birthday celebrations, religious ceremonies, anniversary functions, death ceremonies, etc.

Value of return gifts is another classic example.  If you can take a bold lead in curtailing them down, you have done a great service to society. My appeal to youngsters – Enjoy and Celebrate in life. But sensibly, curtail the formal events to the extent everyone in the society can afford.

I have constantly tried over 40 years ‘Take no gifts and give no gifts.” Some firm traditions of giving and accepting gifts have discontinued in the family.  However, I was only partly successful. But you could do better, will you?

Written: Badri Baldawa                                                      Edited: Meeta Kabra

Joint Family Culture – An Experiment:

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“Get married, stay independently and live your life.” – A message to all my brothers.  In the 70s, such a statement was considered revolutionary, at least in our Marwari community!

Joint family structure has the advantage of members sharing each others’ responsibility. It also means that all members have equal rights on the total income made in the family, irrespective of the each one’s ability to contribute.

Gradually, with higher education, wider options of living standards, and modern lifestyle, slightest lethargy by any member wasn’t tolerated by those who contributed better to the family, especially financially.  Even things like disparity in number of children and ratio of employed children, decided the status of a person in the family. With this, the ‘let go’ attitude and emotional factors started eroding to a large extent.

This created a class differentiation within a family. For some time they tried to suppress a lot of their individual desires. These suppressions accumulated and in course of time, burst into anger, frictions, and fights within the family.

Obviously, it started creating more conflicts and misunderstandings, ultimately leading to divisions in the family, with bitter arguments.  The joint family concept started eroding at a fast rate. Even the large and absolutely rich brothers amongst  families like Birla-Bangurs, Ambanis could not stay together.

In our own family in 1960s, two sensible, intelligent and experienced ladies would start fighting for no reason. We ultimately split but there was a surprise pleasant discovery for me.  After the division, the grudges between the two women disappeared very fast. Love and affection got prime importance, once again.  One wanted to help the other, even if it meant going out of way.

I learnt a lesson.  It is better to keep a little distance to maintain good relations.

I was about 27 years old when my dad passed away. I have 6 brothers and 4 sisters (3 unmarried at that time). If my dad’s family stayed together, we would’ve been about 25-30 members under one roof – each, obviously with their independent opinion.  Even if there were cordial relations, a divide amongst brothers would’ve been eventually, unavoidable.

The question then was if one should wait till misunderstandings develop, then fight and separate? I therefore thought, it was definitely better to stay separate from the beginning, well before frictions develop and thus retain the love and affection between the family members.

I resolved that I should take my father’s responsibility to educate, support and set-up my brothers to a stage, from where they can lead their own life. My aim was for every brother to have his independence in running his family.  At the same time there should be cordial relation, love, and affection amongst us. It was a challenge for me to devise the right formula.

It was easier for rich and industrialist families to resolve this: Divide the assets; give each of them nice places to stay; allocate enough finance and provide a base to carry on business for their future.  But the reality were different for me.  Assets were zero, bank balance zero, properties zero and the business, a big zero too.

However I was determined to go with my philosophy to the best of my abilities.

  • Accept responsibility. In the absence of my father, fulfilling my own requirements would not be my priority, till I complete my responsibilities towards educating and settling my brothers and marrying my sisters.
  • Prefer a job over business. Given my situation, limited but assured income was better than having own business where income might be larger but uncertain.
  • It would be in everyone’s interest that I draw a line until which I should shoulder my brothers’ responsibilities. I should support till they get married and have a house of their own. Thereafter each brother should stay independently and live their own life.
  • Initially since all of them might not have enough funds to buy a house, to those who need,  I would extend them financial support to the extent it was possible for me.  Any financial help would be a loan. This was so that they respect the value of money and so that they and their children could say it is ‘our own house’ instead of ‘tauji’s house’.
  • Since a home is an essential, to avoid undue financial burden in the initial stages of carrier, the loan would be interest free.

With the implementation of the above, every one was forced to realise his responsibility and be prepared to standby for anyone who needed help. There were hardly any arguments between brothers or their families.  Every one was at liberty to decide what is best for their individual family, without any interference from others.

In today’s lifestyle, even two married brothers staying together may not be practical. When I look back today, “once married, stay independently” was the right way to go between brothers. I am happy that my decision wasn’t proven wrong.

Written: Badri Baldawa                         Edited:  Meeta Kabra