Resources are few, however, and the claimants are many. Indeed, in a country where one million people will turn eighteen every month for the next several years, job openings in corporations don’t yet match up to the demand, and the leadership pipeline is clogged.14 In the long run, economic development produces a more equitable distribution of income. In the short run, however, the immediate impact of economic growth often exacerbates the difference between the ‘haves’ and ‘have-nots’.
Those lucky enough to get these coveted corporate jobs work harder to keep their livelihood and to ensure professional growth. They multitask at work and adapt to gruelling work hours. As a result, while we are yet to excel at the Olympics, some domestic Indian companies which had modest beginnings about fifty years ago, such as the Tata Group, Bharti Airtel, the Jindal Group, Reliance, have thrived, provided value and employment to millions, and expanded globally.
Many of these large business houses in India are family-owned, which means that the founding family owns the largest stock among shareholders in the market. Majority shareholding, coupled with weaknesses in the implementation of labour laws, governance structures, reporting practices and government regulations in India gives these corporations vast powers to hire, fire and almost always do whatever they please.
As far as the employees at some of these organizations are concerned, the fragile nature of their fate at the hands of the company owner breeds a culture of fear, creating a ‘motivation vacuum’, often turning them into sycophants who seemingly work hard and long, but only when the boss is around. On the other hand, few Indian large business owners would be able to hold a candle to the vision, grit and patience of the founder, who is often the current owner’s father or ancestor.
Pooja Jain is the forty-year-old heiress of the $80 million Luxor writing instruments company, whose crayons have coloured the lives of children across India, and whose pens can be found in almost every literate household. The company was founded in 1963 by her deceased father, Davinder Kumar Jain, with five employees and an initial investment of Rs 5000.
Pooja’s father was known to be humble, polite and patient. He was methodical in his ways and caring towards his employees.
‘He only looked at the balance sheet and took the larger decisions,’ says Iyer, D.K. Jain’s former assistant.15
In contrast, this was how international business magazine Forbes described Pooja in 2014:
Pooja likes to micromanage and is demanding of her employees. She is known to work almost twenty-four hours a day, even on Sundays . . . Her colleagues say they can expect calls from her at any time of the day or night, even on weekends . . . It’s not unusual for Pooja to call them at 1 a.m. to talk about the business or brainstorm for new ideas.16
I had known Pooja well for half a decade, but we became closer after I moved to India to join the Jindals in 2014, the same year that her father passed away. At that time, D.K. Jain’s last will had instructed that the company be passed on to his wife, Pooja’s mother. Pooja used to run a part of the business with her father, and after he was gone, her role expanded to overseeing the entire group.
Pooja and I met often. I noticed that for the a few months after her father’s death, she would go about her day in a perpetual daze, without registering much of what was being said to her. Clearly distraught, she sought to rely on the company’s old guards at work for a while. Gradually, she regained her strength and her character. Emotional and affectionate in private, she was hardworking, boisterous and impatient when it came to getting things done at work.
‘Why are second-generation family business owners so erratic in their decisions at the company?’ I asked her while we were driving in Delhi’s Mehrauli area.
‘We are disruptors,’ she replied. ‘We shake up the company and make it open to constant change.’
‘How so?’
‘The company has to get used to quick decisions and action. Employees can expect a call at any time from me—it keeps them on their toes.’
‘But is that fair? To call employees at all hours?’
‘Of course—they get paid for it,’ she said, surprised.
Let us take another example. On 11 June 2008, Daiichi Sankyo, the third largest pharmaceutical company in Japan, made an offer to buy a controlling stake in Ranbaxy, the largest drug maker by revenue at that time in India.17 Daiichi’s purchase price of Rs 737 per share represented an enormous premium of 53.5 per cent over Ranbaxy’s average daily closing price on the National Stock Exchange for the three months ending 10 June 2008. The Japanese company was clearly excited about the deal.18
By November 2008, Daiichi ended up acquiring 63.92 per cent shares of Ranbaxy.19 Daiichi hoped that this acquisition would help the company establish itself in the fast-moving emerging markets as well as in the generic drugs sector of the pharmaceutical value chain. The acquisition also gave Daiichi access to Ranbaxy’s basket of thirty drugs, for which the company had approvals in the US.
Trouble began to brew in this deal—which had initially seemed to be an incredible win-win for both companies—when, in September 2008, the United States Food and Drug Administration (FDA) sent Ranbaxy warning letters regarding manufacturing practice violations at two of its plants, Paonta Sahib and Dewas. The FDA put restrictions on the import of drugs manufactured at these plants. In February 2009, the FDA also invoked its Application Integrity Policy against the
