Continued from part-I
To read the part –I please click on the link:
http://trifter.com/asia-pacific/israel/the-warring-business-clans-of-india-historical-perspective-i/
Some branches survive and flourish, while others fall and wither by the wayside. So fell KN Modi’s two brothers in a similar dogfight some couple of decades back. So may his own fate be, fears KN Modi, if the five sons of his late brother, Gujjar Mal, manage to wrest control of Modi Rubber.
This pruning is perhaps a natural corollary to the graying of a joint family and tends to take place within a decade of a generational change. During the first few years after entering the family business, youngsters are busy learning the ropes. Having grasped these, they then want to show their enterprise, to foster growth of their own creation to prove they have not merely inherited their positions but are capable businessmen in their own right. As Vijay Mallaya the inheritor of a US$506 million liquor empire once said, ‘in 20 years tome, I will be known not as a spoilt kid who inherited a business but as a king in my own right’.
Moreover, in many business families, certain aggressiveness is consciously encouraged. As industrialists in the making and future managers, juvenile offspring are taught to be decisive, to be in control. Educated on the high pressure grounds of Wharton and Harvard, they are taught competitiveness very early, like prize horses carefully groomed to win the corporate sweepstakes.
The Modis in particular have tried to make a virtue out of fraternal friction and for many years insisted that their rapid business growth was a direct result of internal competition. Various branches of the family have been chewing each other up for more than 20 years, but curiously, they have managed to grow apace in terms of business expansion at the same time. Before 1967, few corporate monitors had even heard of this group founded by Gujjar Mal Modi, a North Indian with interests in food processing who made a fortune during World War II.
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The group came into national prominence mainly during the 1970s when, in quick succession, they promoted several money-spinners: Modipon, a synthetic yarn and Fiber Company, Modi Rubber –tyres; and bought out Godfrey Phillips-cigarettes, and Bombay Tyres International –tyres. The frenetic pace continued in the 1980s as the group tied up with major multinationals like Rank Xerox, Blue Cement and Olivetti to begin the production of a host of new products.
According to Krishna Kumar Modi, Vice Chairman of the group who heads albeit reluctantly the revolt against the KN faction, the group’s scorching pace is a direct result of the rampant rivalry amongst its members. In fact, in the winter of 1982, amidst strong rumors that the family was just waiting for his daughter’s wedding to get over before announcing the group’s disintegration, KK had emphatically stated- ‘the Modi Group will never separate like other groups. Competitiveness is our strength – not our weakness. Naturally nine very strong businessmen are going to have their own points of view and even disagree with one another.’
Though the warring clan ushered in 1988 with violent clashes, the perennially optimistic KK insisted that tensions would soon ease- ‘over the last few days, all nine of us have sat down, worked things out and come to the conclusion that it is better to stay together than to separate.’ In view of recent events, his words have an ominously hollow ring.
Continued to part-III
