Navigating Sethji Culture: How Do Family Companies Handle Cultural and Financial Challenges?

Hello Professional HR & Business Veterans,

Please find attached a very inspiring whistle-blowing watchdog entrepreneurial lesson in ET on Cultural Transition, Integration & Compatibility, and Financial Management of Family Wealth, i.e., Sethji Culture in Most Family Companies.

Dear Dilip,

The "Sethji" culture prevalent in India has reasons embedded in ancient times. India has never been a country of inventors. We never thought of introducing anything new to society. The "Toyota Production System" introduced the concept of lean manufacturing to the world. Walmart and Dell have provided the concept of efficiently managing the supply chain to the world. Today, studying Walmart means studying the supply chain, and studying the supply chain merits an examination of Walmart.

In contrast, our "Sethjis" were traders, and even today, they take pride in remaining as traders. In the past, Sethjis sold small items that were manufactured in India. Now they sell "Made in China" products. If you delve into history, you will find that the "Vaishyas," a section of society, engaged in business but never in manufacturing. This Sethji culture has origins in the "Chaturvarna" system of society.

The Sethji culture exists because we do not have a strong sense of originality. This lack of originality stems from being ruled by outsiders for thousands of years. Sethjis lack a global vision, and the common Sethji takes pride in competing with another Sethji, rarely considering competition with anyone overseas.

Thanks,

Dinesh V Divekar

Here's a similar discussion from HBR: [Family firms need professionals](http://blogs.hbr.org/cs/2011/03/family_firms_need_professional.html). I had shared my thoughts on the same. My views primarily pertain to upbringing. However, they fundamentally include small and micro-level enterprises.

This article considers the large business houses. Small and medium enterprises run by families are not mentioned here. These entities are not failures; rather, they strive for perpetuity rather than sudden gains. Small trading companies held by individuals from Gujarat and Maharashtra have been operating brilliantly. The reason is that the environment of these households nurtures children with the mindset required to succeed in business. The dairy and food sector is another area that has seen remarkable success. While they may not go public with an IPO, they are likely to remain profitable for a much longer duration. In these cases, business responsibilities for every child start with extensive apprenticeships throughout their teens.

Education is quintessential. Organized learning combined with experience shapes a CEO. This can happen in an academic environment as well as in a natural setting if properly groomed for the purpose.

Regards,
Cite Contribution

The only thing lacking is the right education. Once our Sethijis have that, like the Tatas and Ambanis, there is no stopping them. The Tatas, Birlas, and Ambanis have already shown the world that education combined with family business can take the business to a completely different level.

Regards,
Archna