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Goras and Desis: Managing Agencies and the Making of Corporate India
‘An insightful view on the origin and evolution of Indian corporates’ – N.R. Narayana Murthy
The story of corporate India is linked to managing agencies, an organizational form dominant in the subcontinent from 1875 until its abolition in 1970 that allowed entrepreneurs to promote diverse companies while exercising disproportionate control over cash flows. This is the definitive economic history of Indian companies through the lens of managing agencies, whether controlled by goras or desis.
‘An informed analysis of the ways of Indian business’ – Sanjaya Baru
‘A fascinating history of the precursors of corporate India’ – K.V. Kamath
‘A very timely perspective and a delightful read’ – Ashok S. Ganguly
The story of corporate India is linked to managing agencies, an organizational form dominant in the subcontinent from 1875 until its abolition in 1970 that allowed entrepreneurs to promote diverse companies while exercising disproportionate control over cash flows. This is the definitive economic history of Indian companies through the lens of managing agencies, whether controlled by goras or desis.
‘An informed analysis of the ways of Indian business’ – Sanjaya Baru
‘A fascinating history of the precursors of corporate India’ – K.V. Kamath
‘A very timely perspective and a delightful read’ – Ashok S. Ganguly
192 pages, Kindle Edition
Published November 15, 2016
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Displaying 1 - 6 of 6 reviews
November 5, 2020
A brilliant work of scholarship on the rise of business and entrepreneurship in India, this book charts the journey of the Indian corporate sector from the colonial times to the present day.
The book examines the Managing Agency system, the earlier mode of corporate ownership of enterprises, how it started with Dwarkanath Tagore and British Managing Agencies in the business city of Kolkata with jute and cotton mills and spread to other cities and other areas like sugar, coal, transport works etc.
The book also examines how Nehruvian Socialism stifled the entrepreneur spirit in a country that was best suited for rapid enterprise growth at the time of independence. How the licence permit Raj led to scams and India lagged behind other east Asian countries where enterprise had the support of the Government. The book also examines corporate structure in other countries like Japan, Korea, Hong Kong and charts India's corporate history in a beautiful manner.
There are several areas like the tea trade and tea gardens, rise of the Marwaris, JRD Tata's aviation foray, Indira Gandhi's nationalisation of banks, complex management and board structure of companies, early Indian MNCs, famous scamsters like Mundhra, loopholes in Companies Act, etc where the brilliant capture and treatment makes the book a highlight standout.
The book examines the Managing Agency system, the earlier mode of corporate ownership of enterprises, how it started with Dwarkanath Tagore and British Managing Agencies in the business city of Kolkata with jute and cotton mills and spread to other cities and other areas like sugar, coal, transport works etc.
The book also examines how Nehruvian Socialism stifled the entrepreneur spirit in a country that was best suited for rapid enterprise growth at the time of independence. How the licence permit Raj led to scams and India lagged behind other east Asian countries where enterprise had the support of the Government. The book also examines corporate structure in other countries like Japan, Korea, Hong Kong and charts India's corporate history in a beautiful manner.
There are several areas like the tea trade and tea gardens, rise of the Marwaris, JRD Tata's aviation foray, Indira Gandhi's nationalisation of banks, complex management and board structure of companies, early Indian MNCs, famous scamsters like Mundhra, loopholes in Companies Act, etc where the brilliant capture and treatment makes the book a highlight standout.
November 23, 2018
The book explains the managing agency (akin to a holding company) structure followed by the pre independence business houses. The objective was to have disproportionate cash flow interest as compared to economic interest. Key points to note
1. Most of the well known business houses such as Tata Birla etc. started with Textiles or Jute and then moved on to other things such as Minerals, Aviation etc.
2. A lot of the Baniyas of Kolkata started out as traders for British managing agencies and eventually controlled those companies
3. Bombay and Ahmedabad was known for cotton textiles whereas Calcutta for Tea Coal Jute etc. Textiles was the biggest industry.
4. One of the reasons for a a few business houses controlling a wide variety of businesses is scarce entrepreneurial talent and lack of funding. Similar structures have been observed in other countries Such as Japan Korea etc.
The book needs better editing. There were a few typos and grammatical errors.
1. Most of the well known business houses such as Tata Birla etc. started with Textiles or Jute and then moved on to other things such as Minerals, Aviation etc.
2. A lot of the Baniyas of Kolkata started out as traders for British managing agencies and eventually controlled those companies
3. Bombay and Ahmedabad was known for cotton textiles whereas Calcutta for Tea Coal Jute etc. Textiles was the biggest industry.
4. One of the reasons for a a few business houses controlling a wide variety of businesses is scarce entrepreneurial talent and lack of funding. Similar structures have been observed in other countries Such as Japan Korea etc.
The book needs better editing. There were a few typos and grammatical errors.
June 2, 2024
Felt like I was back in a Business & Government lecture from Term 6 (which is about right since this was a recommendation from the course)
Was quite a breeze to read, and learnt stuff, the one thing that put me off was all the references to Wiki articles on the footnotes.
Was quite a breeze to read, and learnt stuff, the one thing that put me off was all the references to Wiki articles on the footnotes.
December 20, 2016
BRILLIANT
Just one word to describe the book
Just one word to describe the book
July 2, 2017
This book is a part of the Penguin commissioned series of books on the history of Indian business. Written by Omkar Goswami, whom I remember as a columnist from the days when I used to read the Business World magazine regularly, it was a truly illuminating book for me. The theme of the book is the now banned form of corporate organization in India of a "managing agency". It is basically a way of structuring a business where with minimal equity ownership in each business, an entity can exercise complete effective control of a vast number of businesses and lay claim to an outsized share of cash flows through long term agreements granting the promoters of agencies commissions on sales and profits, excessive broking and insurance charges and their share of dividends. The Tatas, Birlas, Wadias, DCM and a number of other prominent corporate groups of today started and ran their business for decades under this structure for it was the de facto practice of the times. Tata Sons, the holding company of the house of Tatas, was a managing agency earlier. While outlawed in 1970 once it outlived its utility due to structural changes in corporate financing in India and caused major corporate scandals, the managing agency survives in India in spirit under many different forms and names. The book also draws parallels with similar structures in other countries like Japan, Korea, Indonesia and Hong Kong which exist to this day.
It was first conceived in form and structure by Dwarka Nath Tagore, Rabindra Nath Tagore's grandfather, who was one of the richest Indians in colonial times. It was a product of the times when capital was scarce to come by and entrepreneurial risk taking not so widespread. The basic justification that owner-operators of businesses who understand the intricacies of the business deserve more than their pro-rata share of dividends that even passive shareholders are entitled to (salaries for services paid to them by company being deemed insufficient compensation) persists to this day. This causes promoters to take out money from the company under various pretexts by say, erecting private companies that "provide" services to the main company and are paid for it. Many of the devious and fraudulent means and ways to steal money from companies that are in vogue today trace their antecedants to the managing agency structure.
It was first conceived in form and structure by Dwarka Nath Tagore, Rabindra Nath Tagore's grandfather, who was one of the richest Indians in colonial times. It was a product of the times when capital was scarce to come by and entrepreneurial risk taking not so widespread. The basic justification that owner-operators of businesses who understand the intricacies of the business deserve more than their pro-rata share of dividends that even passive shareholders are entitled to (salaries for services paid to them by company being deemed insufficient compensation) persists to this day. This causes promoters to take out money from the company under various pretexts by say, erecting private companies that "provide" services to the main company and are paid for it. Many of the devious and fraudulent means and ways to steal money from companies that are in vogue today trace their antecedants to the managing agency structure.
June 15, 2020
The story of corporate India is linked to managing agencies, an organizational form dominant in the sub-continent from 1875 until its abolition in 1970, which allowed entrepreneurs to promote diverse companies while exercising disproportionate over cash flows. This is the definitive economic
History of Indian companies through the lens of managing agencies, whether controlled by goras and desis.
History of Indian companies through the lens of managing agencies, whether controlled by goras and desis.
Displaying 1 - 6 of 6 reviews