The latest to join the bandwagon is the Chennai-based Murugappa group whichhas decided to hand over the day-to-day running of companies under itsumbrella to professional chief executive officers even as family seniorsconfine themselves to laying down strategies for future growth. The decisionof the south-based group is significant for more than one reason. Primarily,and most importantly, it marks the entry of a traditional and conservativefamily into a management-realm so far associated with new generationfamilies. Hitherto, professionals have been given control mostly incompanies that are of post-independence vintage with the traditional ones -the Birlas, the Modis, the Goenkas, the Singhanias, and the Mafatlals, tomention the more important ones - being evidently satisfied with onlycosmetic changes in managerial patterns and operational set-ups.

No less significantly, the changeover sought to be effected in the Murugappagroup is wholesale, quite unlike those initiated by the few north-basedcompanies, with the exception of Eicher group. From what has been madepublic, the Murugappa model refreshingly keeps clear of this. This, to besure, is what makes the experiment worth watching. That Indian corporateworld has to necessarily go in for professionalism is easily conceded inview of the emerging global competition and the consequent changes inbusiness opportunities and the kind of responses required to make use ofthem. In a broader sense it also calls for the induction of what themanagement gurus call `managerial capitalists' in the place of `financialcapitalists.' The former, unlike the latter, are neither the foundingfathers of the enterprises they head nor do they own them. Their involvementis limited to the demands made on their expertise. Since they have no vestedinterests, the well-being of the shareholders is much safer in theirhands.

Arguably, family control is not an unmitigated bane in all cases. Nor,conversely, is professionalism an end in itself. The remarkable turnaroundof EID Parry is a typical case in point. It was virtually brought back fromthe brink by the sheer tenacity and determination of one man - MV Subbiah.

He took over the reins of the company at a time when everything looked sohopelessly beyond recovery. And although a recovery and rescue plan had beenreportedly readied by the earlier professional managers, its implementationseemed to have suffered for want of managerial leadership capable of takingnot merely unpleasant decisions but bold measures. In fact, the turnaroundof EID Parry behoves us to be cautious about our notions on familymanagement and its true worth. Relevantly, there have been innumerableinstances as well of many a bluechip company, wholly controlled and managedby the best of professional managers, having collapsed on account of poormanagerial responses to market challenges. There are indeed success storiesin which sheer professionalism has helped the companies turn outextraordinary performance. Two examples that readily come to one's mind areHindustan Lever Ltd, and ITC. But, then, even in these cases everything hasnot been hunky-dory with succession management often throwing up hiccups ofsome consequence.

Nonetheless, there are grey areas to be watched. One such is the kind ofrelationship that ought to be settled between controlling families andprofessional managers. The model initiated by the Murugappa group,presumably patterned after the German corporate structure, seeks to tacklethis problem. Under the proposed dispensation, there will be a supervisoryboard - the corporate board - comprising the four senior family members andthree external non-executive directors which will strategise the future ofthe entire group. Additionally, each family member will play the role of amentor for the designated arm. On the face of it, the arrangement shouldensure operational freedom to managers in day-to-day working even as theoverall strategic control rests with the family. Given the historical growthof corporates in our country, this seems an ideal arrangement worthexperimenting.

Hopefully, it should get strengthened as more members of controllingfamilies get exposed to the intricacies of modern management. The scenariowill then be not one of confrontation between the two interests - ownershipand management - but of cooperation brought about as much by necessity as byunderstanding.