But according to Rana Som, Chairman and Managing Director, National Mineral Development Corporation Ltd, the biggest problem before the managements of public sector companies today is that they do not have a team of dedicated businessmen or a team of entrepreneurs to run the enterprise.

“This is happening because in the public sector we have never been taught that we are businessmen or entrepreneurs and have never been taught what business is and how it has to be run,” he said while addressing a gathering of representatives of various public sector undertakings (PSUs) at a conference organised by the Institute of Public Enterprise in Hyderabad recently.

Som said that if one were to do a survey of PSUs across the country, they would find that most of the directors on the board operate as heads of department as they used to in the past. “The directors might be excellent in their respective fields, but then they are not business managers. For an engineer to become a board member who is a business manager requires a sort of qualitative and organic transformation. And this, many a time, we do not realise,” he said.

Som pointed out that in the public sector if one really wants to do something to take the enterprise forward it requires a person who, like a mason, will build the structure brick by brick. “This requires a lot of patience, involvement, dedication and cannot be done by a miracle,” he said. Why a business is run, how it is run and who drives the business are other important factors which are not talked about, he added.

Citing Karl Marx’s formula (M-C-M’) where (C= commodity; M= money), he explained that a capitalist comes to the market with money, buys commodities and raw material and converts it into a product and then sells it in the market in exchange for money. “The difference between M’ and M is the surplus value which is the driving force for a capitalist,” Som said. He added that a capitalist runs a business that moves ahead, takes risks and develops a forward looking plan only because there is the difference between M’ and M – otherwise he has no initiative to move.

“For managers of a PSU, the board members and chairman, there is no difference between the M and M’. M is his scale of pay and benefits that remain the same at the beginning and at the end. So what is his driving force? Why should he take risks, handle the environment, politicians, confront and fight with the Central Board of Excise and Customs (CBEC) and CBI? This has also been a matter of great concern not only in Indian PSUs, but also across the world,” he said.

Som said that a study done in 2005 showed that those PSUs that were driven by a super ordinate board were successful. “Defining the super ordinate board, the study said those who integrated all their activities with a purpose, which is not direct like the difference between M’ and M, but the board which felt that they are doing something for the nation, its people is the super ordinate board,” he said. This also means that a person has to rise from being a mere businessman to being a social activist whose work benefits society at large, he pointed out.

The primary task of the directors and chairman of PSUs is to inject life into the functioning of the organisation. “Life is a deep understanding of business practices, the environment, identifying the opportunities and separating the threats, to name a few. Directors are not there to manage certain areas, but to inject life into the organisation,” he said.

Finally, he said that business management is not only management of your own business, but also management of the environment. “Political interventions will be there, because we are working in a political system. Institutions like CBEC and CBI will be there as we are working in a democratic system. We have to know how to deal with them,” Som said.

In conclusion, he said that external pressure can help or can obstruct business, but as a business manager it depends on the individual’s calibre how a situation is handled.

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