A comparative study of general management functions in private sector, public sector and multinational subsidiary companies in India

Abstract

Discussion on public sector vs. private sector has been quite common and frequent, ever since the emphasis on public sector increased in the industrial activity of the country. However, very little management literature exists that highlights the implication of differences in type of ownership on the management of the organization in companies pertaining to two types of ownership. More specifically it is difficult to say, how much and in which specific areas of management the differences arise because of difference in type of ownership. It is also difficult to say what are the reasons underlying the differences.

This comparative study, therefore, is an attempt to find answers to such questions. A sample of 25 large size public limited companies in three types of ownerships - private sector, public sector and multinational subsidiaries in India were analysed. The specific questions taken for analysis were: a) Whether differences exist in organizational variables pertaining to general management function in companies pertaining to these three sectors. b) If so, in which specific variables pertaining to the general management function, do the differences exist. c) If so, what are the factors of ownership which are responsible for these differences. The sample of 23 companies consisted of seven multinational subsidiaries, seven public sector companies, and nine other private sector companies, with sales ranging from Rs.10 crores to Rs. 100 crores in three sophisticated technology industries.The data base consisted of responses received through questionnaires, administered to over 250 executives, and interviews of over 100 top management executives of various companies, and officials of Bureau of Public Enterprises and concerned ministries. The data analysis consisted of comparing the companies pertaining to the three types of ownership on each variable (using frequency distribution tables drawn from trichotomised data), and identifying the pattern of sectoral differences, followed by non-parametric tests to ascertain on which variables the sectoral differences were statistically significant. These findings were then supplemented by findings of interviews with oanpany executives to identify factors responsible for sectoral differences. The study found that sectoral differences existed in many of the variables. Particularly, statistically significant sectoral differences were noticed in respect of organizational objectives, business strategy, top management styles, planning, coordinating and control system, degree of need satisfaction, instrumentality of efforts to rewards and organisational motivational climate. The study also identified several factors related to ownership that were possibly responsible for the differences in variables pertaining to general management function observed in the analysis. Those seem to originate from two sources, i.e., relationship of an organization with its super system and owner management distances. Thirteen hypotheses have been developed to explain as to why and how organizations differ on the ownership related factor and how these differences influence the variables pertaining to general management function. This is an exploratory study, and findings are tentative, that need further confirmation on larger sample. However, the implication of the same seems to be substantial. At the end of the thesis major implications for organizational analysis, future research, and for practising managers have been indicated.