Puppets on a string

Puppets on a string

Faced with even the slightest of pressures from their political masters or their underlings (in this case, according to reports, the daughter of the civil aviation minister), the top managers lose no time in bending to accommodate the unethical and often illegal demands. And if, as in the present instance, the misdeed becomes public, they go into all sorts of figurative contortions to justify the action and shield the political whip-holders.
If Air India’s CMD had even the slightest gumption, he would have resisted the pressure to overthrow norms. Nine times out of 10, the politician is lothe to deliver an ultimatum to the top management in these matters and prefers to make a tactical retreat. Of course, he may make things rough for the concerned manager in the future, but that is a risk which any self-respecting manager should be willing to take.

‘Yes boss’
This kowtowing afflicts all areas of management decisions, whether it be hiring, outsourcing, purchase, asset sale, plant location, union recognition or foreign collaborator selection, etc. Rarely do the considerations that influence the political master jell with what is best for the company. The history of the public sector in India is littered with stories of dismal failures brought about by the inappropriate decisions of top managers who did not have the guts to say ‘no’ to their ministers.
Why do public sector top shots behave in such a pusillanimous manner? Are they so afraid of getting the sack if they stick to their guns? Are they apprehensive of not getting such cushy jobs in the private sector  if they have to put in their papers in case they cannot accommodate political pressures?

It is nobody’s case that the top managers in private enterprises, particularly the closely held ones, can thumb their noses at the owner-bosses or the ‘babus’ as they are called. The difference is that the babu will think a hundred times before he prevails on a manager to take an action that could harm the fortunes of his company. That is because a loss to his company is a loss to him.

This is not the case with the public sector. The minister in charge does not suffer personally if a company in his portfolio goes under. So, he has no qualms about misusing his position to get his way. For him, the PSUs under his ministry are his personal fiefdom, to be exploited as per his will. Little wonder politicos of all hues are full-throated in their opposition to privatising the public sector. On the face of it, their opposition is ideological but, in truth  the motivation is the fear of losing control over the PSUs.

Permit raj
In the days of permits and controls, when competition was a bad word and the public sector occupied the so-called commanding heights of a highly insular economy, the damage from politically pressurised wrong decisions could, perhaps be accommodated. Certainly, with just a single, state-owned TV channel and a rather conservative press in those days, the politician initiated infractions never saw the light of the day.

But things are very different today. Restrictions have been removed, competition is fierce, the economy has been globalised to a large extent and the market is very cruel to any slip-ups. On top of that, there is a fiercely competitive press which is hungry to pounce on any official misdemeanour. In such an environment, what Air India did was suicidal. Since it is already a terminal case, perhaps this imprudent act may not make things worse for the airline. But, for other public enterprises who are giving a good fight to the private sector, this episode should be an abject lesson to the top managers not acquiesce in the dubious demands of their ministers or their henchmen.