CASE STUDY ON INDER CHAND

DUGAR BIKANER
(CASE STUDY ON FAMILY BUSINESS MANAGEMENT)

by :
DR. T.K. JAIN
AFTERSCHO☺OL
centre for social entrepreneurship
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bikaner 334001 rajasthan, india
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Managing joint family is always tricky task. For many people, the family business of Mr.
Dugar is an inspirational business. When he had joined his parental business leaving his
law practice, he had some dreams of building a joint family business. He had an option to
go abroad, but he remembered the values of his parents who emphasised on join family.
His dreams came from his parents and grand mother, who had always emphasized for
joint family values.

For the last four decades, Mr. Dugar has been busy in diversifying and relocating his
business. Traditionally they had their business in Assam, where they had over 5000
regular clients (agricultural farmers) spread out in over 50 villages. Mr. Dugar had a
foresight that it would be difficult for them to survive and grow in Assam considering the
changing situation. He soon initiated and started business diversification process. The
family soon started relocating themselves and they found their ancestral place Bikaner the
right location for them.

It was a tough time and tough decisions had to be taken. Closing down an established
business is always a tough decision. But today that decision has enabled Mr. Dugar to be
able to develop the business empire. While other marwari firms continued to operate in
Assam, Mr. Dugar was the first person at that time to take a decision to quit Assam
before it is too late.

Entry into the business of Bikaner grain market (trading had always be a forte of Marwari
families) was not easy. Mr. Dugar decided to set up partnership with a small local firm
(with high reputation for commitment). The business continued without any profit and
the partnership soon ended. The partner wanted to close down the business due to low
margins, but Dugar insisted on continuing the business (as he had already prepared
himself for long term struggle). He requested his partner to allow him to use the name of
partner in the business.

Mr. Dugar always based his business on the ideals and values of fair practices. He soon
established his identity in Bikaner market also for his values and adherence to honesty
and integrity in business deals. The punchline of his business has always been (for over
80 years) Niyat Gel Barkat Hai (a marwari proverb, which means fair intentions and
honesty always give you reward). Even today this punchline is boldly written in all
prominent places in his office and on all documents as well.

Mr. Dugar’s mother had died early and his father married again at later age. Mr. Dugar
had step brothers who were almost 20 years younger to him. Mr. Dugar always
considered joint family business as his biggest treasure and always nourished the seeds of
a strong family managed business.

As his step brothers grew, Mr. Dugar planned out new business ventures for each of the
brother. While marwari business family are generally centralized, Mr. Dugar adopted a
different style of business here. He insisted that if a family member is forced to work
only in the existing business, it would not give him enough chance for creativity and
growth. Typically each family member would be groomed for 3-4 years in some existing
business and later he would be given an independent business to manage.
Family values emphasise joint ownership from childhoon onwards in Dugar’s family.
Each member has access to all the resources of the family, at the same time he has no
personal property. No person can claim even a room to be his personal property. Each
person had full powers and authority to buy / sell property for family and to take any
decision. Mr. Dugar reviews all the decisions with his younger brother Mr. Jatan Dugar
and formulates broad policy guidelines and guide the family members so that they can
take decisions.

Entry in Bikaner market was difficult, but later it proved to be a boon. Mr. Dugar soon
got reputation for values of honesty and fair dealings in Business. Their firm was
working as commission agent. Initially they started with multi-commidities, but soon
realized that it was not a very profitable venture. They soon changed their business and
became commission agent of sugar. As they understood the market of Bikaner, they
further changed their business and started dealing in Guar. They always charged higher
incomparision to competitors, but their claim to honesty and integrity enabled them to
continue to have good market share.

Soon Mr. Dugar entered into manufacturing by purchasing a sich unit of Guar Gum
manufacturing. Mr. Dugar realized that most business persons failed in this business due
to involvement in speculation. He had formulated guidelines for his team, which include
strong wordings against speculation. Many persons were surprised when Mr. Dugar
stopped productions in his factory, whenever the market became speculative. While
others thought of taking advantage out of this, Mr. Dugar was predicting a collapse of
market due to speculative activities. He would then ask his younger brothers (who were
managing the factory) to diversity to other family businesses.

Soon Mr. Dugar was able to open branches of his business in nearby cities including
Jodhpur, Chhattargarh, Nokha etc. As the next generation emerged, Mr. Dugar was busy
in planning for their business. Mr. Dugar always planned for 20 years ahead. It looks
surprising, but Mr.Dugar prepare minute plans of marriage of family members also for
next 10-15 years with estimates of all expenses. The marriage expenditures are also
standardized so that it is withing a given budget. All family expenses are well planned
and business planning is synchronized with projected family expenses.

Mr. Dugar continues to offer new business units to each of new member in the family.
Soon the business diversified into share trading, commodity trading, textiles and other
business, with one or two family members independently handling the business unit (with
broad policy guidelines of Mr. Dugar).

The entire family eats together in one plate (they have a big plate, called thali for that).
All the members share their business experiences in the night and Mr. Dugar sits with
them and undertakes further planning. Today a few members stay out of Bikaner – some
at Jodhpur and some at Surat and some at Nokha. These members periodically visit
Bikaner and when they return to home, some other member of family goes their as
replacement. Each member can spend unlimited amount out of revenues earned by him in
an accounting year, but once the accounting year ends, all money is transferred to the
reserve, which is used in building up fixed assets for the family business.

There are a few employees in the entire business organizations, even those work are more
like family members. Employees are very carefully selected. Preference is given to
someone connected in some relation. Only those persons are appointed as employees,
who have proved background of integrity, sincerity and fair intentions. Such employees
are then converted as almost partners in the business.

It is a matter of pride for Mr. Dugar that while other Marwari business families had great
difficulties in doing their business in Assam, he was able to diversify the business and
enable it to flourish. In spite of old age, Mr. Dugar still spends a great deal of time in
business planning and information sharing with his brothers and in value building in the
young generation.

Mr. Dugar also spares substantial time for social activities. He is an active member on the
boards of over a dozen social organization including the biggest private sector school in
Bikaner. He is also founder chairman of many of these social institutions. His
philanthropic pursuits force him and his younger brother Mr. Jatan to spends a great deal
of time to social activities, but these have further contributed to the image of their
business. They still lead a simple life with emphasis on religious and spiritual values.
However, the decentralized business structure created by them helps them a great deal as
they have to intervene only in critical activities and concentrate on policy aspects only.

Mr. I.C. Dugar and Mr. Jatan Dugar have revitalised Seth Tolaram Bafna Academy (from
a very poor position to a very strong position), they have also revitalised Gangashahr
Nagarik Manch, and have set up Karuna International Bikaner – with Karuna Clubs in
over 200 schools in Bikaner. They have also made significant contribution to protect
Gochar Land of Gangashahr. They have also tried to revitalise many social instituitons of
Gangashahr and Bikaner.