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<i><div class="itg-mosimage"><div class="itgimage"><amp-img  src="https://akm-img-a-in.tosshub.com/sites/media2/indiatoday/images/stories/1981July/bureaucracies-1_111913083633.jpg" alt = "" height="425" width="650" class="" layout="responsive"></amp-img></div>Parkinson: arguing the cause of free enterprise</div>When C. Northcote Parkinson, 71, first conceived his famous Parkinson's law in the early '50s, the style of management he was denigrating was not dissimilar to governmental administration in India today. Vehemently opposed to bureaucracies and red-tapism, Parkinson has always-insisted that governments should he cut down in size, should concentrate their energies on governance, and should leave the business of industry to private enterprise. In obvious opposition to the line followed by Indian planners since Independence, he feels that the only way a government can generate employment is by creating the right conditions for private enterprise to flourish.<br><br>An academician with a very broad-based training, Dr Parkinson has taught subjects ranging from history to management at universities around the world. Thirty years ago he developed the theory that if more men than necessary are put on a particular job they will create more work to justify their employment. Conversely, said his bestselling book Parkinson's Law, there is no direct relationship between the number of people one employs and the work that gets done. Developing his man-management ideas to a fine art, he suggested that all large organisations, whether state-owned or private, should be reduced in size and shorn of wasteful hierarchies. Explaining his ideas for revitalising administrations, he said: "An efficient organisation should have as few rungs to the top as possible, with much greater decision making power at each rung. When you have more layers of authority you have that many-more people to pass the buck to."<br><br>Travelling from Australia to Guernsey in the Channel Islands last fortnight, Parkinson and his wife made brief stopovers at Bombay and Calcutta. His five-day visit consisted of a string of lectures to packed audiences in both metropolises, press conferences, and meetings with executives and trade associations. Combining his lecture tour with a promotional campaign for the books he co-authors with Bombay's M.K. Rustomji, the ageing "whiz kid' went through the hectic schedules with an energy that would be admirable in one half his age.<br><br>Alighting at Bombay's Santa Cruz Airport after a harrowing day in Calcutta, his off-the-peg synthetic suit crumpled and ill-fitting, he nevertheless readily agreed to talk to </i>India Today's Chander Uday Singh<i>. Cramped into an air-conditioned Fiat en route to the Taj Mahal Hotel he discussed business management. Third World development and his pet subject, free enterprise, with an enthusiasm that belied his fatigue. Excerpts:</i><br><br><b>Q. What form of management, in your opinion, would be most relevant to India's developmental drive ?<br>A.</b>Someone asked me yesterday whether India should follow a system of management derived from America or one derived from Japan. I replied that I should like to see a system appear that is derived from India. I think we should start working on this, go back to the sources of Indian thought and idealism, bring it to the present day, learn what we can from the West and certainly from Japan, but finally we must produce an answer that is essentially Indian.<br><br><b>Q. What system do you think is most applicable, public or private ownership? Also should it be large-scale industrialisation or small-scale ?<br>A.</b>It has to be based on capitalism if it's going to succeed. The large-scale and small-scale is apt to settle itself. I don't want to go into theory but for some particular problems the large-scale organisation is necessary, but when that happens the small-scale firms cluster around the big ones as satellites, often in very considerable numbers. There are other problems where the small-scale organisation does better, but I think this has got to be a mixture, and it settles itself according to the nature of business which is taken up.<br><br><b>Q. The Third World has largely gone in for the percolation theory of development on the assumption that if you develop the heavy industry the smaller ones and agriculture would follow. But today western economists accept that this has not worked. What is your opinion ?<br>A. </b>Well, I think development should come from the bottom, though it seems to me that a lot of help would have to be given to make it work from the bottom. Obviously, agriculture is all-important in a country like India which is largely agricultural. I am no expert in the field but I would imagine that much remains to be done in modernizing agriculture itself. My suspicion is that Indian agriculture is backward in many ways, and this is an area where people need a great deal of advice and know-how.<br><br><b>Q. You said in a speech at the Indian Merchants' Chamber that government intervention in industry causes unemployment rather than employment. Could you explain that?<br>A. </b>It can easily do so. You see one thing a government tends to do is to plunge into some industrial venture in the hope of providing employment. In practice, while offering a little employment in one area, these government plants cause unemployment in others. For example, a government sets up a factory which will normally be in competition with other existing factories. Therefore the gain of employment in one area is balanced by a loss in the other, perhaps at the other end of the country.<br><br><b>Q. But surely you consider competition healthy ?<br>A. </b>Yes, but in this case the Government is competing unfairly because it's doing it with the taxpayers' money. So the taxpayers are paying through their taxes for a government competition in industry which is tending to their disadvantage.<br><br><b>Q. But do you think the free enterprise system is applicable to the Third World with its need for planned development ?<br>A. </b>Oh yes. It has certainly been proved that development can take place in a free enterprise situation. Most industrial countries have developed on the lines of free enterprise. Take Japan for example. Industrialisation in Japan started in 1867, and while the Japanese Government admittedly encouraged and helped industry, it never tried to replace the private firms with its own enterprise. The economic progress which has made Japan so important an industrial power of modern times is essentially the work of free enterprise.<br><br>In the modern world, with all the complexities of international affairs, currencies and balance of trade problems, it can never be a totally free system, but I would ask and hope for the maximum freedom possible.<br><br><b>Q. The basis of free enterprise is free competition, but in the West big businesses like the oil industry, the air transport industry and others have set up price-fixing cartels and oligopolies. How does the consumer benefit from this <br>A.</b>Well, as I said, nowhere is industry totally free, some industries are certainly more free than others. You're naming industries in internationally complicated fields like oil and air transport. But I am for free enterprise in these too. In Britain Freddie Laker has set up an essentially free enterprise company and it's frightening the life out of the established people who, as you say, have been fixing fares and fixing everything else too. But to be fair to the system, air transport is the one area where prices have gone down due to the action of free enterprise.<br><br><b>Q. But airfares only went down because Carter deregulated air transport in the United States. . . <br>A.</b>That's right, but also because of the enterprise of Laker and some others of his kind.<br><b><br></b><table><tbody><tr><td><b>I should like to see a system appear that is derived from India. I think we should start working on this, go back to the sources of Indian thought and idealism, bring it to the present day.</b><br></td></tr></tbody></table><b>Q. In India we are faced with a situation where industrialists ask for decontrol and deregularisation of industry and yet clamour for more subsidies, incentives and government help. How would you reconcile the two ?<br>A.</b>That's very difficult to do. You see the trouble is that many people in the world are conservative. While one imagines that conservatives are people who are against socialism, if there were a socialist government for very long, the conservatives would in fact begin to fight to maintain socialism. Similarly, a system of tight controls becomes very profitable for the man who's learned to get around the controls. The checks and controls handicap his rivals, while he's found a way around them, so often you find your enterprising free trade man would want the controls rather than otherwise. As for subsidies, people have developed to a fine art the technique of collecting them from governments.<br><br><b>Q. Does that mean incentives and subsidies do not serve any purpose in the long run?<br>A.</b>I think they're nearly always mischievous, nearly always damaging. All the time you're offering these subsidies you are distorting the natural process of trade with all sorts of unexpected results. For example, there was a system in Britain for encouraging people to bring hard currency into the country. Cash subsidies were given for all hard currency brought into Britain. Some people promptly set up a wonderful business which consisted of shipping the currency out of Britain and bringing it back again to claim the subsidy on it. Another time there were cash incentives on exports, so people would export goods to France, claim the incentive and reimport them at an under-invoiced value. These are distortions in trade and they always result in mischief.<br><br><b>Q. Do you think industry should have any other objectives besides the profit motive ?<br>A.</b>Well, we always hear of the manager who says he has social objectives, that he is serving the community, that he is public spirited and so on. But this kind of tendency frightens me. If a person is playing around with his own money in a family firm, right, go ahead. But if he's playing around with other people's money the moral case becomes much weaker. He was appointed a director with the definite task of promoting the business that he's engaged in, to make the maximum profit, to develop the business. He wasn't appointed to save mankind, that's not his job.<br><br><b>Q. What about managers who sell harmful baby food to the Third World, or disregard workers' safety on the grounds that they're showing the shareholders a profit ?<br>A.</b>I think that would be a very shortsighted policy, and not in the shareholders' interests in the long run. That is the sort of thing that recoils, in other words the bad reputation of today's dealings could destroy the company in the end. I don't think it's good business to ignore workers' safety either, because the company will sooner or later find itself confronted with law suits or criminal proceedings which will not do it any good at all.<br><br><b>Q. What is your opinion of the style of management in Indian industry ?<br>A. </b>I don't really know enough about Indian management, but my suspicion is that while the higher level managers in Indian industry are, in general, sophisticated, this does not go very far down the ladder. My feeling is that the under level, the supervisors, are not very well versed in management techniques or ideas. I have been producing books along with my friend M.K. Rustomji to cater to precisely that level, since they have a long way to go. I think these books should have a great appeal in developing countries, nations where the supervisory staff are in need of training.<br><b><br>Q. As an expert on man-management, how do you think our bureaucracy could be made more efficient and progress-oriented within the constraints of the present system ?<br>A.</b>Well, I don't like bureaucracies, but some are certainly more efficient than others, which suggests that the less efficient ones could be made more efficient. In general my remedy is first of all to reduce their numbers drastically, in some cases to pay them more, and in general to aim for a different shaped administrative pyramid.<br><br>The more efficient organisation, as I see it, is a flatter pyramid rather than a steeper one, because that means there are fewer levels to go through from the bottom to the top. What I mean is that you have more officials who are ready to take a decision rather than a whole lot of people who keep pushing paper around. The flat pyramid gets a wider spread of people who are willing to make an intelligent decision.<br><div id="tab-link-wrapper-plugin"><div class="authors__container"><div class="authors__by"><div class="authlable">Published By: </div><div class="authdetaisl">AtMigration </div></div><div class="published__on"><div class="authlable">Published On: </div><div class="authdetaisl">Nov 19, 2013 08:06 IST</div></div></div><div class="sendros">--- ENDS ---</div></div>

economy

Economy

<i><div class="itg-mosimage"><div class="itgimage"><img  title=""  class="" alt="" src="https://akm-img-a-in.tosshub.com/sites/media2/indiatoday/images/stories/1981July/bureaucracies-1_111913083633.jpg" loading="lazy" /></div>Parkinson: arguing the cause of free enterprise</div>When C. Northcote Parkinson, 71, first conceived his famous Parkinson's law in the early '50s, the style of management he was denigrating was not dissimilar to governmental administration in India today. Vehemently opposed to bureaucracies and red-tapism, Parkinson has always-insisted that governments should he cut down in size, should concentrate their energies on governance, and should leave the business of industry to private enterprise. In obvious opposition to the line followed by Indian planners since Independence, he feels that the only way a government can generate employment is by creating the right conditions for private enterprise to flourish.<br><br>An academician with a very broad-based training, Dr Parkinson has taught subjects ranging from history to management at universities around the world. Thirty years ago he developed the theory that if more men than necessary are put on a particular job they will create more work to justify their employment. Conversely, said his bestselling book Parkinson's Law, there is no direct relationship between the number of people one employs and the work that gets done. Developing his man-management ideas to a fine art, he suggested that all large organisations, whether state-owned or private, should be reduced in size and shorn of wasteful hierarchies. Explaining his ideas for revitalising administrations, he said: "An efficient organisation should have as few rungs to the top as possible, with much greater decision making power at each rung. When you have more layers of authority you have that many-more people to pass the buck to."<br><br>Travelling from Australia to Guernsey in the Channel Islands last fortnight, Parkinson and his wife made brief stopovers at Bombay and Calcutta. His five-day visit consisted of a string of lectures to packed audiences in both metropolises, press conferences, and meetings with executives and trade associations. Combining his lecture tour with a promotional campaign for the books he co-authors with Bombay's M.K. Rustomji, the ageing "whiz kid' went through the hectic schedules with an energy that would be admirable in one half his age.<br><br>Alighting at Bombay's Santa Cruz Airport after a harrowing day in Calcutta, his off-the-peg synthetic suit crumpled and ill-fitting, he nevertheless readily agreed to talk to </i>India Today's Chander Uday Singh<i>. Cramped into an air-conditioned Fiat en route to the Taj Mahal Hotel he discussed business management. Third World development and his pet subject, free enterprise, with an enthusiasm that belied his fatigue. Excerpts:</i><br><br><b>Q. What form of management, in your opinion, would be most relevant to India's developmental drive ?<br>A.</b>Someone asked me yesterday whether India should follow a system of management derived from America or one derived from Japan. I replied that I should like to see a system appear that is derived from India. I think we should start working on this, go back to the sources of Indian thought and idealism, bring it to the present day, learn what we can from the West and certainly from Japan, but finally we must produce an answer that is essentially Indian.<br><br><b>Q. What system do you think is most applicable, public or private ownership? Also should it be large-scale industrialisation or small-scale ?<br>A.</b>It has to be based on capitalism if it's going to succeed. The large-scale and small-scale is apt to settle itself. I don't want to go into theory but for some particular problems the large-scale organisation is necessary, but when that happens the small-scale firms cluster around the big ones as satellites, often in very considerable numbers. There are other problems where the small-scale organisation does better, but I think this has got to be a mixture, and it settles itself according to the nature of business which is taken up.<br><br><b>Q. The Third World has largely gone in for the percolation theory of development on the assumption that if you develop the heavy industry the smaller ones and agriculture would follow. But today western economists accept that this has not worked. What is your opinion ?<br>A. </b>Well, I think development should come from the bottom, though it seems to me that a lot of help would have to be given to make it work from the bottom. Obviously, agriculture is all-important in a country like India which is largely agricultural. I am no expert in the field but I would imagine that much remains to be done in modernizing agriculture itself. My suspicion is that Indian agriculture is backward in many ways, and this is an area where people need a great deal of advice and know-how.<br><br><b>Q. You said in a speech at the Indian Merchants' Chamber that government intervention in industry causes unemployment rather than employment. Could you explain that?<br>A. </b>It can easily do so. You see one thing a government tends to do is to plunge into some industrial venture in the hope of providing employment. In practice, while offering a little employment in one area, these government plants cause unemployment in others. For example, a government sets up a factory which will normally be in competition with other existing factories. Therefore the gain of employment in one area is balanced by a loss in the other, perhaps at the other end of the country.<br><br><b>Q. But surely you consider competition healthy ?<br>A. </b>Yes, but in this case the Government is competing unfairly because it's doing it with the taxpayers' money. So the taxpayers are paying through their taxes for a government competition in industry which is tending to their disadvantage.<br><br><b>Q. But do you think the free enterprise system is applicable to the Third World with its need for planned development ?<br>A. </b>Oh yes. It has certainly been proved that development can take place in a free enterprise situation. Most industrial countries have developed on the lines of free enterprise. Take Japan for example. Industrialisation in Japan started in 1867, and while the Japanese Government admittedly encouraged and helped industry, it never tried to replace the private firms with its own enterprise. The economic progress which has made Japan so important an industrial power of modern times is essentially the work of free enterprise.<br><br>In the modern world, with all the complexities of international affairs, currencies and balance of trade problems, it can never be a totally free system, but I would ask and hope for the maximum freedom possible.<br><br><b>Q. The basis of free enterprise is free competition, but in the West big businesses like the oil industry, the air transport industry and others have set up price-fixing cartels and oligopolies. How does the consumer benefit from this <br>A.</b>Well, as I said, nowhere is industry totally free, some industries are certainly more free than others. You're naming industries in internationally complicated fields like oil and air transport. But I am for free enterprise in these too. In Britain Freddie Laker has set up an essentially free enterprise company and it's frightening the life out of the established people who, as you say, have been fixing fares and fixing everything else too. But to be fair to the system, air transport is the one area where prices have gone down due to the action of free enterprise.<br><br><b>Q. But airfares only went down because Carter deregulated air transport in the United States. . . <br>A.</b>That's right, but also because of the enterprise of Laker and some others of his kind.<br><b><br></b><table style="margin-left: 8px; background-color: rgb(229, 229, 229);" align="right" border="1" width="300" cellpadding="3" cellspacing="3"><tbody><tr><td><b>I should like to see a system appear that is derived from India. I think we should start working on this, go back to the sources of Indian thought and idealism, bring it to the present day.</b><br></td></tr></tbody></table><b>Q. In India we are faced with a situation where industrialists ask for decontrol and deregularisation of industry and yet clamour for more subsidies, incentives and government help. How would you reconcile the two ?<br>A.</b>That's very difficult to do. You see the trouble is that many people in the world are conservative. While one imagines that conservatives are people who are against socialism, if there were a socialist government for very long, the conservatives would in fact begin to fight to maintain socialism. Similarly, a system of tight controls becomes very profitable for the man who's learned to get around the controls. The checks and controls handicap his rivals, while he's found a way around them, so often you find your enterprising free trade man would want the controls rather than otherwise. As for subsidies, people have developed to a fine art the technique of collecting them from governments.<br><br><b>Q. Does that mean incentives and subsidies do not serve any purpose in the long run?<br>A.</b>I think they're nearly always mischievous, nearly always damaging. All the time you're offering these subsidies you are distorting the natural process of trade with all sorts of unexpected results. For example, there was a system in Britain for encouraging people to bring hard currency into the country. Cash subsidies were given for all hard currency brought into Britain. Some people promptly set up a wonderful business which consisted of shipping the currency out of Britain and bringing it back again to claim the subsidy on it. Another time there were cash incentives on exports, so people would export goods to France, claim the incentive and reimport them at an under-invoiced value. These are distortions in trade and they always result in mischief.<br><br><b>Q. Do you think industry should have any other objectives besides the profit motive ?<br>A.</b>Well, we always hear of the manager who says he has social objectives, that he is serving the community, that he is public spirited and so on. But this kind of tendency frightens me. If a person is playing around with his own money in a family firm, right, go ahead. But if he's playing around with other people's money the moral case becomes much weaker. He was appointed a director with the definite task of promoting the business that he's engaged in, to make the maximum profit, to develop the business. He wasn't appointed to save mankind, that's not his job.<br><br><b>Q. What about managers who sell harmful baby food to the Third World, or disregard workers' safety on the grounds that they're showing the shareholders a profit ?<br>A.</b>I think that would be a very shortsighted policy, and not in the shareholders' interests in the long run. That is the sort of thing that recoils, in other words the bad reputation of today's dealings could destroy the company in the end. I don't think it's good business to ignore workers' safety either, because the company will sooner or later find itself confronted with law suits or criminal proceedings which will not do it any good at all.<br><br><b>Q. What is your opinion of the style of management in Indian industry ?<br>A. </b>I don't really know enough about Indian management, but my suspicion is that while the higher level managers in Indian industry are, in general, sophisticated, this does not go very far down the ladder. My feeling is that the under level, the supervisors, are not very well versed in management techniques or ideas. I have been producing books along with my friend M.K. Rustomji to cater to precisely that level, since they have a long way to go. I think these books should have a great appeal in developing countries, nations where the supervisory staff are in need of training.<br><b><br>Q. As an expert on man-management, how do you think our bureaucracy could be made more efficient and progress-oriented within the constraints of the present system ?<br>A.</b>Well, I don't like bureaucracies, but some are certainly more efficient than others, which suggests that the less efficient ones could be made more efficient. In general my remedy is first of all to reduce their numbers drastically, in some cases to pay them more, and in general to aim for a different shaped administrative pyramid.<br><br>The more efficient organisation, as I see it, is a flatter pyramid rather than a steeper one, because that means there are fewer levels to go through from the bottom to the top. What I mean is that you have more officials who are ready to take a decision rather than a whole lot of people who keep pushing paper around. The flat pyramid gets a wider spread of people who are willing to make an intelligent decision.<br><div id="tab-link-wrapper-plugin"><div class="authors__container"><div class="authors__by"><div class="authlable">Published By: </div><div class="authdetaisl">AtMigration </div></div><div class="published__on"><div class="authlable">Published On: </div><div class="authdetaisl">Nov 19, 2013 08:06 IST</div></div></div><div class="sendros">--- ENDS ---</div></div>

An academician with a very broad-based training, Dr&nbsp;C. Northcote&nbsp;Parkinson has 
taught subjects ranging from history to management at universities 
around the world. Thirty years ago he developed the theory that if more 
men than necessary are put on a particular job they will create more 
work to justify their employment. Conversely, said his bestselling book 
Parkinson's Law, there is no direct relationship between the number of 
people one employs and the work that gets done.

India Today

An academician with a very broad-based training, Dr C. Northcote Parkinson has taught subjects ranging from history to management at universities around the world. Thirty years ago he developed the theory that if more men than necessary are put on a particular job they will create more work to justify their employment. Conversely, said his bestselling book Parkinson's Law, there is no direct relationship between the number of people one employs and the work that gets done.

I don't like bureaucracies: C. Northcote Parkinson - India Today

Indian agriculture is backward in many ways: C. Northcote Parkinson

I don't like bureaucracies: C. Northcote Parkinson

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The Bear sets Season 5 premiere date

The kitchen is closing: The Bear sets Season 5 premiere date for final service

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Indian agriculture is backward in many ways: C. Northcote Parkinson

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