You cannot find an Indian business family that is more bound by tradition than the Birlas. Younger Birlas, no matter which branch of the family they represent, always defer to the views of the senior members of the family. And, although the group's businesses were amicably divided in the mid-1980s and the different branches are settled across three cities, Kolkata, Mumbai and Delhi, even today if a Birla scion visits another city on work he is expected to call on the elders residing there. That's probably all there is to the unity of the Birla group. Each of the branches, whether it is the biggest and the most successful A.V. Birla group, now steered by the young Kumar Mangalam, or the small and ailing S.K. Birla group, run by S.K. and his son Siddharth, does its own thing and neither interferes nor collaborates with the others. Family get-togethers are restricted to events such as weddings and funerals. But a will and a man named Lodha seem to have changed all that. Small, medium and large, Birlas with business empires of all sizes have rallied together to challenge what they think is an attempt by an outsider to usurp some of the family's assets. The battle, now in the courts as well as out in the open, will take its course. Given that such things can take time, the Birlas and Lodha may even decide to opt for a negotiated settlement. Or be prepared to wait out a messy and long-drawn legal tussle.

But the real issue thrown up by the battle for M.P. Birla's legacy is more fundamental. As long as Indian business families do not successfully separate ownership from management of their companies and businesses, they will frequently face problems such as the one the Birlas are embroiled in today. None of the representatives of the Birla family has made the shift from 'owner-cum-manager' to 'owner plus professional manager'. Whether it is the octogenarian B.K. Birla or the thirty-something Kumar Mangalam, Birlas are always the real babus of their businesses, the executive head and owner combined. There's nothing wrong with that as long as it works. And whether it works depends on the Birla you have in charge. If the Rs 27,000-crore A.V. Birla group has thrived, it is because both the late Aditya Vikram and his son Kumar Mangalam proved to be successful owner-managers. But cast an eye on the other branches-the GP-CK or SK or even KK Birla groups. Many of their group companies are deeply in the red and, over the years, persistent lack of vision and missed opportunities have inhibited growth. Would it have been the same if the owners had inducted professional managers to run their businesses?

The Birlas are so steeped in tradition that some of their practices can seem hidebound. Businesses are run on near-feudal lines with managers judged more on loyalty to the babu rather than performance. Few managers are empowered to take independent decisions and old retainers (Lodha is one) are beneficiaries of the owner's munificence. True, some of the younger Birlas-Kumar Mangalam is an outstanding example-have attempted to professionalise the way their companies are run but, in general, it is the tired magic of the surname that the family relies on to run its businesses.

The inheritance controversy at the MP Birla group should serve as a lesson for other Indian business families, which are long used to naturally pass on control, ownership and management to each successive generation of the same family. What if the next generation doesn't produce good enough managers? Or worse, as in the M.P. Birla group, there is no next generation?