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The Rediff Business Special/Rajesh Mehta

Reinventing Corporate India

"Management theory is bound up with three revolutions that directly or indirectly affect all of us: the reinvention of companies, reinvention of careers and reinvention of government."
John Mickethwait and Adrian Woodbridge in The Witch Doctors

Corporate India is witnessing a silent revolution that is changing the face of Indian business. Today, in India, as in the global economy, there has been reinvention of companies, reinvention of careers and reinvention of government.

This reengineering process has led to the separation of the roles of the owner and the manager on one hand and more focus on the customer and employees on the other hand.

The Indian companies have started looking out globally and strategically. They have started focusing on their core competence and are taking a long-term view of things. This shift in thinking marks the dawn of a new professional culture where the customer is king on one hand and the employee is the master on the other.

There has been a reinvention of the government. Today, it is accepted that the role of the government should be minimum in the economic sphere. The government should concentrate on areas like education, infrastructure and health and leave other sectors for the market.

The liberalisation of the Indian economy that began in 1992 marked the dawn of this new era. The economic reforms brought a dramatic shift in the thinking of Indian people. Socialism had become synonymous with red-tapism, poor quality of manufactured goods and services and inefficiency.

The process of change has been slow, but what is important is that the process has begun. The imminent opening up of the telecom and insurance sectors is an example of the change. There has also been a re-organisation of the public sector. MTNL is a recent example of it. With the private Internet Service Providers or ISPs coming in, MTNL itself has become more professional and is reaching out to the consumer.

Reinvention of the companies has also started. The roles of the manager and the owner have changed. Today, in the new environment, even the owners have to prove that they are worthy managers. Professionalism has started percolating even into the so-called family-owned or Lala companies. The latest shining example is Ranbaxy Labs, where the late Dr Parvinder Singh, father of two sons, anointed G S Brar as CEO weeks before he passed into ages.

Today, owners of companies like DCM, Tata and Escorts are sending their children to prestigious educational institutions like Harvard Business School and the Massachusetts Institute of Technology. This is an example that even at the top level, the need for change, for reinvention of business, new thinking, is being recognised.

Management guru Dr M B Atreya believes that "putting the promoter's family's interest last, after that of stockholders, customers, employees, partners, and the public is the businessmen's vysya shreshta dharma or righteous duty."

Indian companies have started thinking globally and acting locally. They have started having a long-term perspective. More than 50 per cent of Indian corporates have started having their own vision or mission statements. Today, companies like Infosys and Reliance have registered at leading stock exchanges in the US or are in the process of doing so.

This is a great victory for the ideals of corporate governance. Now these companies will become more transparent and will try to meet the strict accounting standards followed in the US.

Indian corporates have started focussing on their core competence. A company like Arvind Mills, which specialises in the manufacture of denim cloth, has been seeking global-scale presence in a select business, built around its core competence.

Today, industrial houses like the Tata group, which have highly diversified interests ranging from salt to automobiles, are exiting from certain segments and concentrating on key areas. An example: the Tatas sold Tata Oils Mills Company or Tomco to Hindustan Lever. Telco sold off its cement division to La Farge of France.

The new Takeover Code and the government's favorable attitude towards mergers and takeovers would increase the market-share of companies in their chosen field.

How time flies! There was a time when Swraj Paul, a global-scale businessman, could not take over inefficient companies like DCM and Escorts because of their strong nexus with the government. Today, he might just succeed what with talk of privatisation and disinvestment in the air.

Reinvention of Indian business has led to emphasis on customer intimacy. Today, the Indian consumer has infinite choice. He can buy the best products. For instance, till the '80s, the average prospective car-buyer had to settle for either the Ambassador or the Fiat. Today, he can choose from nearly 50 models. Likewise, people had to rest content with national broadcaster Doordarshan. Today, channels abound. The advent of the Internet has added a new twist to corporate India.

Similarly, there has been a reinvention of careers. In the olden days, people wanted to spend their whole life in one company. Today, individuals want to learn more. In the software industry, changing jobs is taken in a positive sense.

Sundaram Fasteners is considered one of the successful Indian enterprises for its effective implementation of globally famous management systems. Infosys Technologies and Wipro Corporation offer stock option schemes, health club, etc, to their employees, making the latter part and parcel of the organisation. Today, retaining employees has become the key issue in the software industry.

Indian business leaders now pay attention to what gurus like Shiv Khera and Dipak Chopra have to say. Their rooms are filled with slogans such as "Winners don't do different things but they do things differently" and "Only the paranoid survive."

India may be on the path to becoming a superpower in the next century. But the role of human resources development and research and development can be overemphasised. Indian industry should also develop industry-university nexus that would add value to both sides on one hand and also create a synergy which can lead to greatest discoveries for mankind on the other.

Indian corporates should not forget that companies like Hewlett Packard could never have come into existence but for Stanford University. Likewise, companies like Polaroid and Dupont would have been nonentities if there was no MIT or Harvard.

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