INDIAN BUSINESS RISINGTHE CONTEMPORARY WAY OF CONDUCTING BUSINESS.

PRESENTED BY

ANIL VISHNUNAJID MUHAMMED

NIMMY MERIN MATHEW

NITHIN NANU

History……….. The known Economic history of India begins with the Indus Valley

civilization. The Indus civilization's economy appears to have depended significantly on trade, which was facilitated by advances in transport.

Around 600 BC, the Mahajanapadas minted punch-marked silver coins. The period was marked by intensive trade activity and urban development.

By 300 BC, the Maurya Empire united most of the Indian subcontinent.

The political unity and military security allowed for a common economic system and enhanced trade and commerce, with increased agricultural productivity.

 

For the next 1500 years, India produced its classical civilisations such as the Rashtrakutas, Hoysalas and Western Gangas. During this period India is estimated to have had the largest economy of the ancient and medieval world between until 17th century AD, controlling between one third and one fourth of the world's wealth up to the time of Maratha Empire, from whence it rapidly declined during European colonization.

According to economic historian Angus Maddison in his book The World Economy: A Millennial Perspective, India was the richest country in the world and had the world's largest economy until the 17th century AD

After the 1991 economic crisis, the central government launched economic liberalisation. India has turned towards a more capitalist system and has emerged as one of the fastest growing large economies of the world.

On November 2008, 10 terrorists launched

a shockingly violent terrorist attack in Mumbai.

Its termed as India’s “26/11”—ended with the death of more than 170 people, including 28 foreigners, the chief of Mumbai’s antiterrorist squad, and the chairman of Yes Bank.

In India, by contrast, big business leaders had come to be emblematic of national achievement and fortitude. Firms that had been the scene of horrible events were springing back to life in time frames almost unthinkable by post-9/11 standards.

The Taj Mahal Hotel, devastated by the attacks, needed only three weeks to reopen for business. And the world had taken notice.

Many business leaders are deeply involved in societal issues, and they deem it entirely appropriate— even requisite—to voice their views on subjects ranging from climate change to child nutrition. Many Indian firms believe that national growth is essential for their own profitable expansion.

Many companies stand for social goals as well. This mind-set can be seen in the willingness of the cochairman and former chief executive of Infosys Technologies, Nandan Nilekani, to accept the call to direct India’s national effort to provide a unique digital identification number to all of its 1.1 billion citizens.

It is found in the personnel mantra at HCL, the fast-growing international IT service firm: “Employee First, Customer Second.”

Indian way An important difference between Indian and Western

company leaders in how they focus their energy. When asked to Indian leaders to prioritize their key responsibilities, this is how they ranked the top four:

1. Chief input for business strategy2. Keeper of organizational culture3. Guide, teacher, or role model for employees4. Representative of owner and investor interests

It’s striking that they put shareholders in fourth place, where as in the us shareholders come first.

Examples like Mahindra and Mahindra, Tata

They didn’t mention skill in financial markets, mergers and acquisitions, or deal making

Western CEOs often claim underpin their companies’ performance

What they said was their source of competitive advantage lay deep inside their companies, in their people.

HOW??????????

Long term internally focused view

They make aggressive investment in employee development

Not all Indian CEO’s are saint

But Just as not all US CEO’s ignoring social Concerns

Leaders do engage with country , Culture & Employees

It constitute the centre piece in the model

Principal practices in INDIAN WAY Holistic engagement with employees.

Indian business leaders see their firms as organic enterprises where sustaining employee morale and building company culture are treated as critical obligations and foundations of their success. People are viewed as assets to be developed, not costs to be reduced; as sources of creative ideas and pragmatic solutions; and as bringing leadership at their own level to the company. Creating ever-stronger capabilities in the workforce is a driving objective.

Improvisation and adaptability. Improvisation is also at the heart of the India Way. In a

complex, often volatile environment with few resources and much red tape,business leaders have learned to rely on their wits to circumvent the innumerable hurdles they recurrently confront. Sometimes peppering English-language conversations, the Hindi term jugaad captures much of the mind-set. Anyone who has seen outdated equipment nursed along a generation past its expected lifetime with retrofitted spare parts and jerry-rigged solutions has witnessed jugaad in action. Adaptability is crucial as well, and it too is frequently referenced in an English-Hindi hybrid, adjust kar lenge—“we will adjust or accommodate.”

 

Creative value propositions: Given the large and intensely competitive

domestic market with discerning and value conscious customers, most of modest means, Indian business leaders have of necessity learned to be highly creative in developing their value propositions. Though steeped in an ancient culture, Indian business leaders are inventing entirely new product and service concepts to satisfy the needs of demanding consumers and to do so with extreme efficiency.

Broad mission and purpose: Indian business leaders place special emphasis on

personal values, a vision of growth, and strategic thinking. Besides servicing the needs of their stockholders—a necessity of CEOs everywhere—Indian business leaders stress broader societal purpose. The leaders of Indian business take pride in enterprise success—but also in family prosperity, regional advancement, and national renaissance.

The India Way comprises a mix of organizational capabilities, managerial practices, and distinctive aspects of company cultures that set Indian enterprises apart from firms in other countries.

The American business culture gives very much inportance for its stakeholders, where as in Indian context they take into consideration the social purpose and CSR.

The Indian companies give importance to employee empowerment HCL CASE.

Vineet Nayyar- CEO of Indian IT Service Giant

55,000 employees and makes a turnover of $24 billion market capital

“Employees first Customer second – Motto

I have destroyed the CEO office

HCL

Invited employees to evaluate their bosses & their bosses boss

Posted reviews on the firms intranet for all to see

“Transperancy” empowerment

Decision would be made at the point where the descision should be made

The striking part is he is given authority to the Employees

Organization would be inverted

CEO of the office become irrelevant

Envisioning & Articulating a path to the future,Strategic thinking Guiding changes

Being Inspirational Accountable & Entrepreneurial

Coreful talent selection grooming&practices that advances business goals

Optimizing Organizational Structures & articulating core values

Skills Indian Leaders value most

Over the past five years, Indian leaders began spending more time on internal issues, while U.S. CEOs spent more time on external affairs.

Indian leaders see their role in in strategy development

Western CEO’s leave it to profit centre heads

Indian leaders taking a visible role in shaping strategis their managers bring to them

Most widely applied tool in US

Indian CEO’s scored high on ‘Transformational’

( Charismatic leadership designed to encourage employees)

In US Scored high in ‘ Transactional’ (Motivating employees to act in the intrest of business by striking deals with them)

Multifactor Leadership Questionnaire(MLQ)

The Indian companies are not devoid of scams still. The Satyam case is an example for this.

“We Think in English and Act in Indian”

We “think in English and act in Indian,” observed R. Gopalakrishnan, the executive director of Tata Sons, the holding company of the Tata Group.

“For the Indian manager,” Gopalakrishnan explained, “his intelectual tradition, his y-axis, is Anglo-American, and his action vec-tor, his x-axis, is in the Indian ethos.

So it can be said that the Indian companies have their own way of conducting business i.e. Suitable for the Indian environment and culture.

Compared to the west, the Indian executives are more respectful of seniority, government, and tradition where as LOBBYING is prominent in the US.

Tata Nano can be sited as an example for ACTING INDIAN

Tata Nano was introduced in a time when the US and other western companies were focusing on the upcoming trend of the SUVs that provided the fastest and greatest profit margins.

At that time Tata identified the potential Indian market that needed cheaper cars. Though it wont be able to produce high profit margins, still profit can be earned through mass production.

They came up with a car whose cost was almost 75% less than the existing low end cars.

1991 Virtually no business outside India When Ratan Tata took the charge First strategy

was to go global In 2000 Congolomerate 96 companies on a wave

of aqusition using case by case trial & error approach to aquire

Tetley group, Daewoo,Boston Ritz Carlton Hotel Half of the tata revenue came from other

countries Based on the strategy of Ratan tatas How to

compete across international markets

TATA Group

Decision about pricing &market positioning was the primary objective which is a typical western strategy

Managers and engineers set to work

They cut the cost in every turn

By eliminating the scooter parts & eliminating extras such as power window

Tata Nano

Has The Indian Economy Benefitted?

The American GDP in 2008 stood at 1.64 times its size in 1990, while the Indian GDP had increased over that same eighteen-year period by a factor of 3.02 (see figure A-1).

The disparity in growth rates is likely increase even further.

Though it was believed that the Indian economy would also collapse during the great recession of 2009, its was observed that the economy still managed to grow.

No employees from Infosys was fired during this time where as in the US many lost their jobs

The FDI inflow as well as outflow is also increasing.

The number of mergers and acquisitions has also increased over the years by Indian companies in abroad and by foreign companies in India.

According to statistics the private equity investment rate has increased over the years and the poverty rate also has shown some decrease all which states that the economy has developed over the years.

Government bias Towards Eminent Corporates

Krishna Godavari D6 basinKrishna Godavari basin is spread across 50,000 sq km in the Krishna River and Godavari River basins near the coast of Andhra Pradesh. The site Dhirubhai-6 is where Reliance Industries discovered the biggest gas reserves in India. In government records the 7,645 sq km block is known as KG-DWN-98/1. The KG basin is considered to be the largest natural gas basin in India

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How did Reliance Industries bag the KG-D6 Basin Government of India opened up hydrocarbon

exploration and production in the country to private and foreign players in 1991.

Small and medium sized blocks were opened up in this ground which was followed up by giving out bigger blocks in 1999 as per new exploration and licensing policy. Through NELP , Reliance bagged the D6 block.

Government enters into contractual relationship with the private players through a Production Sharing Contract (PSC). The PSC lays out the roles and resposibilities of all parties.

Before the production started the Reliance group split between the two brothers, with the gas business remaining with Mukesh Ambani, the elder brother.

The two brothers fought over the huge reserve of gas even though it was not theirs in the first place.

PSC clearly defines “By virtue of article 297 of the Constitution of India, Petroleum is a natural state in the territorial waters and with the Union Of India.

The bothers split the gas reserve too. A family pact between the brothers which was never made public till the issue blew out.

Cont.. Anil Ambani owned RNRL in 2005 citing the

agreement by brothers, claimed it had rights to gas from Reliance Kg basin for 17 years at $2.34 per mmBtu (million British thermal unit).

The government did not raise the point that the gas reserves belonged to the country and was not the property of Ambani family.

Even the Prime Minister ManMohan Singh requested the brothers to settle their differences in the interests of the country.

In June 2004, The National Thermal Power Corporation (NTPC) invited bids for supply of gas for its 2600MW power plant in Kawas and Gandhar.

NTPC’s power plant is ready bid when Reliance Industries was hopeful of starting production of gas.

A letter of Intent was issued to Reliance Industries to supply 132 trillion units of gas per annum.

A CAG report released in 2011 castigated the oil ministry along with Reliance to retain its entire KG-D6 block in contravention of the PSC.

As per PSC , Reliance should have relinquished 25% of the total area outside the discoveries in 2004-05, but the entire area was declared as discovery area.

Thank you…….