Organisations and Principles of Management

The Indian Manager in a Global Context

The following article is a summary of a talk given by R. Gopalakrishnan, Executive Director, Tata Sons Ltd at the “India Leadership Lecture Series” instituted by SIES College of Management Studies (SIESCOMS).

The world, according to me, was pretty much globalised before the 19th century. People could move about freely without passports and travel papers. They could acquire knowledge from anyone, they could trade with anyone and use any currency, because trade and supply / demand were the determinants of what money could buy. Let me recall some facts from Indian and world history:

  • Merchants from Harappa and Mohenjodaro were trading with Sumeria as early as 2300 B.C.
  • The world’s first university was established in Takshila in 700 B.C. It taught sixty subjects and had 10,500 students from all over the world
  • Jesus’ apostle St. Thomas arrived in Kerala in the first century and moved freely across South India. He died in Madras at San Thome where his cemetery stands today
  • Fa Hien and Hiuen Tsang freely travelled all over India in the seventh century, writing their valuable observations about the country
  • In 1498, when Vasco da Gama sailed into Calicut, it was already a thriving port familiar to Arab and Chinese merchants
  • For eighty years from 1835 to 1915, India had a consistent and handsome trade surplus
  • As late as the 1920s, India was ranked fourth in world trade with a market share of 2.5 percent (against well below 1 percent today)

What changed this globalised order was the concept of ‘the country’ or ‘the nation’ that developed around the 1860s. Nationalistic and inward-looking policies were adopted and implemented by governments in a manner that took no cognisance of its potential deleterious effect on other nations. This was part of the background to the two world wars. In India’s case, the combination of colonialism and socialism over the last 150 years led her to become inward looking and lose her global outlook.

I now, based on my experiences, put forth my understanding on the subject.

It takes an exceptional domestic leader plus something to be a global leader

A manager must first be an exceptional leader in the domestic context before he can be even reckoned for a position of global leadership. Domestic mediocres do not become global leaders.

I recall an outstanding young marketeer, an Englishman sent to Hindustan Lever as the Marketing Director twenty-five years ago. Although he must have had an impeccable CV, unfortunately, he turned out to be very poor in adaptability and soon left Unilever. As against this is David Orr who came to India as early as the 1950s, and went on to become the Chairman of Unilever. If there is a single trait that the domestic leader must demonstrate to be a global leader, it is adaptability. Adaptability to my mind means four distinct and increasingly difficult skills

  • to operate across borders with confidence;
  • to rise above the particularities of regions and cultures;
  • to revel in diversity; and,
  • to operate in spite of high ambiguity and frustration.

Expatriation is expensive, planned expatriation is a terrific tool, but ad hoc expatriation is disastrous

Often people who are sent on overseas assignments are capable but culturally illiterate. One interesting piece of research shows that out of 100 managers sent abroad by US companies, 20 returned early because of job or location dissatisfaction. Of the balance 80 who stayed, another 25 did not perform up to expectations, leaving 55 who completed the assignment satisfactorily. Of these 55, fifteen left the firm, leaving only 40 out of 100 for the firm to use. How to minimise this high level of attrition? My advice is that the firm must select managers with the following five characteristics for expatriation:-

  • A drive to communicate
  • Broad-based sociability
  • Cultural flexibility
  • Cosmopolitan orientation
  • Collaborative negotiation

Globalisation is a way of thinking and a way of doing, and not a strategy or a technique

For each firm, it is important to pin down the specific fruits it seeks, thus defining globalisation as its own unique approach to solve a defined problem or tap an opportunity.

I quite like the generic benefit term called CONELEARN, coined by two European thinkers. They argue that there are three generic benefits from globalisation: COst advantages, NEtwork benefits, LEARNing opportunities.

Globalisation can go hand in hand with a strong national identity

Unilever has always tried to be seen as a local company with an Anglo-Dutch parentage. This yearning is clearly reflected in the names of its subsidiaries: Hindustan Lever, Nippon Lever, Unilever Arabia, Lever Malaysia and so on. More often than not, Unilever appointed local managers at the seniormost levels as early as possible.

The foundation for developing global leadership skills is laid early in life and early in the career path

Aldous Huxley once observed: “Experience is not what happens to a man. It is what a man does with what happens to him.” In general, the development of global leaders requires early and multiple exposures across functions, across geographies and across industry segments.

To conclude, the four Ts of training, transfer, teams and travel are the necessary conditions for success for any company trying to build a global skill base.

Be the first to comment - What do you think?

Five basic management skills

  • Technical skills may be most important in directing and controlling.

  • Human relations skills are especially important in organizing and directing.

  • Planning utilizes conceptual skills.

  • Decision making and time management skills are important for all management activities.

Be the first to comment - What do you think?

CRM needs Huge Investments

If your company understands that CRM is critical but the funds are not available to implement a quality capability, one possible way to move ahead could be the “release the critical funds” strategy. It requires you to think of CRM as a holistic business strategy and one way to fund a holistic CRM strategy is to create operational efficiencies in another part of the business, for e.g., in the back office.
Consumer Behavior
Most companies have invested huge quantities of capital in their back-office environments. These companies need to free investments in one area of the business to fund more important business strategies such as CRM, to move forward in today’s recession hit environment.
Companies need to view assets in two categories, strategic and non-strategic.
Strategic assets are those viewed as vital to the future growth and success of the business.
  • It simply implies that they represent an opportunity to gain access to locked-up capital.
  • Provide growth in good times and insulate against downturns.
  • Investments that strengthen relationships with customers such as CRM, sales force automation (SFA), marketing automation (MA) and customer interaction centres could be considered strategic assets.
Non-strategic investments may include back office systems, desktop maintenance legacy systems or any other non-critical activity that is done in-house. 
After this segregation, alternative arrangements like outsourcing should be considered to reduce costs in these non-strategic areas in order to free capital for strategic IT investments.

Be the first to comment - What do you think?

What Is An Organization?

OrganizationsIt is a deliberate arrangement of people to accomplish some specific purpose

  • each organization has a distinct purpose
  • each organization is composed of people
  • all organizations develop some deliberate structure

Today’s organizations have adopted:

  • flexible work arrangements
  • open communications
  • greater responsiveness to changes
The Changing Nature of Organizations
(Click on Table to Enlarge)

    Be the first to comment - What do you think?

    Why Study Management?

    Universality of Management
    The MBA Advantage: Why It Pays to Get an MBA
    Management is needed

    • in all types and sizes of organizations
    • at all organizational levels
    • in all work areas

    Management functions must be performed in all organizations

    • consequently, have vested interest in improving management
    The Universal Need For Management (Click To Enlarge)

    The Reality of Work

    • most people have some managerial responsibilities
    • most people work for a manager

    Challenges of Being a Manager

    • being a manager is hard work
    • must deal with a variety of personalities
    • must motivate workers in the face of uncertainty

    Rewards of Being a Manager

    • create an environment that allows others to do their best work
    • provide opportunities to think creatively
    • help others find meaning and fulfillment
    • meet and work with a variety of people

    Be the first to comment - What do you think?