The Fifth Convocation for graduating students of ISME batch of 2012 held at Hotel Marriott, Whitefield on 2nd March 2013
Mr.Gurunath Kulkarni, Director, Commerce & Industries Dept., Government of Karnataka
The chief guest set the tone by talking about global competition and its effect on the Indian corporate sector. He emphasized the importance of management techniques taught at B-schools like ISME and stated that mere theory is not enough but practice of such techniques is important. He further outlined the importance of innovation as key to competing and said that ISME has to gear up for global competition in its activities through innovation. He opined that Indian companies can compete with multinational corporates. He gave the example of the Auto sector which was opened up in 1983-84 when Maruti-Suzuki, Hero-Honda and others started joint collaborations. Now 100% direct investment is permitted and the result is that there are many global players in the Indian market. He was optimistic that the Indian economy can grow by 10% up from the current 5.5%. He talked about the positive role of the government in encouraging industry and gave the example of the defence industry. He said that all defence-related contracts for supply of equipment has a mandatory clause that stipulates that 30% of the components will have to be indigenously produced in a period of 10 years through transfer of technology. He also allayed the fears over FDI in the retail sector by emphatically stating that FDI in retail will not affect local jobs.
He also added a philosophical dimension by saying that every beginning has an end and every end has a beginning in some way and that that there is a light at the end of the tunnel. He stated that Indian companies can compete with the rest and management graduates from B-schools like ISME can help in this. He concluded his talk by expressing appreciation for the innovative practice at ISME in awarding best employers of ISME graduates and said that this was a very good gesture.
Overview of panel discussion on, “Managing Global Competition: Indian Corporate Experiences.”
Ø P.V. Srinivasan,Sr.VP-Corporate Taxation,Wipro
Ø A.N. Chandramouli, MD, Starragheckert
Ø Ajay Modani, VP-Operations, Capillary
Ø B.V. Srinivas, General Manager, British Biologicals
Ø Dinesh Gopalan, Director-Finance, Fidelity India Services
Ø Dr. S.Devarajan, Sr.VP-Production Engineering, TVS Motor Company
Ø Amit Pande, Director-User Experience Studio,HP India
Ø Suresh Narasimha, Founder CEO,Telibrahma
Ø Chandran Natarajan, IT Expert
Summing up of the panel discussions by : Prof.Nitin Garg, Director, ISME, Bangalore
Rapporteur : Prof. M. K. Lodi, ISME
Dr.Tagat, Academic Mentor, ISME
Dr.Tagat introduced the topic for the panel discussion. He said that global competition is a reality in India. Competition is not only from US-based companies but also from every nation. He said that Indian companies have designed strategies to compete and survive. He explained that the objectives of the panel discussion was to provide an opportunity to faculty and students to listen to views of the corporate sector and it is not meant to be an exhaustive discussion. He concluded his introduction by saying that each panel member was allotted 8 minutes with 2 additional minutes to conclude.
P.V. Srinivasan,Sr.VP-Corporate Taxation,Wipro
Mr. Srinivasan spoke mainly on the macro concept and said that employment is a major factor as many of the technical and managerial graduates are not employable because of the lack of skills. He also spoke of the fact that our exports are inadequate, particularly in view of our huge imports of petroleum products. Managerial talent with Engineering is a good combination. Education should combine the ability to acquire skills and deploy skills. Management graduates should be ready to face global competition as soon as they join the corporate sector. Therefore the first requirement is−skills to meet global competition.
He also emphasized the importance of the growth of services. He spoke about an important development in the scope of Indian labour−from cheap labour to effective labour with the skills to deliver with cost effectiveness. He spoke about an integrated world and said that everyone is required to put in 75 hours of work; otherwise they will be out of job. He also spoke about the importance of education and services. He dwelt at length on the importance of import and to make India a net export` nation and how to curb the import of gold. The import of fossil fuels is a challenge since development of renewable sources of energy is costly. This will automatically push up our imports because of our need for greater quantity of fossil fuels. Therefore, it is imperative to increase exports of services because services are renewable but goods are not. He concluded by advising the management graduates not to have merely a national mindset but to inculcate a global mindset.
A.N. Chandramouli, MD, Starragheckert
Mr.Chandramouli spoke about the manufacturing sector and in particular of the importance of manufacturing excellence. He spoke about the manufacturing policy (2011). He said that currently manufacturing is 16% of GDP and it should increase to 25%. He also said `the GDP should grow to 12% from the present 5.5% with all three sectors— Farming, Manufacturing and Services, contributing in equal measure as this, according to him, would be an ideal mix of GDP. He expressed optimism that by 2050 India would be among the top 3 GDP-nations in the world.
He then shifted his focus onto micro factors and said that to become competitive one should compete with oneself and to continuously improve in manufacturing skills—faster, better and cheaper and that both—organizations and individuals, should look at becoming faster, better and cheaper. He said that eventually India will be better than China because sustainability in India is better than in China. He said that the most important factors in competing effectively are:
He further stated that operational excellence should be allied with financial and marketing excellence. He said that now Indian multinational companies have arrived on the world stage. He concluded by emphasizing the importance of flexibility and break-through innovation as important factors in competitiveness.
Ajay Modani, VP-Operations, Capillary
He talked about growing competition which is the order of the day, and said that the first priority for organizations is to get the ‘right people,’ and create the right work environment. He said this will lead to better product/services and right marketing Strategies. He also said that innovation is the order of the day. He concluded by stating that Indian companies are not afraid of competition because Indians are at the top in many US companies.
B.V. Srinivas, General Manager, British Biologicals
He spoke primarily about the Pharma sector. He started by talking about India’s population which is around 1.3 billion and that the young population (between 25-45 years), comprise 65% of the population. This translates into a huge pool of talent. But talent is still a problem as there are not enough people with the right skills. He focused on the Pharma sector and said that there are two periods in the Pharma sector—the period before 2005 and the period after because of the Pharma policy of 2005 which reversed the earlier system of process patents to product patents. He said that the priority is to manage health-care costs. He said that after 2005 the WTO and TRIPPS made it mandatory to move away from process patenting to product patenting. This will result in price of drugs going up since Indian companies cannot introduce drugs not patented by them and only MNC’s can, but they can manufacture drugs under license. However, there are special provisions for certain drugs which are essential. Technology in India has still not improved on par with the rest; R & D by Indian companies is still virtually non-existent except for some companies like Ranbaxy and Cipla. Also, supply-chain management in India is not very good because of poor infrastructure. The major issue confronting Pharma companies in India is attracting and retaining talent as attrition levels are very high, between 30-40%. In view of this, he suggested that Management schools like ISME should encourage students to stay longer at companies and not to jump frequently.
Dinesh Gopalan, Director-Finance, Fidelity India Services
He dwelt on the long 100 year history of India of exporting talent as India was a nation of entrepreneurs with certain castes specializing in entrepreneurship, such as the Nadars and Chettiars of Tamil Nadu in Asia, the Marwaris and Baniyas in the North. He spoke about the home-grown stories of the diamond trade with the Jains of Gujarat dominating this trade and competing with the Jews. He said that 50% of the diamond trade in Antwerp is controlled by the Jains from Gujarat and Surat has become the centre of the diamond trade. He further talked about the Patels in the US and how they are present in the Motel business. He also reiterated that many MNCs are headed by Indians. These are all Indian success stories. He further said that even in the Academic filed Indians have excelled and many Indians are Deans in Management schools in the US.
He talked about the socialistic model of economy that India followed right from Independence with the attendant license-permit raj which continued the heritage of the British control over Indian industry. But post 1991, liberalization set in and brought in its wake many changes. But even today, infrastructure is still a hurdle because of inadequate government action. Education is still under government control with not much freedom to innovate.
Another problem afflicting Indian economy is corruption and rent-seeking. He said that even foreign MNCs do not find it easy in India. But he also talked about the silver lining in the Indian scenario—the success stories of the movie industry and the IT industry which are relatively free of government interference.
He finished off by exhorting the youth to drop the fetters and break the chains. He said that what India needs is:
Ø Less government
Ø Less bureaucracy, and
Ø More corporate innovation.
Dr. S.Devarajan, Sr.VP-Production Engineering, TVS Motor Company.
His focus was on the Automobile sector. He commenced by stating that the growth of a nation depends on mobility and the auto sector is vital for this growth. He traced the origin of the growth of the auto sector to 30 years back when Maruti was set up as a joint venture.
He said that the following is important for industry to survive and compete successfully:
Ø Quality of product
Ø Quality of manufacturing
Ø Quality of service.
He emphasized the importance of strengthening the base of the company through quality. He said completing an MBA is not the completion of education but the starting.
He stated that to compete successfully, companies must eliminate waste to reduce cost ,as 85% of cost of manufacturing is material cost. To achieve this, companies must use techniques such as 6-sigma, Lean Manufacturing, TPM, TQM etc. Companies must improve efficiency.
He also talked about Logistics as an important element in managing competition and that it was also important to make products reach the customer faster and cheaper.
He mentioned the following 7 parameters as important in the current global scenario:
3. Delivery on time(earlier the accepted norm to develop a new product was 36 months but now that period has come down to 6 months)
5. Energy conservation
He said that one must look at hurdles as opportunities. He also gave an interesting suggestion about work-life balance and said that maximum of 80% time should be in work and at least 20% time should be reserved for personal life issues.
He emphasized the importance of combining individualism with team work. He also talked about the importance of 2 things in life—sustainability and innovation.
He concluded by talking about the importance of grabbing the mind-share of the customer.
Amit Pande, Director-User Experience Studio, HP India
Mr. Pande provided the panel with an interesting perspective on the topic by focusing on the aspect of design. He quoted Steve jobs on design, “Design is not the way it looks but how it works.”
He referred to a study in the UK which found that companies that invested in Design out-performed other companies by 200%.
He divided his talk into 3 important aspects:
1. How design helps differentiation
2. Design and Customer centricity
3. How design can drive innovation
He said that the pace of change is unprecedented; the world is getting inter-connected and competitors are being created faster and in future, even from remote countries like Estonia/Jakarta/Cambodia because of internet.
He said that Design is commonly mistaken as ‘surface’ or ‘appearance.’
He also said that transparency is important, particularly in the printing of brochures which commonly highlight strengths while other features are mentioned in small print.
He said that while organizations are working with a 20th century mindset but the problems are of the 21stcentury
He concluded by specifying the following 2 takeaways:
Ø Collaborator or competitor is not local but global, therefore one must invest in personal brand-building
Ø Build a brain trust around you for innovation and design.
Suresh Narasimha, Founder CEO,Telibrahma
He commenced his talk by advising the graduating students that “studies are not over.”
He then spoke about cost competitiveness; therefore he suggested that MBA graduates should take lower salaries.
He invited management graduates to join start-ups because of entrepreneurship. He emphatically stated that if an entrepreneur is successful in India then he earns the world’s respect, because an Indian entrepreneur has a higher reputation abroad.
He said that price is no more a differentiator and we must look to give the customer something which is different.
He gave the following advice to the MBA graduates:
Ø To improve passion to learn
Ø Get hands dirty—stop using jargon
Ø User experience is important
Ø To actually sell products, even for small financial returns
Chandran Natarajan, IT Expert
He focused on the procurement and bidding process in managing competition. He said that the procurement process is weak and that it has become a disease. He talked about the bidding process for a big contract but there was no clear ownership of the process. He said that underbidding is the main problem. He said that the bidding and procurement problems are not restricted to the government but they are also present in large, private companies. He called this process as ‘management by chaos.’
He gave the interesting example of how, in the UK, the government collected 90 million pounds through traffic fines. He said that end-to-end information was available to the UK traffic department.
He warned that unless the bidding and procurement process improves we will not be fit for global competition. He said that sales follows bid-management and does not precede it. It is important for organizations to meet tender time limits
He concluded by talking about the importance of the ability to make a quality bid and also to focus on sub-contractors who are vital cogs in the bidding process. These two factors obstruct our global competitiveness.
Labour arbitrage-to convert raw material and provide value addition. Manufacturing sector is important because of the employment of blue collar employees which ensures a better distribution of wages than in the IT sector where less number of people earn more wages.
Open-house with the audience
On conclusion of the panel discussions, the audience was invited to raise questions to the panel members.
The discussions with the audience mainly centered around the following three questions:
1. A student of ISME raised the question about the growth of the GDP when the services sector was slowing down and queried as to how would the services sector contribute to this increased growth. This question was specifically addressed to the service sector representative.
2. Another student asked why there are so few books on management authored by Indians
3. A faculty member probed the issue of re-shoring or the re-location of US manufacturing company bases in Asia, specifically China, back to the US in view of the reducing differentials in terms of labour cost and asked how these manufacturing companies in India are going to deal with this development.
Summing up of panel discussions by Prof.Nitin Garg, Director, ISME
Mr. Nitin briefly referred to the one thousand-year historical heritage of entrepreneurship in India and the strides made in the past 20 years by Indian entrepreneurs. He summed up the panel discussions succinctly by stating that the panel has pointed out the following aspects for Indian Corporations to be globally competitive:
1. People aspect—investment in the right education system and Training
2. Innovation—to be more innovative in products and processes
3. Excellence and efficiency—in the entire product life-cycle
4. Logistics—have an efficient global supply chain
5. Customer-centric approach—in all functions
6. Entrepreneurship—In the DNA of Society
7. Ability to raise finances—Through various sources, both national and global
8. Government Policies—To encourage fair global competition
9. Infrastructure—To develop suitable infrastructure that can support industrial activities