Indian Corporate Organizations: Myths and Realities


There are several myths about Indian organizations and this is sometimes perpetuated by Indians themselves. Most of these myths are wrong. Today the Indian metamorphosis into global organizations is complete. There is no going back at all. Some dimensions of these myths and realities are sought to be explained in this article.

Introduction

There are several myths about Indian organizations. Since 1991 there has been a huge metamorphosis among Indian organizations. Most myths have been proved wrong at every single point in time. Five famous myths and realities are sought to be discussed here. The first myth is that Indian organizations lack quality in their products. The second myth is that they are and cannot be globally competitive. The third myth is that Indian organizations do not do anything to the society. The fourth myth is that there will be big fishes of the MNCs always eating away the Indian companies. The fifth myth is that the innovation capabilities of Indian organizations is not good.

Indian Quality- Myth and Reality

Indian organizations did have a huge problem with quality in the era of limited competition. They could give a lousy product to the customer and he would get it repaired in the friendly neighborhood mechanic shop.

All this changed in 1991, the watershed year of economic reforms. The Indian quality is now world class. The Chennai based Sundram Fasteners now supplies radiator caps to all General Motors plants throughout the world. The same organization is the sole supplier of a huge variety of fasteners to the Tata Organization called Tata Motors, which itself sells its TATA brand of cars in many countries of the world. Tata Motors is a globally competitive organization.

TVS Motors has its plants abroad. Its brand of motorcycles is world class. These two are number two or three in the market, dominated by another Indian organization called Hero Motor corp. This organization broke away with Honda, as the latter wanted the majority stake. The same happened for TVS Motors which broke away from Suzuki.

Mahindra and Mahindra and TAFE are able to export their tractors around the world. Indian exports have never been as good as what they have been in the past twenty seven years of economic reforms. Onida is still around and it competes with Samsung and LG, both foreign brands from South Korea in the television industry.

Airtel is a huge competitor in the cell phone industry, the number one service provider. Even Vodafone, the foreign company is only number two. Similarly the Aditya Birla group, with interests in cement, financial services and so on competes very well on quality with the multinational companies.

Indian companies global competitiveness: Myth and Reality

Mahindra and Mahindra is able to export its tractors only because the quality is too good and also reasonably priced. Airtel has entered the African market and is now growing from strength to strength. As already mentioned Sundram Fasteners of the TVS group supplies to all auto majors and in particular to General Motors. Another major company called Brakes India Private Limited has a world class Foundry Division, which supplies castings to all auto majors around the world. It is a Deming Award winner too.

The global competitiveness of Indian companies is increasing day after day. Larsen and Tourbro and BHEL have won several contracts abroad based on their competencies. The Apollo group of hospitals headquartered at Chennai has patients even from the USA, since the quality of its medical care is so good and is very competitive, when compared to American costs. The same happened for a world-class hospital called the Sankara Eye Hospital, also headquartered at Chennai. In fact Chennai is now called the Health Capital of India. There is a huge medical tourism industry flourishing in Chennai.

Indigo Airlines is now just about to fly abroad and is globally competitive. There is this aspect of global competitiveness. Indian companies need to compete with multinational companies here in India, and then abroad.

India Cements and Madras Cements along with Aditya Birla group's Ultratech brand, have successfully competed with multinational giants in India. Same is the case for MRF Tyres and Ceat Tyres. These organizations have given a great importance to quality at all times. The result is that they are very globally competitive. JK Tyres is also in the same league.

Indian companies- Service to society: Myth and Reality

It is a big myth that Indian companies only make record profits and do not contribute to the society. This is a huge myth. Apart from the direct and indirect employment made available through suppliers and subcontractors, Indian companies have always contributed to the wider society.

For example, the Tata group runs schools and hospitals. It has made generous contributions to social causes. In all its tea gardens, the staff are very well taken care of. Its pension schemes are very generous. Ratan Tata taught the entire world, the concept of Corporate Social Responsibility when he reached out to eighty families and gave them generous compensation. Apart from this, he had also offered free treatment for life for each family member. He did after the disastrous Mumbai blasts and loss of lives in a five star Hotel of the same group.

The TVS group runs hospitals. TVS Motors has a social service wing as part of its CSR initiatives that reaches to so many thousands of people. Infosys Technologies and WIPRO have also done so much to the society. WIPRO supports the Government in running the schools and gives various infrastructure facilities. There are so many organizations like Mahindra and Mahindra, the Reliance Group, the JK group and so on that are contributing to the society in their own ways. The cumulative effects of such huge contributions is a very big contribution indeed.

Indian companies- Big Fish and the Small fish: Myth and Reality

Yes, Flipkart, the big online retailer, who had sold millions worth of goods directly to Indian customers has been sold to Walmart. There are some other Indian companies which has been sold to multinational companies.

However, this big fish and small fish theory is not correct at all. The small fishes will continue to thrive in Indian conditions. Take the mineral water industry. Bisleri is the number one brand and it comes from Parle, an Indian company. Pepsico and Coca Cola have their own products but Bisleri competes with them, very successfully. Britannia Biscuits is an Indian company. Same is the case of Parle with its own brands of biscuits. ITC is an Indian multinational. These three dominate the Indian market.

Raymonds is number one in premium suitings. It belongs to the JK group. Arvind Mills is a formidable competitor in the ready made shirts and pants industry. So is the ITC. There are smaller Indian brands with their own niche. The big fish cannot compete with the smaller fish when it comes to culture-specific products and services.

Take hotels. The South Indians can never give up their Iddli and dosas and switch to the fried chicken from KFC. Yes, this is a roaring success in Chennai and Bangalore. But Saravana Bhavan and MTR in Chennai and Bangalore, for example are hugely successful indeed. Through its customization, the former with its presence in UK, USA, Canada and Singapore gives the same taste as what one can eat in Chennai. The Americans lap it up.

Indian companies- Innovation capabilities: Myth and Reality

Unilever Limited is present in shampoos. Cavinkare, which is a formidable competitor cuts down costs by transporting its products in bicycles in the villages. It introduced a very unique concept: get one chik sachet free for every five used shampoo sachet packs of Chik shampoo. Chik shampoo is still the market leader in sachet pack segment.

The trick worked. Hundreds of thousands of customers purchased the product. The rest, as they say is history. Saravana Bhavan follows the Total Quality Management (TQM) processes in its operations. Everything is process based. It is a hugely innovative organization in this respect. Indian organizations have even innovated in quality management. They have utilized the traditional Indian loyalty to innovate on the shop floor.

Indian companies are doing every trick in the trade in marketing and coming up right on top. The smaller players are always innovating. They have their own ways of innovating, even in Human Resources Management. HDFC Bank, for example has a very robust process of building a big talent pipeline.

ICICI Bank and Axis Bank have also innovated in building a big talent pipeline. The Karur Vysya Bank has innovated in terms of the most advanced Information Technology in terms of its Net Banking. It is a modern bank with its traditional touch. There are so many such examples.

Conclusion

It can safely be said that Indian companies have effectively busted every single myth about them. The realities, as explained above are indicative and not exhaustive, due to paucity of space. Indian companies will continue to grow. The IITs and the IIMs will contribute to the growing need for technocrats and trained managers. The realities of the Indian companies is a huge and wonderful success story for all Indians to be proud about.


Comments

Author: DR.N.V. Srinivasa Rao07 Sep 2018 Member Level: Diamond   Points : 6

A good article by the author. The Indian Corporates are going for quality first policy these days. In the prevailing tough competition in the market, the organisations which can deliver quality goods at reasonable prices only will survive. Many organisations started understanding the value addition their products will get if the quality is maintained at the highest level.
Another factor is Corporate Social responsibility. Many corporates started spending a good amount of money for the welfare of the society. The understanding of their responsibility and awareness about the need for the service to the society brought a good change in the thinking of these corporates and they are very eagerly helping the society as per their capacity.
Another misconception of the general public is that the Indian companies are not very good at taking care of their employees. But these days the management perspective in this line is also changed. They proved that they are second to none in taking care of their people and they are extending many facilities to their employees and that is why we see very rarely unrest among the employees of these private MNCs and corporates these days.



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