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How India can be a global leader
T N Ninan
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February 03, 2007

Back in the 1970s and 1980s, the Murugappa group in Chennai tried to introduce the best management practices picked up from its British collaborator in a cycle-manufacturing venture. But it found that the home-grown Hero group in distant Ludhiana was running rings round it.

Looking back, Murugappa's retired chairman, MV Subbiah, thinks the difference was made by Hero following a business style that was more rooted in Indian culture (outsourcing to smaller family enterprises and doing only the final assembly, rather than centralising production in a top-down control environment and seeking economies of scale, as the British partners were advising Murugappa to do). Subbiah argues that if Indian companies do not understand the roots of India's culture and genius, they will not succeed despite all the hoopla over 9 per cent GDP growth.

Why have we succeeded in software and pharma research, he asks, and gives the answer: Because in both areas, people can work on their own, figuring out algorithms or molecular structures. The negative conclusion: Indians don't work well in teams.

Making a leap from contemporary business to psychology, Subbiah argues that the Vedic culture developed along the hierarchy of needs defined by Abraham Maslow: the lower levels of need (physiological and safety-like food and shelter) were easily met in the fertile Gangetic plain, so people focused on the highest level of need: self-actualisation.

Hence Indians' natural inclination is to want to figure things out for themselves rather than simply take instructions, to argue a point, and to have different opinions. In other words, regimentation will not work, you have to provide room for creativity and tolerate the hurly-burly of a raucous democracy.

In some ways, Subbiah is echoing a point made by the leaders of many global corporations: when it comes to repeat jobs to be done with monotonous regularity on a massive scale, it is hard to beat the Chinese worker for robotic efficiency.

But when it comes to applying some thought and turning out engineered products on the factory floor, the Indian worker is superior. Subbiah points out that even companies within the same TVS group that have won the prestigious Deming quality prize (Suresh Krishna's Sundaram Clayton and Venu Srinivasan's TVS Motors) have followed different styles of management, under different Japanese gurus.

We have to organise our businesses in line with our own genius, not follow western concepts of management and organisation that may be alien to our cultural orientation, he says.

Subbiah, who in his retirement has worked on how family groups in business should manage their affairs, and taught at Northwestern University's Kellogg School of Management in Illinois, extends the argument to politics.

He asks why most western democracies become two-party systems, while in India every party splinters. It is the same reason, he says, why most business families split, while western business families stay together in the business for many generations.

Subordinating your interests to the group's does not come naturally to us, he suggests. Nor, he argues, do people plan for their succession. "Have you wondered why we don't build institutions?"-defining an institution as one that remains focused on its core purpose and organising principles through at least three generations of leadership.

If this sounds like a list of negatives, Subbiah also thinks that the west is adopting some Indian concepts. The idea of situational leadership that is now advocated (you chose the leader for a specific function, rather than have the same leader for all functions) is borrowed from the Mahabharata, for instance. And when it comes to the practice of statecraft, he quotes Chanakya's prescription of the techniques to use in diplomacy: saam, daam, dund, bhed (persuade, bribe, punish, intrigue). "Deceipt and intrigue are advocated in our culture."

I ask whether he thinks he has the "theory of everything" for Indian business practice, but he shies away from the claim, arguing that he is not an academic but an observer. And it is true that what Subbiah says (over an informal lunch) is more a loose formulation than a rigorous exposition. Nevertheless, it does leave you thinking.
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