The Indian way of management

Sumant Sinha        Print Edition: October 3, 2010

Is there an India Way to do business? To understand this, we need to first understand the Indian landscape. If you go back in time - until the 90s - India was a closed economy. The general perception was that once the economy opens up, it would be taken over by the large multinationals. Instead, the opposite happened - Indian businesses reacted positively to the opening of the economy.

They restructured, improved their capital structures, brought in good management skills, and, over a period of time, they professionalised and globalised themselves as well. As Indian businesses have become bigger and globally more important, is there something that can be identified as The India Way of management or doing business? Is there something unique to Indian managers? Yes, there are quite a few unique aspects that can be attributed to Indian managers and The India Way of doing business.

First, unlike other countries, Indian companies are largely led by family promoters. Unlike in the US, an Indian entrepreneur tends to stay with his business till the end. In India, it is also a norm for the promoters' children to take over the business, which is less common in the US or other western countries. The legacy issues are much stronger here than in any other country.

But at the same time, Indian promoters also recognise the need for professional managers. India, therefore, has a situation of both promoters and professional managers running a business and working seamlessly with each other. This is clearly visible in family-promoted Indian conglomerates such as the Tatas, Birlas, Mittals, etc.

As a result, it's a mix of organisational capabilities, management practices, and company culture that sets Indian enterprises apart from firms in other countries. The Indian business is characterised by greater employee engagement, an ability to improvise and creatively deliver value to customers, and missions that extend beyond delivering shareholder value.

The second uniqueness of India is the fact that we have developed very good management talent over the years and this is perhaps most aptly demonstrated by the graduates from the Indian Institutes of Management (IIMs). Now there are more students passing out of Indian B-schools and these young managers are collectively coming together with older experienced managers to create a managerial cadre that has diverse skill sets and who are able to operate successfully both in India and internationally.

There are roughly 30,000 IIM graduates and they form the backbone of India's management talent. In fact, an attempt is being made to get all the IIM alumni and institutes together and form a global pan-IIM network to put this combined talent to better project the Indian management brand.

The third uniqueness about India is the dexterity required to operate a business here. If you can operate a business in India you can do so anywhere. It's not that Indian managers are inherently more creative than their counterparts elsewhere. But they operate in a complex, often volatile environment with much red tape. They, therefore, have to be nimble footed to be able to move with a constantly-changing and evolving policy framework, low quality of infrastructure that reduces smooth flow of physical and financial capital, corruption, bureaucratic procedures that increase transaction costs - all hurdles for doing business in India.

Indian managers are used to finding ways around obstacles, including lack of resources. It's a mindset captured by the Hindi term "jugaad", which refers to a willingness to persistently improvise creative solutions. But, there is also a downside to jugaad - it often leads to less sustainable or lower quality solutions which do not create lasting improvements.

The Indian management style is still being explored and developed. We haven't yet identified a typical style of Indian management. For example, the Japanese style of management had Total Quality Management, or Just in Time Management, etc. In India we don't really have any such commonalities across geographies or across different companies.

More than an Indian management style, it's rather the Indian managers themselves who are better-qualified and betterequipped to run companies efficiently and successfully in a difficult environment.

There is pragmatism, flexibility, ability to work in a difficult operating environment, knowledge of English and democratic values, ability to work in mixed environments with promoters, etc. These are the important facets in The Indian Way of management.

As another facet, we can also increasingly see the emergence of entrepreneurialism as management graduates with more experience leave their jobs and join newer graduates to start their own ventures. This will help to broad-base economic growth in India beyond the traditional promoter families.

These are changes that we are currently seeing taking place in India. Whether we have something that is definably "Indian" in our management style will require further exploration, research and articulation. But the thought process in this direction has certainly started.

- Sumant Sinha, Chairman, Savant Advisers, is an alumnus of IIM Calcutta , Class of 1989
(As told to Anusha Subramanian)

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