Today’s indian business scene

1. Today’s Indian Business
Scene

2. What we will discuss
1. Overview of the Business Climate and context past and
present
2. Changes in the World of Work & Impact on Indian
Organizations
3. India’s problems in achieving Global Standards
4. Changing IR Scene in India
6. A Case Study
7. Areas to be considered as you consider business in India
8. Q and A (but please ask any time!

3. Business Climate

5. India's place in the Global Economy
• India is
– a country of potential.
– Cocked slingshot
– Target within range of Indian Capability
• India has
– Stable economy
– Continued economic growth
– Governmental regulations changes
– FDI enhancements
– NRI outreach
– Reversal/slowing down of brain drain and welcome
home to many
– Leveraged IT/ITES Industry strength around the
world

6. India in the Global Market
• In general India public and/or private
sectors have:
– Started work on infrastructure
– Leveraged their IT capability to take the
lead in the global market in this industry
– Expanded the reach of their already global
Indian companies
– Built presence in Pharmaceutical, Medical,
Bio Chemical, Cement, Financial, Rubber,
Retail, Cosmetic, Design, Entertainment,
Garment and food industries as well as IT.

7. India in the Global Market
• India’s Strengths:
– Population
– Ability to adapt and move beyond obstacles and
barriers with seemingly graceful and instinctive
responses
– Rising from the inside out on the shoulders and in
the minds of the Indian people
• pushing the limits of individual contributions and quietly
but methodically leveraging physical and financial global
presence
• India’s Goal
– secure the future that has been thousands of
years in the making.

8. College Graduates and
Entrepreneurs
• Graduates still emerging in significant numbers
– not all graduate with the perquisite skills to fill
projected career and job opportunities
• The education system in India is
– aggressively reaching out to business for
advice and support
– business is proactively moving into the realm
of education
• establishing Academies as part of their
corporate structure
• by giving time and energy to nearby
Universities and Colleges
• building the Vocational Technical Sector of
the education system that had not
previously been strong.

9. HOWEVER……
• There is still MUCH to do before the
future is secure
– Accomplished without government
intervention or mandate
– It is in the hands of the business
leaders and progressive
academicians
– It operates and even thrives around
extremes

10. An Economy in Transition
• Predicted to change shape by 2025
• From To

11. Spawned in the development and growth
of the IT and ITES Service Industry

12. Changes in the
World of Work

13. What Changed Workplace of 21st Century
1. GLOBALIZATION
2. Information Revolution/Internet
3. New technology
4. HRM Philosophy:
Psychological Contract

14. The Globalization
and
its
Impact on Business

15. Today’s Business Realities
Assembly
A Global Web
Parts
Sales
Sales
Sales
Advertising Parts Parts Design
Parts

16. In India these
Developments
Impact all sectors
including
Manufacturing
Characteristics of Globalization
•Chaotic Competition
•Radical change
•Opportunities
•Strategic alliances
•Complexity/Uncertainty
•Flexibility
•Customer focus
•Saliency of People Mgt Issues
Critical issues in shifts from Capital to Knowledge Economy
© Debi S. Saini, 2004

17. “ Hanging on for dear life” : Survival in the face of turbulent change

18. Indian companies
striving to be
Global Leaders
in this exciting
Business Environment
The intensity of this
will be far greater
in the near term as the velocity of
change is increasing

19. Indian Business is adjusting its sails and setting
sites on new horizons

20. Every journey to corporate
transformation requires taking
a strategic step in the desired
direction
A journey of 100 miles begins
with a single step
Indian businesses are taking giant steps

21. The problems India
Faces in
Achieving Global
Standards:
Challenges for HR

22. Problems in Achieving Global Standards
1. Acceptance of how things are which inhibits growth
toward world class/professional/vision
2. Hierarchical mindset
3. Lack of process sensitivity
4. Sense of collective paralysis
problems too big and too
many
5. No frame of reference for creating “customer WOW”

23. Problems in Achieving Global Standards continued…
6. Attitude toward time
7. Slow acceptance of change : rigid beliefs
and personal values
8. Different approach toward safety
9. Slow internalization of Work ethic
10. Difficulty in differentiating between excellence &
mediocrity

24. Changing IR
Scene
at Global &
National Levels
Reflecting
New Thinking &
Mindsets

25. India is
governed
by a Constitution
that foresaw a
welfare state
and espouses
the values of
trade
unionism
and
social justice

26. 1. BUT the role is Changing
• Welfare state: inefficient
• Government as facilitator
• Export-oriented production (SEZs)
• Changed labour policies of states

27. 2. Global Trends – India Trends
1. Multilateral IR: consumer/public/gender issues
2. New issues:
––Customer Creation/sustenance
––Protecting environment
––Gender issues
––Safety promotion
––Child labour abolition
3. Media’s role in new issues

28. Building Cooperation with Unions
Source: The Conference Board of Canada. Figure 16.6

29. 3. Emphasis on Performance-related
Pay
• Flat organization --Flexible
pay
• Cost saving: a big concern
• Competencies development
• Knowledge pay in high-tech.
industries

30. 4. Changed Thinking of State
• Changed Govt. thinking
--July 1991 Economic Policy
--2nd NCL: July 2002
• Rationalize Labour Law
• Social justice to market & trickle down
--Vigorous attack on welfare state ideology

31. 5. The NEW HRM
New Trends in India: IR practices
rooted in HR Strategy
• Identify & enforce behavior
• Strive for Competitive advantage
• Focus on new interventions
• HRM & IR merged to produce positive energy
• HR strategy is the single most important
Consultancy Area

32. Strategic HRM
Expected to
Deliver
Competitive
Advantage
And
Performance

33. Global BP Influences on
HR Practice and ideology in India
Brockbank
Ulrich
Smallwood
Lev

34. Some Soft Strategic HRM Themes
•Empowerment/
Involvement
•Learning organization
•QWL, welfare: justice
•Employee respect,
fairness, pride,
camaraderie
•Diversity management

35. Influence of “ Intangibles” on Indian Companies
• The most valuable intangible asset for
Hindustan Lever Limited are its brands
• In large degree, market value of Dr.
Reddy’s is a factor of “Quality of their
knowledge base --Investment in R&D
–Leadership”
Dabur has market cap. of nearly 67 times
it’s net worth --With same book value Dalmia
Cement’s market capitalization is 0.65 times

36. Some
Companies
That
Practice
“ Soft”
HR
Strategies

37. Classic Strips (Mfg.): Come Out of Control Mindset
214 workers including contract workers - Most are blue-collar
growth from 4 workers 25 years ago
44 acre campus in Vasai, Mumbai grown from 10x5 ft. space 25
years ago
Main motto “ dignity at work.”
--Believes in: “ valuing every individual, giving people their due,
freedom, respect, opportunity backed by lots of training.”
Won Safety & Environment 2003 award (SIGA given to 5 cos. worldwide.)
Employee spends 2 ½ hrs every month on training (kaizen)
--Co. has a library with trade journals, magazines and books
--Most employees are with the Company for the last 15-20 yrs
--Women make 1/3rd of the workforce
--It includes handicapped people--Proactive diversity policy
--The Company shares with employees a %age of its annual profits

38. Mahindra & Mahindra
• Focus on HR
– Hired a Yale University-educated president of HR
– He was earlier a CEO for 2 Tata Group companies
– Heads 150 HR manager
• Is partner in building Company Strategy
– Responsibilities include CSR
• Business Strategy aimed to give competitive
advantage:
--Talent management
--Creating synergy
--Creating a culture of integration
--Mapping
--Succession planning
--Developing a global mind-set.” (Grossman, 2006).

39. Prudential Process Mgt. Services (PPMS)
• Company with 1,200 employees--Serves Prudential UK’s
President said that if HR fails to live up to expectation, it would be
disastrous to their company.
• Has reduced attrition to 20 % (Industry 45%)
• Strategy comprises:
--Competes on its culture and not on compensation
-- Family (friends, boyfriends, girlfriends) encouraged to visit workplace
--Rapidly enhances their skills
--Offers them a conducive environment; makes them stick
• Sponsors continuing education
--After 18 months, employees are eligible for MBA programs
--Specially tailored with top-rated Indian business schools
--1/2 tuition fee paid by PPMS

40. Susken Communication Technologies, Bangalore
• Pride
--Work culture that exemplifies Co. Values upholds them
• Inspiring vision: “ unleashing India’s creativity.”
• It is a situation of complete trust and equality:
--“ No-monitoring policy” leads to transparency, freedom from fear
--No attendance system --No limit on sick leave that an employee can
avail
--Complete freedom to employees to come & go
--Freedom to think and innovate
• Same rules for all categories of people
--Same hotels when on travel
--CEO as all others fly economy class
--CEO sits in similar cubicles as all others

41. In the Context of
Contemporary
Developments In IR
We can Look at the Crisis at
Honda

42. Police beating HONDA workers on 25th July, 2005

43. The HONDA Case
• Subsidiary of Honda: 3000 employees: Plant set up in
1999
• Aim: Produce product of highest quality at reasonable
price
• Honda philosophy of 3 joys:
Buying/selling/manufacturing
• Alleged indifferent & authoritarian Indian middle mgt.
—Alleged assault by Japanese Manager
• Failed to meet WM expectation: Diwali gift/leave/Lack of
respect
• Worker’s attempt to unionize: Mgt.’s resistance and
action:

44. Key Issues and Problems:
1. Mgmt.’s approach to practicing a non-union model
made them blind to reality DID NOT LISTEN TO
WORKERS
2. Workers viewed Mgmt activity as coercive and
repressive
3. Incompetent people mgt. by Indian Middle
managers—Indifference
4. Indian mgmt. blocking direct access to top company
executive
5. The 3 joys of HONDA were used as a means of
control

45. Key Issues and Problems
7. Issues in cross-cultural management
-- Japanese didn't understand issues in managing Indian people
8. Failure of mgt. to realize importance of Diwali in
Indian IR
9. Tokenism of conciliation in resolving collective
issues
10. Complacency on the part of Indian mgrs. about labour
power

46. Clash between Police and workers on 26 July, 2005

47. Workers
meet Sonia
Gandhi against
alleged
highhandedness
of Honda
management
and the police

48. Key causes of the HONDA’s Difficulty
1.Management taking Workers for granted:
• Power of the former leadership not taken into account – he was
well liked Mr. Singh had been well liked
• No safety valve for Workers or way to address Grievances
• Overlooking the importance of Diwali to Indians – giving only a
small gift (Rs. 600 given)
• Worker facilities not provided - request dismissed
• Strict system of granting leave: Sermons given

49. Management taking Workers for granted
continued…
• Idiosyncratic VP (Mfg.): A hard task master with 14 ft stick
—Kicked a WM who was 2 minutes late after tea
• Too many memos issued: Fear of managerial authority
• WM perceived partiality in posting by managers: Divide & Rule also
• Big difference between Hero-Honda & HMSI salaries: WM living
together
• Negative policies of the mgt. regarding union-formation made
workers more determined - created fertile ground for the flare up
• High-handedness of the police, “ fighting fire with fire”

50. 2. Ill prepared HR/IR team not able to tell
the emperor he had no clothes
—Poor HR Advocate Role
—HR/IR chief as an assistant mgr—He
reported to Mfg. Head
3. Small Number of HR/IR Team:
--Only 10-12 out of 3000 people

51. 4. No internalization of HR procedures &
Practices:
—No procedure for charge sheet
—Japanese thought people never revolt because they are
“ gentle and not aggressive”
5. No alignment of Business & HR/IR Strategy
6. Low salary compared to Hero-Honda (same region)
7. Contract Workers removed every 6 months:
A nguish constant training

52. Lessons in
People
management
from
the HONDA case
as a guide for
Business success

53. 1. Leadership matters
2. Competent HR department is key
3. Well crafted and communicated Mission
and Vision
4. Maintain channels of communication
5. HR Strategy must align with and support
business
6. Listen to Employee concerns and issues
for Organizational Justice
7. Use HR Interventions (BOTH HARD AND
SOFT) as tools for success
(welfare plans, empowerment, reward and
recognition, etc.)

54. 8. Keep cross-cultural issues in view

55. 9. Establish a sense of urgency
10.Recruit and Retain Talent - right person In
right job at the right time
11.Be clear about performance and results –
let them drive success
12.Create short term wins (reward and
recognition)

56. Success in India / value and
understand differences

57. • Thank you
• SHRM
• And SHRM INDIA
• www.shrm.org
• www.shrm.org/india