COMMENTARY
SPECIALS
CHAT
ARCHIVES

The Rediff Business Interview/ C K Prahalad

'India will see dramatic changes from within, not from the top'

During his recent visit to India, management guru C K Prahalad, Harvey C Fruehauf Professor of Business Administration at the University of Michigan Business School, underlined that Indian companies, and India at large, are morphing. Syed Firdaus Ashraf quizzed him more on this and other subjects in an interview.

You have been saying that India is morphing and not changing. What do you mean by that?

I think the point is a simple one. The change and transformation always take place from top. But what is happening in India is autonomous experience and in a highly decentralised fashion.

So, hundreds and thousands of experiments are taking place. When it will fundamentally change is a matter of opinion. And therefore, I see dramatic changes coming in India from within and not from the top.

Over the last 40 years, we have looked up to the central government for way of mandating change and providing public policy. I think, the consumers are changing in this country faster.

By top level, you mean the government? Or the top managements in Indian companies?

Both.

Do you think that Indian companies are globally competitive?

I think to ask a broad question like that, about all Indian companies, does not make sense. There is wide variance in commitment and the capabilities of the Indian companies.

Twenty years ago, it made sense for Indian companies to make a generality. There are companies which are leading and are leaders.

You take, for instance, software industries. Several of the software companies are leaders. A company like Ranbaxy is a leader in the pharmaceutical sector. There are a lot of companies which have not changed much.

So are Indian companies competitive? Sure. If Sundaram Fasteners can get GM award for the best quality supplier three years in a row, that means they are competitive on cost basis, qualitative basis and delivery basis.

Are there hundred companies like that? Not yet. But you see it can be done and there are people doing it. So my feeling is that it is hard to generalise this feeling. And if you do that, there are enough success stories.

You have been stressing that India Inc has to create new markets rather than defending old markets.

Yes. Take for example, two-wheelers. You can say that I'm going to defend the two-stroke engine. And at the same time I can create a four-stroke engine, less polluting and certainly more efficient. I also can create an electric vehicle. So, we have to create a new form of services.

Do you think Indian companies fear global competition?

I think if you are a good manager, you always worry about your competitors. To take the competitors for granted is a mindset of a closed economy. Nobody in the open market takes anybody lightly.

So to be extraordinarily sensitive and concerned about key competitors, especially those who have more experience and technology capabilities, is not a wise thing to do. I think we have to distinguish between being respectful and being concerned about competitors.

And certainly, don't stop the Indian consumers from getting the benefit of competition. It's not a wise move because in the long term, you have to compete anyway. Asking for some kind of privilege protection for a short period of time is one thing. But asking for protection all the time is not, because ultimately the consumers get affected.

You mean, the Indian companies fear MNCs?

They better be. Why should the fear go away? You see American companies, they fear of Japanese and Korean competitors. It's a healthy thing. It's part of being competitive.

Photograph: Jewella C Miranda

'MNC's assumptions about India are untenable. But don't underestimate them'

Interviews

Business News