- Difficult to find support - Liberalizes policies and taxes/tariffs - Labour activism, distribution of wealth Types of Indian companies: - Family conglomerates - Born-global - Multinational firms - Government-owned and controlled large entities - Small and medium entrepreneurial enterprises (SMEs) Family Business Groups: - “very diversified collections of legally independent firms that usually have a large proportion of family ownership” - Cross-holdings / shared identity - Great at generating capital / funds / trust for more funds / reputation - Laws prohibit intra-company funding so often done through family-controlled investment companies Born-global: - Knowledge industry sector - World-class quality - Strategic managerial vision - One of the Top 5 start-up companies in the world, growth rate of 40% - Ex. Table Grabber / Appointy Multinational firms (MNCs) Government – owned: - Airlines - Shipping - Railways (1.8 million workers for the Indian Railways) - Postal Service - Oil and Gas - In 1999, Indian public sector was twice the size of private - Made profits by being monopolies - Very bad overall performance - Governments are led by social altruism - No personal gain available SMEs - Variation with quality - Managerial differences - Trading mindset
IBUS20001: BUSINESS IN ASIA - Garments, toys, shoes The trouble with SMEs in India: - India has lots of SMEs but not a lot of growth for SMEs - Study cited: electricity, corruption, tax administration, labour regulations, and inadequately trained workforce, ease of doing business - Plus funding and administrative burdens Family conglomerates I – Tata Group: - Tata group o Established in 1886, one of India’s largest businesses o CEO: Mr. Ratan Tata o 2008, group revenue: $62.5 billion, 5.3% IN’s GDP international income accounts for 61% o Diverse business 7 sectors Consists of 100 firms Mixture of hybrid culture and highly sophisticated global approach\ o Operations in over 80 countries, prods & svs. Exported to 85 countries o Over 300,000 employees worldwide Family conglomerates II – Reliance: - Reliance: India’s biggest conglomerate - Offspring: o Mukesh Ambani, elder brother, world’s 5 th richest man (Forbes) Reliance Industries (RIL), controls the petrochemical, oil and gas, refining and manufacturing divisions o Anil Ambani, younger brother, worlds 6 th richest man Reliance Anil Dhirubhai Ambani Group (RADAG), controls telecoms, financial services and power o Agreed to not compete against each other o Desire: outdo one another, both accused the other of repeated attempts to spoil his business - Poor business image of Indian corporations Indian HRM: - Compared to the West - Modern Changes Changing spheres of Indian HRM: 1. Competition: government control to strategy 2. Performance: satisfactory to promise 3. Global-local 4. National pride – Indian way of doing things Challenges for future: - Ongoing economic and industrial development - Reduce business and political risks
IBUS20001: BUSINESS IN ASIA - Diversify ownership, reduce government control - Improve governance practice at corporate level - Internationalisation of domestic firms - Simplify organisational structure -
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- Business, Asian Financial Crisis